Circle signs MOU with HKT for Blockchain-based loyalty solutions for Hong Kong merchants

Stablecoin issuer Circle announced on Tuesday that it has signed a memorandum of understanding (MOU) with HKT, a major player in technology, media and telecommunications.

The main objective of this collaboration is to explore opportunities to create blockchain-based loyalty solutions tailored to the Hong Kong business landscape.

Cercle-HKT collaboration

According to the blog post, Circle’s expertise in Web3 services, combined with HKT’s commercial network and customer engagement resources, will enable the two companies to develop Web3-based loyalty solutions to enhance consumer interactions with merchants, potentially creating more interactive engagement experiences.

In an official statement, Circle co-founder and CEO Jeremy Allaire said:

“We are delighted to partner with HKT to bring our Web3 services to the forefront of customer loyalty innovation. This collaboration is a testament to our commitment to helping businesses unlock the potential of blockchain technology to create value-based customer experiences, redefine loyalty programs and provide merchants with the tools they need to thrive in the digital economy.”

Well-known companies like American Express and Marriott have seen remarkable engagement and revenue per customer, in part due to the strength of their loyalty offers. These types of programs have also become popular among Gen Z and millennials in Hong Kong. However, consumer expectations around them have changed over time.

Circle cited a Statista report stating that the global loyalty market is valued at approximately $5.57 billion, with 70% of consumers indicating that loyalty programs play an important role in their purchasing decisions.

Recognizing the advantages of on-chain loyalty programs over traditional methods, the crypto company launched its “Smart Contract Platform” in March of this year to create on-chain loyalty options within applications, making the ‘obtaining rewards and redeeming is a smooth process for users.

Benefits of Blockchain in Loyalty

A recent Deloitte report highlighted that traditional loyalty and rewards programs are not achieving their full potential due to several key challenges. These include account inactivity and low redemption rates, which hinder program effectiveness and customer engagement.

In addition, delays in processing rewards and high transaction costs contribute to inefficiencies, further exacerbating problems related to system management and customer acquisition. The report also points to low customer retention as a critical concern, suggesting that these programs struggle to maintain customer loyalty and engagement.

The company believes that blockchain could eliminate many inefficiencies.

“So we know what’s behind this lack of efficiency in execution: fragmented and clumsy systems that rely on centralized administration that requires the coordination of multiple parties through trusted intermediaries to move processes along the chain of value. Ironically, blockchain responds to this problem by removing trust from the process and decentralizing it.”

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