Why LOYCHA is a game changer in Loyalty?

Loycha is not just another coin. We believe that blockchain is a revolution in technology as the internet was for our lives. The loyalty program fit with blockchain makes sense more than any other sector, as it was already using virtual money (points and miles) but in centralized systems and using dated technology with the same types of rehashed rules. To create a loyal customer in the blockchain era, loyalty program thinking has to be adapted to create new methods and thus, opportunities.

While the loyalty industry is growing, the majority of loyalty programs focus on revenue over and above customer loyalty, which creates a mismatch in needs and expectations.

Loycha aims to change this, to change the game and to bring customers more of what they want. Below you can find some existing problems and ​our solutions​​ to these problems.

Loycha 15 Problems 15 Solutions Image

Expiring points

Most loyalty systems have rules that make customers collect points which expire after a period of time. It is unacceptable from the customer's perspective to lose what they have earned. Companies may reduce their liability however customers become less engaged and any potential satisfaction with the loyalty program is lost.


Never expiring coins

Coins that customers have in their Loycha wallets will never expire. So they will not have to worry about expiry dates and will always have time to collect the required coins for awards. We believe this will increase redemption ratios, in turn increasing customer loyalty and satisfaction.


​​Spending a lot and earning very little

Most loyalty program rewards are a very small portion of customer spend. Spending 100$ and receiving between $1-$3 does very little to incentivise customers to spend more with one particular loyalty program.


Higher percentages of earning from partners

The partnerships that we will enable partners to offer higher percentages back as rewards. We believe that companies that offer 20-50% discounts on their products from time to time, can offer a higher percentage rewards instead of (and in some cases as well as) discounts. This will be incentivised with a wider partner network and a larger potential customer reach. Partner cross-marketing capabilities will also be provided.


Limited products and services when paying with points

Most companies offer limited products and services that customers can buy with their points. For example, the airline has aircraft with over 200 seats but make only a limited number available to be sold with points. Or the company has 10 services that customers can purchase with cash, but when it comes to redeeming their points these may only be used for a few of them.


Unlimited products and services with coins

All of the partners will have to agree that coins collected in customers wallets will be redeemable for all of their products and services. This will increase their flow of customers and will bring them more income. With Loycha, partners will be able to convert their coins automatically to cash.


Not being able to transfer (or limited transfer) of points to another account

Most loyalty programs heavily limit points transfers: to family members, allowing only limited amounts to be transferred etc., while some don't allow transfers at all. If we consider that loyalty points are currency, this limitation is a major barrier to allowing customers to spend their currency as they wish.


Unrestricted and unlimited transfers to any wallet

Loycha enables everyone to transfer coins from their wallets to any other wallet without any restriction or any limitation of any type. Everyone is free to do whatever they want with their coins.


Limited number of partnerships for spending points

Companies with loyalty programs have a shortage of partnerships because of hard to get consensus and difficulties with implementing partnerships technically. Every new partnership is like a new implementation to manage separately. This limits the number partners that companies have where customers can spend their points.


A large number of cross-country partnerships for spending coins

Because there will be one coin and Loycha will be handling partnerships from the very beginning 3 and because Loycha will be open for all partners globally, a customer that has a Loycha wallet and earns coins in New York will be able to spend them at another partner anywhere in the world. The easy to integrate technical aspect for partners and myriad of benefits for them will allow Loycha to have a large number of partners all around the world. As there is no cost, and potential customers to gain, Loycha aims to provide an immediate win model.


No borrowing points functionality in current loyalty programs

Except for some co-branded credit cards, which allow holders to borrow points against their monthly spend, there are very few loyalty programs allowing customers to borrow points.


Borrowing functionality via smart contracts

Loycha is introducing a borrowing coins functionality which customers will be able to use with their family members, friends or anyone they know. Using smart contracts, customers will request coins from others and if accepted in terms from the other customers then they will get credited to their wallet. After the agreed time has passed, and once the customer that borrowed coins has enough balance in their account, the coins will be given back to the lender.


Expensive conversion rates of products/services with points

There are currently huge differences between the points a customer has earned and the price of products in points when converted to a cash amount. Companies are applying different fees for buying with cash and buying with points. For example, customers are told that they will earn 10% points for 100$ spend from shopping online in a store or buying a ticket. Let's say they do this operation 10 times and they collect 100$. When the customers try to redeem points for the same item they bought with cash for 100$, they will see that they need to pay 120$ for the same item. This is because companies price products more expensively with points than with cash (see company websites stores where customers can make purchases with points).


Unchanged prices with cash or coins in all partners

All partners will have fixed prices in cash and Loycha coins. So customers will pay the same prices with coins as they pay with cash. If a product or service costs 50$ in store with cash, it will cost 50$ with Loycha coins.


Online ownership of data does not belong to customers

Customers that are part of a loyalty program, let's think about an airline, are not able to transfer their flight history to another airline if they decide to move to another airline loyalty program. So in theory customers data belongs to the customer but in practicality, it belongs to companies and they use them for their benefits. This is an issue for a customer, as if a customer has achieved the highest tier with one airline, they will need to start from zero with the other airline as the other airline won’t know that their new customer is a very frequent flyer.


Online data stays on blockchain and belongs to the customer

Thanks to blockchain technology, all customer data and activities (transactions) will be stored on blockchain and will be accessible by every partner. Customers will have full control over which partners can access their data. While data will really belong to the customer, partners will have more options about the data and usage analytics so they can better serve the customer. For more details on this, please see “​Online ownership of Data will belong to customers​​”.


Irrelevant rewards and communications for customers

Customers of loyalty programs complain about irrelevant rewards and communications. According to a report 4, 53% of customers think that the loyalty program did not provide rewards/offers they were interested in, 38% think that the loyalty program sent too many communications and 36% believed that loyalty program communications were irrelevant. This is one of the biggest reasons that customers get disillusioned and disengaged from loyalty programs.


Relevant and customised rewards and full control over the communications for customers

Customers will have full control over communications and rewards that they want to receive.

Loycha will provide options such as:

  • Message receiving frequency
  • Category selections: e.g. clothes, health, sports, events, etc
  • Partner selection
  • Rewards used by family members and friends if they share
  • Specific categories at specific times: e.g. when a customer is pregnant or has a newborn child, to receive relevant rewards of products and services
  • Cross marketing rewards: e.g. a cinema ticket offers popcorn from a nearby shop or drinks from a nearby bar before the movie starts etc.

Loycha is also bringing new marketing for communications and rewards which when viewed by customers, will enable them to earn coins. See “​New way of marketing and advertising - WIN-WIN model”​​ part of this paper for more details.

Win win model

Not an easy way for NGOs, foundations, people in need, sports teams etc. to collect funds through loyalty donations

NGOs, foundations, people with the health problem that can not afford their hospitality, sports teams, companies, etc cannot use loyalty systems for their needs. They cannot receive points as a donation or as a percentage and convert them so that they can use them to philanthropic initiatives.


Enable easily the NGOs, foundations, people in need, teams etc to collect coins through their wallet

Via a wallet that is used in blockchain, all validated NGOs, foundations etc are able to collect funds through two ways:

  • Through direct donations from customers
  • Through memberships of customers which allow customers to transfer directly percentages of their spend to them.

All they will need is to prove that they are legal and they fulfil the terms and conditions of Loycha to open a wallet.


Very bad customer experience for customers

Most customers complain about very bad customer experience about their loyalty programs. Many loyalty websites are limited in scope for things that can be done or not mobile friendly, etc. Sent emails or calls dropped to call centres to receive answers after many days.This again leads to disengagement from programs.


Modern mobile app with all services included

All services mentioned in this paper will be provided via the mobile app through smartphones. We are designing the app in such a way that every transaction will be simple and intuitive. Mobile apps in Android and IOS will have full functionality, starting with the Wallet which will enable customers to collect and spend coins, transfer coins, donations, receive notifications about new rewards, etc.


No single currency convertible among partners

One of the reasons that there are limited partnerships between loyalty companies is that each company has its own loyalty system and each of them has its own currency. So it's almost impossible to convert currency between programs. They need to make an agreement first on how much company A’s points value Company B’s points. They then need to create rules and services. After this, they are able to convert between each other. During these conversions, customers also frequently lose value as are very high or conversation rates are not adequate.


Single coin for all partners

As mentioned in the Abstract and within this paper, we are creating a coin, a cryptocurrency coin which will be used among all partners and will have the same value. So we are removing the confusion of converting points around partners. We are creating a single value coin which will easily be transferable among wallets.


​​Long processing times of awards and redemptions

If we take as example airlines or car rental companies, customers make a flight, book and do the check-in. But they don’t receive their points immediately after check-in. They need to wait up to 3 days, sometimes longer, to receive their awards. After that, they will be able to see their points and make redemptions. These waiting times are due to overlong processing times.


Near REAL TIME processing time of awards and redemptions

By using blockchains technology, if we take as an example the previous examples, customers that make their check-in by scanning a QR code, will have their coins credited by the time they are seated in the aircraft. This will enable customers to redeem their coins for any other purpose immediately, possibly for an in-flight meal. This will make the processing of awards and redemptions almost and transactions will move much faster than traditional interfaces that work now.


​​Lack of security in current centralized technology

Most banks, loyalty system holders and other traditional systems store information in centralized technology which means in a central database. This is a big lack of security in case a hacker arrives to breach that single database after which it can gain access to all data and can change them as per their need or steal the customers' information and use their data, like credit cards, or points or whatever they use. This happens very often. They are even more open to DDOS attacks that sometimes block their systems from groups like Anonymous etc.


Blockchain and distributed ledger

Bitcoin was invented in 2009 and was the first application of blockchain and distributed ledgers where information is stored in a peer to peer network and distributed among nodes. During these nine years, there has not been a single hack to Bitcoin itself. This doesn’t mean that it won’t or can’t happen. However, the security of blockchain and distributed ledgers makes it extremely difficult in comparison to traditional centralized technology, which is also considerably more expensive. Because Loycha will be using the same technology, meaning the blockchain and distributed ledger (data storage is distributed among nodes) that uses crypto and mathematical algorithms to achieve the same, data breaches will be near impossible. Even if a node or few of them are hacked and data inside them is breached, there will be thousands or hundreds of thousands of copies around the globe that will prevent the system from collapse and will ignore only those nodes and continue to work normally.


Liquidity of points

There are some loyalty programs that provide some form of cashback which in terms of rewards is very low compared to what customers spend. Some loyalty programs (the numbers are few) enable customers to convert points to cash, but again the transaction fees make this unattractive.


Trade coins in exchange markets

Loycha is at the same time a cryptocurrency which will be traded among cryptocurrency exchange markets and this will enable customers to convert these to bitcoin or other cryptocurrencies and will also enable them to cash back their earnings. This will be a huge opportunity for customers as they will have a wide choice of what to do with their coins.