Singapore’s largest bank, DBS, has launched its Programmable Rewards program that allows its customers to use smart contract powered vouchers. The bank has integrated the e-voucher system into its payments app, DBS Paylah!, which has 2.9 million users. The blockchain-based vouchers are compatible with Singapore’s most widely used QR code payment formats, enabling distribution across 40,000 merchant outlets.
The bank is running a promotion enabling customers to convert rewards points into eVouchers, including offering additional cash back for a limited period.
Smart contracts attach conditions to the usage of the digital tokens. For example, it might be redeemable only at certain outlets, or be valid for a limited period of time. Conventional vouchers work similarly, but the key advantage is automation. Reconciliation is far simpler because there’s a shared record of transactions, and settlement can be automated through the conventional payment system NETS. This should lower the cost of managing rewards programs.
“By integrating our consumer and institutional banking capabilities with smart contracts and blockchain technology, we have created a transformative platform to rapidly launch and scale digital voucher programmes,” said Han Kwee Juan, Group Head of Institutional Banking at DBS. “This platform’s extensive reach, connecting millions of consumers with a vast network of merchants across Singapore, establishes a powerful ecosystem for impactful and scalable digital interactions.”
Apart from marketing initiatives, the bank is exploring deploying the system for employee rewards and government programs. This solution aligns with Singapore’s existing digital currency initiatives.
The Monetary Authority of Singapore has promoted the idea of Purpose Bound Money (PBM) for years, with DBS first participating in 2022 as part of Project Orchid. With PBM, money itself is not programmable, but has a digital wrapper. When the voucher is redeemed, the wrapper is removed, releasing the funds to the recipient.
The Programmable Rewards offering is part of DBS Token Services, the bank’s tokenization initiative that uses its permissioned blockchain.
For years there’s been significant promise in using blockchain for rewards. Some programs continue to operate quietly behind the scenes, while others failed to take off. One example is Bakkt, founded by New York Stock Exchange owner ICE. It made a significant investment in acquiring a major rewards software firm and created a blockchain-powered rewards app targeting consumers, but abandoned it due to lack of traction. The big difference with DBS is its eVoucher program is now part of an existing popular app with significant distribution.
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