Cryptocurrency in a loyalty program? Why not, says St. Paul-based company

Augeo, the St. Paul-based leader in providing enterprise wide loyalty and engagement platforms is introducing a program that can let participants exchange points and cash-back awards for cryptocurrencies.

The new program, Heaps, is being offered in partnership with Las Vegas-based Prime Trust, a financial services company that provides the financial underpinnings for fintech and digital asset companies.

"We really think that points can play a key role in creating the initial foray and opportunity to learn and enter the cryptocurrency space," said Peter Schultze, Augeo vice president of Crypto Loyalty, in an interview. "Heaps makes it easy for users to buy crypto with points or cash, store digital assets in a secure wallet, track portfolio performance and learn about crypto investing."

The Heaps program will be a standalone platform for cryptocurrency, but it can be integrated in the loyalty and rewards programs from Augeo or others.

Heaps will let users redeem their points and cash-back awards for cryptocurrencies and also allows additional ways to buy cryptocurrencies through the platform. Subsequent phases of the program also may add NFTs, or non-fungible tokens, to the options. The program is expected to officially launch on or before June 1.

Cryptocurrencies are a digital or virtual form of money that are not backed by central governments but typically rely on distributed blockchain technology to record transactions, prevent counterfeiting and assess values of the currencies.

A multitude of cryptocurrencies exist but Heaps will work with five to 10 leading types, including Bitcoin and Ethereum, Schultze said.

"There is a surge in public interest in cryptocurrency. That, intersecting with the billions of points that are redeemed each year through loyalty reward programs, is where this opportunity really elevates," said David Kristal, Augeo's founder and chief executive and a member of the Star Tribune's board of directors.

Companies like to use reward and loyalty programs to drive consumer engagement with their brands and lead to incremental sales. Other companies have already integrated cryptocurrencies into some of their reward and loyalty programs.

The Heaps program will help users understand cryptocurrency investing by offering tutorials and will give users a platform to earn additional crypto awards from purchases made through more than 30,000 local, national and online merchants, or through direct purchases.

Kristal believes growth is inevitable in digital currencies but said the company isn't advocating cryptocurrency with Heaps. The company looks at Heaps as an education platform that can introduce people to investing in cryptocurrencies and eventually NFTs.

"Heaps will play a significant role in terms of education and creating access to a population that perhaps might not generally have access to cryptocurrencies," Kristal said.

Prime Trust will provide the transaction services and assure compliance standards are met. It provides the conduit and infrastructure to help Heaps users to acquire, access and account for their cryptocurrency investments.

As a digitally focused company, Prime Trust already works with more than 700 integrated platforms including crypto exchanges, NFT creators, digital wallets and investment providers.

"Our collaboration with Augeo enables Heaps to innovate and scale securely at an accelerated pace," said Daniel Sofer, vice president of institutional sales for Prime Trust, in a news release. "Through Heaps, Augeo is reimagining rewards programs for the digital future."

Cryptocurrency broken down

What is cryptocurrency? In its simplest form, a cryptocurrency is a computer code generated by publicly available software that allows people to store and send value online. There are several brands of cryptocurrency including Bitcoin and Ethereum.

What is bitcoin? When the code verifies a transaction using cryptocurrency, it groups it onto a public record known as a blockchain. (This file contains every transaction ever made and can take days to download the first time.)

How do I access my cryptocurrency? You create a wallet and with it a complicated password that's generated by a code. This "private key" is akin to your personal signature and must be used to make transactions.

Source: Staff and wire reports