n.b. – This story first appeared in the APEX Editor’s Blog on 4 April 2013
Getting free travel as a reward for loyalty to an airline is great, but it only scratches the surface of what loyalty programmes can offer to their members. As the schemes mature they expand their redemption options, including travel with partners, retail merchandise or other goods. The ultimate in flexibility, however, comes in being able to convert loyalty points to cash. For the Etihad Guest programme, this ultimate goal is now a reality.
Etihad has partnered with PointsPay to offer its 1.8 million members the ability to convert points to money. Etihad was already a leader in the partner redemption model with 170+ partners available. The PointsPay integration means every merchant who accepts MasterCard or Visa is now a partner as well. Members can quickly and easily convert points to available credit on a PointsPay credit card, allowing them to make purchases online or offline nearly anywhere in the world.
Loylogic, the company behind the PointsPay platform, is understandably proud of the product and the success it has seen since launching a few months ago. According to Robert Moerland, Loylogic’s VP for business development, the adoption rates for the platform have been very strong in the first four months the programme has been available. More than 20,000 members have enrolled, redeeming roughly 75 million miles so far in 7,500 transactions. Members have redeemed their miles at approximately 1,200 merchants across 72 countries; it is a global solution to the local problem of how to get value from points in a specific programme.
In addition, the PointsPay redemption option hasn’t reduced the other options for Etihad Guest members. Moerland notes that the flexibility of PointsPayis attractive, but it is still just a small part of the overall redemption numbers, at least for now.
PointsPay adds the convenience to choose when and where to spend miles. It offers ultimate flexibility vs. the value of good deals we offer through branded programme reward portals. The results so far do show that it is indeed attractive to some members, but others keep saving for their free flights, or chasing good deals on the shop.
Etihad and Loylogic plan to grow beyond the current customer base. Etihad’s scheme is available not only to their passengers but also to those of Air Seychelles. Additionally, Etihad recently announced plans to buy Air Berlin’s TopBonus programme. Their goal is to create a “global loyalty management platform”, according to James Hogan, Etihad’s CEO. Adding a worldwide spend system to their other points redemption options certainly will help both programmes and passengers in that regard. Cash is, after all, a universal concept.
Moerland sees a bright future for the platform with other loyalty programmes as well. “PointsPay is maybe the first real global mobile wallet that works today. As such it is a good fit for major global frequent traveller programmes. Being a turnkey solution it is easy for smaller programmes that need lean redemption solutions.”
Only about 1% of the Etihad Guest members have signed up for the programme so far. That leaves a lot of room for growth in the space. As more passengers become aware of the option there is no doubt that the adoption rate will increase; simplicity and flexibility are two things customers love and they are often hard to find in loyalty programmes.