Bakkt Bitcoin Rewards Preview
In August 2018, Intercontinental Exchange (ICE), the operator of the New York Stock Exchange (NYSE), announced the formation of a new subsidiary called Bakkt. Following approval from the Commodity Futures Trading Commission (CFTC), Bakkt launched the world’s first regulated Bitcoin futures exchange and clearinghouse in September 2019.
Bakkt is one of the blockchain industry's most well-funded companies, completing a $182.5 million Series A funding round in December 2018 and a $300 million Series B funding round in March 2020. Notable investors include household names, such as Boston Consulting Group, Horizons Ventures, Intercontinental Exchange, M12, Pantera Capital, PayU, and Naspers.
In October 2019, Bakkt tentatively announced plans to launch a Bitcoin rewards program in the first half of 2020. The launch date has since been delayed, likely due to complications stemming from the COVID-19 pandemic.
Will Bakkt Become the Ultimate Bitcoin Rewards Program?
Inspired by the success of other existing Bitcoin rewards program, Bakkt plans to partner with major merchants in order to offer Bitcoin rewards to users for both in-store and online purchases.
Bakkt aims to implement two ways for customers to make purchases and earn rewards:
Digital Credit Card - The Bakkt mobile app will function as a digital credit card. Customers can use the app to complete purchases at any merchant store that accepts Google Pay or Apple Pay.
Bakkt Cash - Bakkt is developing a new payment system that it is tentatively known as 'Bakkt Cash'. Merchants that choose this option will be able to eliminate payment processing fees that are required by third parties, such as credit card processors or banks. These savings can then be passed on to customers in the form of rewards, such as loyalty points or airline miles. Major merchants, including Starbucks, have already begun testing a limited beta version of Bakkt Cash.
Bakkt is in the process of developing an innovative Bitcoin rewards program. Currently, it’s too early to tell if this will become the most promising program on the market.
The Bakkt Team
Founded in 2018, Bakkt has continued to steadily hire new talent across several key positions. Bakkt employees have previously worked with well-known businesses in the fintech, blockchain, and rewards industries.
Several Bakkt team members previously worked on the creation of digital wallets at PayPal and Google. Their collective experience will likely be beneficial in the development of the Bakkt mobile app's digital wallet, which enables users to securely send, receive, and store a variety of digital assets.
Several team members, including Bakkt CTO Matthew Johnson, were previously employed at Digital Asset Custody Company (DACC), which was acquired by Bakkt in April 2019. Their experience will greatly assist Bakkt’s integration of blockchain technology and crypto assets. These team members are likely working on the Bakkt digital asset exchange, which will be an integral feature of the Bakkt mobile app.
After acquiring the Bridge2 rewards platform in February 2020, many Bridge2 employees joined the Bakkt team. Ravi Venkatesan, who was previously CTO at Bridge2, is now the Head of Innovation at Bakkt and the Lead Engineer for all of Bakkt’s loyalty products. A number of Bakkt's current engineers, customer success managers, and product managers gained valuable experience building Bridge2’s highly successful rewards program. This will enable the Bakkt Bitcoin rewards program to provide a first-class user experience for both merchants and customers.
Bakkt Acquires the Largest Loyalty Program Technology Provider
Jeffrey Sprecher "ICE CEO"
"With the completion of our Series B financing and recent acquisition of Bridge2 Solutions, Bakkt is now a team of 350 employees and powers the loyalty redemption programs for 7 of the top 10 financial institutions and over 4,500 loyalty and incentive programs including two of the largest US airlines,"
ICE February Earnings Call
Bakkt reportedly spent nearly $300 million to acquire Bridge2 in February 2020. Prior to the acquisition, Bridge2 served as a major SaaS platform for incentive and employee perk programs. During its time, the company reportedly held a combined total of $60 billion in ready-to-go rewards. Bridge2 has extensive experience catering to companies in an array of industries, such as financial services, travel and hospitality, health and wellness, retail, and a number of others.
The Bridge2 acquisition marked an influential shift in the company, ensuring that Bakkt is able to deliver a Bitcoin rewards program that has direct access to major brands.
These useful technologies and existing merchant partnerships currently drive the creation of the Bakkt Keystone platform, a service that offers the following benefits to customers and merchants:
Flexible Shopping - The Bakkt Keystone platform supports rewards distribution for both online and in-store purchases. Bakkt has already established key partnerships with leading brands, wholesalers, and retailers. The company is working with major brands such as Walmart, Best Buy, and Apple to improve customer shopping experiences and establish quality rewards programs.
Travel Center - Bakkt features a full-service travel center, providing users with personalized travel content and driving customer engagement for merchants in this industry.
Gift Cards - Customers can redeem their Bakkt rewards for gift cards that can be used online and/or in-store at over 500 merchants across all major product categories. A few notable brands supported through Bakkt include Amazon, Apple (iTunes), Target, Lowe’s, and Starbucks.
Event Tickets - Bakkt has partnered with some of the largest digital ticketing companies, enabling customers to redeem their rewards for concerts and entertainment events.
How Will Bakkt Differ From Other Bitcoin Rewards Programs?
Bakkt has implemented a different approach to its merchant partnerships. Contrary to other Bitcoin rewards programs, the company works directly with merchants to support mobile payments and offer customer rewards through ‘Bakkt Cash’. Other Bitcoin rewards programs currently have limited relationships with merchants and only offer affiliate rewards indirectly.
Bakkt vs. Lolli
Lolli is categorized as a simple affiliate cashback program—a financial product category that has existed since the beginning of the Internet. It differs slightly from traditional cashback programs, as users are able to earn rebates in Bitcoin (BTC) instead of USD.
Rather than using an affiliate system, Bakkt works directly with the merchant as a technology partner. Merchants have more extensive options through Bakkt, and are allowed to implement custom wallet features such as digital coupons and new payment rails.
The Bakkt mobile app offers a streamlined user experience by allowing shoppers to complete purchases, earn rewards, and exchange assets through a single digital wallet.
Bakkt vs. Fold
Fold is a gift card network that allows merchants to save money when consumers make purchases with a gift card. This allows merchant partners to avoid the high payment processing fees associated with traditional debit/credit card purchases. Gift cards are also a form of marketing, as they ensure that customers will spend a specified amount at a merchant’s store at some point in the future.
By default, Bakkt will also save merchants money by integrating their payment systems directly into a digital wallet. It will then allow merchants to offer unique rewards to consumers, such as loyalty points or airline miles. The app functions much like a reusable gift card, in that merchants can pass on savings directly to customers. This system provides clear incentives that reward each customer's continued support.
Bakkt App Preview
According to Bakkt's website, the mobile app will include the following features: Rewards, Portfolio, Crypto, and Cash.
Rewards - Users will be able to aggregate accounts for a variety of rewards programs, including ones that distribute rewards in a variety of formats, such as airline miles and loyalty points. Bakkt has announced that users will have the option to exchange rewards for cash. According to unconfirmed sources, Bakkt users may also have the option to exchange their rewards for crypto assets or other rewards.
Portfolio - The Bakkt app serves as a digital asset wallet that allows users to store funds and view their balance of loyalty points, gaming assets, rewards programs, and crypto assets.
Crypto - Users can buy, sell, send, and request crypto assets directly from the Bakkt app. Based on the screenshots that Bakkt has provided, Bitcoin (BTC) will be featured as a supported crypto asset. It’s currently unknown whether Bakkt will support other crypto assets.
Cash - Users can use Bakkt to deposit, withdraw, send, and request cash. The digital Bakkt card will allow users to complete both in-store and online purchases at any retailer that accepts Apple Pay or Google Pay. Users will have the ability to link their existing bank account. Based on the available screenshots, it's evident that USD will be supported. It’s unknown whether Bakkt will support other fiat currencies.
Frequently Asked Questions
Will the Bakkt Bitcoin rewards program be available to United States residents?
Yes. Bakkt’s rewards program will initially be available to US residents. Bakkt has not announced whether users in other regions will be able to earn rewards.
When will the Bakkt Bitcoin rewards program become available?
Bakkt originally announced that the rewards program would become available in the first half of 2020, but the program’s rollout has since been delayed. An official launch date has yet to be announced.
Does Bakkt have an affiliate program or referral system?
Can I receive rewards in other forms of payment besides crypto assets?
Yes. The Bakkt mobile app will enable merchants to distribute rewards in a variety of forms, including loyalty points and airline miles.
Based on the program's current progress, the Bakkt Bitcoin rewards program appears likely to launch during the second half of 2020. As screenshots of the Bakkt mobile app have been available since March 2020, many speculate that the rewards features have already been finalized.
While many important product details are still publicly unknown, this will be the first instance of major merchants working directly with a digital asset company to offer customer rewards. The Bakkt mobile app is a unique option, as it will serve as a multi-purpose consumer product for aggregating rewards, storing and trading digital assets, and making mobile purchases. These features set Bakkt apart from similar products, which could aid the company in offering a top-tier rewards program.
Blockfer recommends that interested users keep a close eye on future announcements regarding the availability and product details of the Bakkt Bitcoin rewards program.