Brian Cottengim from Vantiv gaming and entertainment wants to find a way to help Casinos get more out of their loyalty points programs by allowing them to be spent as cash at local merchants. After studying blockchain, I came up with the idea to use a blockchain as a shared ledger, and with a set of API's that we can offer to our partners that operate loyalty programs, enable these points to be used just like cash anywhere a debit card transaction can be processed.
What it does
The Vantiv tokens to USD exchange is a system leveraging the Stellar.org blockchain to settle digital assets such as loyalty points as cash rewards redeemable anywhere the Jeanie network is accepted. This scheme requires Vantiv to become an anchor on the Stellar network and thereby back the receipt of loyalty tokens for dollars that must be settled to merchants who accept the Jeanie card. This can be used to allow a merchant to set up a brand new loyalty program, or this could be a shadow ledger allowing a merchant that has an existing loyalty points system to enhance the utility of their loyalty points by giving them a cash value redeemable via standard debit card processing.
Loyalty Program Operator (LPO)
The LPO is the company that will be operating the loyalty program and backing the exchange of US Dollars to/from their Loyalty Tokens (LT). Consumers will be issued a Jeanie network debit card that they will be able to use anywhere that the Jeanie network is accepted. The Jeanie network peers with most other debit networks in the US. What this means is that a card issued on the Jeanie network is accepted at any merchant that accepts debit card processing.
Vantiv will provide an API to the LPO that will allow them to credit and debit Consumer Accounts (CA) as they earn and redeem their LTs within their existing closed-loop loyalty program. This API will be a thin & functionality restricted layer on top of the existing Stellar.org API. When a consumer uses their LTs as cash using the Jeanie debit card, Vantiv will acquire the transaction and exchange the LTs for USDTs, and settling the cash to the acquiring merchant via standard Vantiv settlement rails. The exchange and settlement of LTs for USDTs all happens on the Stellar.org blockchain.
For example, if a consumer wants to purchase a $5 gallon of milk from their corner market using the points on their Jeanie network debit card, they swipe or insert their card as normal, the transaction authorization request is acquired by Vantiv using standard Jeanie debit network routing. Vantiv will use the Stellar network blockchain in order to debit loyalty points from the consumer’s account, and exchange them for a token that is pegged to the dollar. The token which is pegged to the dollar is backed by the LPO so that we are able to settle the tokens exchanged for dollars using the blockchain, and then settle dollars back to the merchant who sold the milk using the existing Vantiv settlement rails.
For casinos, merchants, and loyalty platform providers, they are now able to allow their customers to use loyalty rewards points at any merchant that the Jeanie network is accepted.
For consumers, they are now able to use their loyalty points, at any merchant that can accept a debit card payment.
For Vantiv, we now have a business model that is using the blockchain to accept payments in the form of tokens, and settle them to dollars. The tokens may represent loyalty points, or any other tokenized asset.
How I built it
Using the https://saza.io wallet interface to the Stellar network
Challenges I ran into
Figuring out how to settle the US Dollar Tokens (USDT) so that Vantiv could leverage existing settlement rails.
Accomplishments that I'm proud of
I think this might actually work.
What I learned
How to set up an exchange between any assets using a blockchain to create the market.
What's next for Vantiv Loyalty Token to US Dollars Exchange
Get funding from the Vantiv Gaming and Entertainment LoB to build a version 1.0 prototype to test with a real customer.