Rethinking Money Part 8: Business-Purpose Currencies

Releasing a currency can boost your business.



Many large businesses today issue their own currencies.

Surprised?

Don't be. You use them all the time. They're called airline miles, customer rewards points, cash-back bonuses, and so forth. However, they're actually branded private currencies issued by businesses.


Branded Currencies

Big business can often afford the infrastructure for loyalty currencies, discount programs, and so on. Right now, this infrastructure is sorely lacking for small to medium-sized businesses (SMBs). Our software will enable anyone to get on the Cognisaya web site and with minimal effort, set up a branded currency for their business no matter how big or small the business is.

Although there are some companies offering software and hardware solutions for this market to SMBs, they are all propriety systems whose only purpose is to manage that one currency. One of the things that is holding branded currencies back is the fact that there is no universal platform across all (or even many) businesses and across all hardware platforms.

For example, Starbucks has its own branded currency that it uses to create customer loyalty. They probably have the most advanced software system for managing a private currency. Users can obtain plastic cards to use for payment. They can also download an app for their mobile devices that allows them to easily reload money onto their cards. As a result, most Starbucks gift cards aren’t given as gifts. Customers use and reuse the as a convenient method of payment. Starbucks customers can also pay directly from their mobile devices. The convenience of these two payment methods makes Starbucks a leader in branded currencies.


Universal Access

Our branded currency system enables businesses to seamlessly aggregate deals, offers, payments, and loyalty currencies into one platform. That is, customers have a single user interface through which they interact with all of the offers that businesses use to incentivize purchases. All of these different forms of incentives can be issued as branded currencies and managed through the same wallet.

In addition, the wallet software can treat coupons, loyalty currencies, and so forth as convertible instruments. Customers can easily pick which instrument to spend and how much in any given transaction. This enables them to calculate and compare the purchasing power of different forms of payment. They can also prioritize which instruments they want to spend.


Low Cost

An advantage of our system is that many SMBs can easily move into branded currencies and discount coupons that they release as a digital currency with little cost. Their customers use the same wallet software for all forms of currency. Our digital wallet stores any compatible currency. As a result, customers have only one interface for all of their currency needs.

By contrast, the current situation is one in which virtually every business that releases a branded currency also has their own wallet software. Customers must download and learn a new wallet application every time they want to use a different form of currency. Our system provides a level of universality to the experience of using branded currencies.


Branded Currency Exchange Markets

One interesting possibility that our software’s universality opens up is that of third party aftermarkets for branded currencies. When many businesses use the our platform for their currencies, we may see the advent of third parties who provide currency exchange markets for all Cognisayar-compatible currencies.

Essentially, a branded currency exchange market would enable customers to log on and find someone who will buy their East End Publishers currency in exchange for SuperDuper Tire Bucks, or whatever else the customer might be looking for. Although some businesses may not want their currencies to be transferrable, it really should not matter who redeems their branded currencies. The point is that their currency has brought them a customer that they might not have otherwise obtained. And that opens up the possibility for repeat business.


Business Currencies as a Supplement to National Currencies

We may not think of prepaid phone time as a currency, but it can be. In Zimbabwe, rampant hyperinflation caused a shortage of small money denominations. This often made it nearly impossible for merchants to provide change in transactions. Shoppers were frequently short-changed and shouting matches as well as physical altercations resulted.

A company named Yo! Time came to the rescue by letting people redeem small amounts of change as mobile phone airtime. So when merchants couldn’t provide change to their customers, they offered airtime minutes instead.

Likewise, in Egypt, Vodafone provides cards called “Fakka” that store and accumulate small change. If vendors do not have the correct denominations to provide their customers with change, they can simply add the change to the Fakka card.

We believe that there are many opportunities for businesses to supplement national currencies in ways that are beneficial to both.


Summary

Branded private currencies are already a big part of the business landscape. Their use will only increase. Our software makes branded currencies possible for businesses of any size. It also enables customers to have a universal, familiar experience across all of the currencies they use.

© Cognisaya 2013-2015


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