A recent, small though important development, in the payments arena came to my notice. American express – a leader in closed loop credit card business – has launched a new virtual currency for its merchants & small business owners which can be used on Facebook.
Actually, this virtual currency is nothing new, rather Membership reward points only. Thus Amex card members can use the merchant reward points accumulated on their card account as a virtual currency to buy advertising space on Facebook.
Thus in one shot AMEX has achieved:
- A way for its customers (read Merchants/Small Business) to reach 500 million potential their customers via Facebook ads & promote their business. (Already 35 percent of entrepreneurs use Facebook to promote their businesses)
- An incentive for its customers to use AMEX services more & more, and thus earn Membership Reward Points.3.
- Customer loyalty & long term relationship
- Establishing a relationship with Facebook since they have accepted to redeem AMEX reward points as a virtual currency.
- Finding genuine ways to promote business for its customers. It’s a win-win for both Amex & its customers.
A step further in this direction could be the sale of Facebook credits for Membership reward points. Thus any credit card customer could then buy FB credits in lieu of his collected credit card reward points & then use these FB credits as a virtual currency in the Facebook social world.