Cash-back, loyalty points, miles, gift cards, and numerous other variations – reward programs come in all different shapes and sizes. Unfortunately, they all seem to suffer from similar issues. Lack of flexibility, an obnoxious amount of restrictions, and useless “perks”. But nonetheless, these systems attract and encourage loyalty to their brand, card, and/or program. A great example of this is American Express. The company is one of the most prestigious credit card providers in the world than competitors. It’s renowned for its intricate reward systems, but there’s still one problem – you can only use those rewards within its network. despite having significantly less reach These kinds of restrictions exist across the entire reward industry from gift cards to proprietary loyalty points. But that may be about to change as crypto debit cards and reward systems begin to move into the limelight. On the surface, this seems like just another customer retention strategy, However, it may actually have the potential to reinvent the notion of reward cards and loyalty points, which is a big part of the modern consumer experience. Current reward programs and how they work The idea behind a reward program is simple. The customer is rewarded, usually with cash back, points, or miles, for making a purchase. Such programs are typically applied for specific forms of payments, like credit card payments. Under cash back, the customer is refunded a certain percentage of their payment. With points, the user receives points for every purchase. They can then redeem these points for goods or services in the future. The same applies to mileage points, which are used by airlines. The consumer earns miles which they can then redeem for travel or hotel stays. In all of these, the customer makes regular purchases and they are rewarded for it. And it sounds good; at least on paper. Things become a little more complicated when it comes to implementation. Here, the question arises; how much value do users actually get from these programs? The flaws of traditional reward programs Traditional reward programs have some big flaws. Unfortunately, these flaws ensure that most customers derive very little value from the program. Take cash-back rewards for instance. While cash-back levels vary depending on the type of purchase and the credit card, most pay 1%-2%, at most 3%. That's a very small reward. To put it into perspective, on average, the card owner will have to spend a thousand pounds to get £20 cash-back. That can be acceptable until you factor in the fees and interest rates. Credit card rewards programs carry high fees and interest rates that negate the value of the rewards. What about points and miles? It's the same really. Consumers don’t earn that many points and miles from reward programs. For example, “mile” values are generally worth 1 cent per mile. The average cost of a good round-trip flight from JFK in New York to Heathrow is around €600. So, one would need to travel around 65,000 miles to earn points worth a single trip. This point also demonstrates another big flaw of traditional reward programs – limited earning and redemption options. There are limited ways through which customers can earn and redeem points or miles. Take miles rewards for instance. Miles can only be earned through air travel. And once earned, they can only be redeemed at the specific airline that offered them. Points, on the other hand, can only be earned and redeemed at specific outlets for specific purchases. Some programs only give rewards for grocery purchases, others for household items, electronics, and so on. This makes things frustrating for customers who may wish to earn rewards for making different purchases or those who want to use their rewards for other experiences. So, while reward programs are attractive to consumers, they don’t offer that much value. But what do crypto debit cards have to offer? Do cards like the Plutus Card do any better? Rewards With Crypto Debit Cards Plutus, a Web3 project that provides users with a debit card and a finance app that focuses on rewards. Users earn a percentage of the value back in Pluton (PLU). A huge benefit of such cards, and perhaps the most important, is redemption options. Crypto rewards have much more flexible redemption options than traditional reward programs. This is because they have very few limitations and give consumers an array of options and opportunities to earn and spend rewards. For example, a cardholder earns crypto for using the card at any merchant. Here it doesn’t matter where the holder has used the card. As long as the consumer uses the card to make a purchase, they will be rewarded. They then get to spend the rewards on anything they want. They’re not limited to a particular class of goods or services. They can also hold the rewards in their wallet as they would any other cryptocurrency. If the assets grow in value, well and good. Consumers also have the option to withdraw their rewards, which is impossible to do with conventional credit card rewards. This involves converting the tokens into real money by selling them at an exchange. For example, this app features a peer-to-peer exchange that supports crypto-fiat swaps. So, Plutus Card users can easily and conveniently convert their Pluton to cash. The other benefit of crypto rewards is the size. On average, crypto debit cards offer bigger rewards than credit card programs. Take Plutus for instance, which offers rewards of up to 8%. This is one of the highest reward rates in the market. Takeaway Overall, crypto debit cards have bigger, more flexible reward programs than traditional options. This makes them a very attractive alternative for consumers. So, if and when crypto debit cards go mainstream, they will likely replace traditional reward cards and loyalty points, or at least force them to offer better value.

The writer is smart, but don't just like, take their word for it. #DoYourOwnResearch before making any investment decisions or decisions regarding you health or security. (Do not regard any of this content as professional investment advice, or health advice)

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Can Crypto Debit Cards Replace Traditional Rewards Cards and Loyalty Points?

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