KrisFlyer, Singapore Airlines Group’s frequent-flyer program, will introduce a new blockchain-based loyalty digital wallet which will allow members to spend their KrisFlyer miles for point-of-sale at limited retail outlets.

The new KrisFlyer digital wallet app, which is expected to roll out in about six months, was developed through a collaboration between SIA Group, KPMG Digital Village and Microsoft. SIA Group is initially signing up retail merchant partners who will accept the miles as currency in Singapore. The KrisFlyer digital wallet is managed using a SIA-owned private blockchain that will be exclusive to SIA’s partners and merchants.

Singapore Airlines CEO Goh Choon Phong says:

“Innovation has been a key contributor to the success of Singapore Airlines since Day 1 and we are very excited about this world-first initiative, which will bring even more benefits to members of our KrisFlyer program.

“This groundbreaking development in which we will be using blockchain technology to ‘digitalize’ KrisFlyer miles is a demonstration of the investment we are making to significantly enhance the digital side of our business for the benefit of our customers. It is in line with our recently unveiled Digital Innovation Blueprint, under which we aim to be the world’s leading digital airline.”

Amadeus explores the opportunities for airlines to use blockchain to add value to loyalty schemes by simplifying redemption and transfer in its Blockchain report published at the end of last year. Amadeus highlights the benefits to airlines of using Blockchain to let members spend their miles in a greater variety of ways.

“Although some schemes have forged partnerships allowing points to be widely redeemed it is still true that in general an airline loyalty point can’t be used beyond booking flights. This can be frustrating for travelers and is also a problem for the industry. Any unspent loyalty points must reside on an airline’s balance sheet as a liability, which can hamper capital raising and investment.”

Amadeus features developments by San Francisco-based start-up Loyyal, which uses IBM Fabric to manage program currency and transaction integrity.

“Loyyal’s vision sees travelers accessing loyalty points in real-time. Imagine landing from a long flight and having points credited to an app immediately that could then be used to pay for a ride sharing service from the airport. Interoperability will increase to such an extent that a loyalty scheme for an independent hamburger restaurant could easily integrate with major schemes, reducing friction, improving the consumer experience and encouraging commerce. In essence, enabling access to the ‘long-tail’ for loyalty schemes.”

Loyyal also worked with Smart Dubai on blockchain applications that support rewards for tourism activities.

The Harvard Business Review also identified blockchain as an optimum tool to disrupt loyalty programs, specifically for its potential to simplify spending miles on other travel services and lifestyle items.

Related reading:

Designing a loyalty programme around the modern-day traveller