Blockchain Is The Rehab Where Useless Rewards Can Become Usable Perks
Most UPI users let their discount vouchers expire because they are of no use to them. With blockchain in the picture, rewards earned on various platforms can be pooled, carried across apps, and spent on everyday needs, giving users the power to choose what they want.
The Gist
The disconnect in UPI reward offerings sparks a conversation about the relevance of fintech incentives and user engagement.
- A user humorously points out the absurdity of luxury rewards for budget-conscious individuals.
- Flawed marketing strategies lead to a lack of interest in rewards from users.
- Adopting blockchain technology could provide a more user-friendly rewards system that meets diverse spending needs.
Just last Saturday, a famous handle on X shared a viral clip of a UPI user laying out his frustration with a dry, disarming wit that landed way better than any rant could.
In the video, the user, who lives on a tight daily budget, scrolls through a list of rewards accrued through his UPI transactions and finds flight ticket discounts and five-star hotel offers.
“I somehow manage to put together Rs 190 for my travel on a state transport bus, and here these UPI apps are giving me a Rs 450 discount on a five-star hotel stay,” he says, driving home the point that he has received benefits designed for a life he does not live.
Towards the end of the clip, he self-deprecatingly tells the service providers — with all the dark humour at his disposal — to at least look at his profile photo before aimlessly distributing rewards and discount vouchers.
On the other end of the social spectrum are well-off people who often receive as little as Rs 2 cashback on transactions even after burning thousands of points. Those who pay their credit card bills on a popular app would know the feeling.
At the end of the day, the message to fintech companies from both camps is the same: give out rewards that are relevant to people, or just don’t.
A financial product does not need to be detached from the financial realities of the recipient.
Flawed Marketing Plans
That short clip has exposed some inherent flaws in the way fintech marketing campaigns are being designed and targeted.
It appears that their executives are just interested in onboarding business partners, packaging their offers as rewards, and indiscriminately sending them to all and sundry.
This approach may help push short-term engagement numbers, but it defeats the purpose of rewards.
What’s the point of receiving an incentive you cannot use? The result is that beyond a point, users stop checking them altogether.
The marketing intent is no doubt right, but it’s unplanned and misaligned. The same set of offers cannot and should not be sent to users with very different income groups and spending patterns.
You cannot build a rewards catalogue solely on the basis of business partnerships, with absolutely no consideration for the person receiving them.
Practical Challenges
It cannot be denied that it’s nearly impossible to send out customised rewards to users on the basis of their financial status or looks, as the protagonist of the viral video suggests. At this point, the problem sounds unsolvable.
But it would work out if the companies loosen their grip on the rewards system and let users take their pick from the catalogue.
This is one area where blockchain technology can be used in a practical way. A blockchain-based reward system can issue small-value credits that are not tied to specific brands.
These credits can be accumulated and redeemed across everyday categories such as food purchases, transport, mobile recharges or utility payments. The value would be limited but usable, and the choice of where to use it stays with the user.
Because the blockchain system is shared, rewards earned on one app do not have to remain confined to that app.
A user who pays across multiple platforms can collect rewards in one place and spend them where it makes sense. This is especially relevant for users who make multiple transactions across apps.
Already In Use
Globally, some platforms have already adopted this system in a limited form.
Singapore Airlines, for example, runs KrisPay, a blockchain-based wallet that lets frequent flyer miles be converted into digital credits and spent across multiple everyday merchants, including food outlets, fuel stations and retail partners, instead of being restricted to flight redemptions alone.
Another example is Qiibee, a Switzerland-based blockchain loyalty platform that allows brands to issue tokenised reward points recorded on a shared ledger, making it possible for users to manage and redeem rewards across participating merchants rather than within a single app or programme.
Such systems also allow fixed rules on expiry and redemption, where users can see what they have earned and how long it will last. There are no surprising landmines for them on the redemption page.
Final Words
Blockchain could work in this case because it does not require a new interface. Payments can continue as they are. The change happens only in how rewards are earned and redeemed.
The man in the video was not making a larger argument about technology. He was stating something practical: Rewards that do not fit the daily spending of a user are useless.
Fintech companies can either adjust how rewards are designed or accept that many users will simply stop paying attention to them.
Not paying attention to this problem could cost them as well because business partners seeing fewer redemptions would eventually pull the plug.
This series is brought to you in partnership with Algorand.
