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Wanted - Flexible Online E Currency

As we approach the festive season, all of us get into human kind's greatest obsession - shopping!  Over the past decade, online shopping has come to generate big bucks for businesses. So much so, that 'clicks' are beating 'bricks' by a wide margin in many countries.

While I browse through the various online shopping malls - a thought often hits me - why can't someone enable a common 'bridge' for shopping online? Why is everything designated in currency?

What I mean here is - how do use my airmiles to shop online? I would really love to use my cards membership reward points ON THE WEB for shopping - without the constraints of redemption of vouchers at the 'tie ups'.

I think there is a huge opportunity here for the likes of Pay Pal, Google or even a Mobile phone operator. Offer a 'clearing house' where the world can come and 'convert' their reward points, air miles, membership points and even mobile air time; into units of E currency that translates to purchase of goods and services.

There are some examples of such online usage - American Express in the US allows cardmembers to use their MR points to book hotel rooms and travel tickets at participating outlets. A MSP in Kenya allows its subscribers to transact using their 'airtime' as currency. But these need to be extended to the wide world outside their closed loop.

So, here's the opportunity - use all your accumulated non-financial points/miles/rewards online to shop. It works to the benefit of all parties - the points issuer gets more 'burn' of points, the consumer has more purchasing power, the online malls get more business.  Also, such transactions are likely to be more secure than credit/debit card usage online. Whoever heard of sharks stealing 'airmiles'!!


PS: I see a lot of studies outling business opportunities in mega billions. For e.g. a latest study by a consulting firm claims that the global P2P opportunity by 2012 is 158 B US dollars. Now, I have been seeing a whole of these projections on Chip card usage, online banking, NFC, Mobile banking. The common thread is the big potential opportunity sized up in Billions at a point of time in future. I would really like to know if anyone is tracking these grandoise projections reports. Does anyone evaluate whether these Billion dollar projections actually pan out??


Comments: (1)

A Finextra member
A Finextra member 20 December, 2007, 21:42Be the first to give this comment the thumbs up 0 likes


I think you're referring to two different concepts: (1) centralized clearing warehouse for e-commerce; (2) existence and usage of e-currency.

In regard to the clearing warehouse, I don't know who can exert enough power to integrate different industries and companies into a single entity.

In regard to e-currency, the QQ virtual coin in China evolved from an online payment system into an e-currency that can be used extensively in e-commerce and in the real world. Demand is so high that Bank of China was obliged to intervene. The WSJ article below is quite interesting.


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