UK-based Plutus has a novel rewards solution that might best be described as cryptocurrency rather than blockchain rewards. Premium and Pro members earn cryptocurrency rewards on all debit card purchases and receive additional fiat currency cashback from brands such as Nike, Vodafone, Lenovo and travel partners Radisson, Skyscanner and Etihad Airways.
It’s quite a clever system, so the devil is in the details.
Users sign up for a Visa debit card, which can be used in the normal way within the UK and Europe. Except it can be topped up using fiat money, or linked to a self-custodied cryptocurrency wallet.
The rewards
If the user doesn’t want to subscribe, they pay €9.99 for the debit card but earn no rewards. To earn rewards and get a free card, customers pay a monthly subscription to be a premium (€4.99) or pro (€7.99) member. Both types of subscription members earn 3% cryptocurrency rewards on every purchase, paid in Plutons, an ERC-20 token that works on Ethereum. The Plutons can be converted to other cryptocurrencies using a free decentralized exchange.
But there’s an incentive to keep hold of some Plutons. Depending on the number of Plutons accumulated in a member’s wallet, customers can earn additional fiat currency cashback ‘perks’ from retailers of up to 9% in a new feature being rolled out. In the case of Nike, for now, the perk is only for online purchases at Nike UK. But on top of the 3% crypto reward there’s a 4% cashback ‘perk’.
The more Plutons that are held or staked, the more outlets that are unlocked for ‘perks’ on top of the 3% cryptocurrency reward. So the lowest level of ten Plutons will give access to cashback at fashion outlets such as Nike and GANT. With 100 Plutons in a wallet, a member can get perks from Vodafone and Lenovo. With 500 Plutons they can access perks from Etihad Airways, AirBnB and Skyscanner, and so on.
Sidestepping regulations
There’s another level of cleverness when it comes to the regulatory angle. Plutus doesn’t touch the money in the member’s card nor the cryptocurrency that members can use to top up. The Visa cards are issued by FCA-regulated Contis Financial Services, where the cash is paid for adding to the debit card balance. If a member wants to link the debit card to cryptocurrency for topping up, it’s linked to the member’s self custodied wallet. Plutus does not touch it.
As a result, Plutus is not a regulated entity. At this stage it’s still relatively small.
We’ve contacted Plutus to find out more about the funding behind the company and confirm the regulatory position. We believe there was a small ICO in 2016 but await confirmation. The article will be updated when we receive a response.
Rewards are a popular blockchain application
Yesterday we reported that BMW is trialing a global rewards system BMW Vantage in South Korea. Social media platform Reddit recently launched its blockchain-based community points system.
NYSE owner ICE bought Bridge2, a technology rewards solution for almost $300 million. The purpose was to pass it on to blockchain venture BAKKT which has pivoted to rewards.
Singapore Airlines, Cathay Pacific and Air Asia are among the airlines that have implemented blockchain for loyalty programs.
In South Korea, travel firm Yonalja integrated the MiL.k rewards platform.
