Loyalty on Overdrive: Details from the Walmart Digital Currency Patent

Walmart is looking to create a digital coin similar to Facebook’s, but the coin’s design and its connection to a universe of real products suggest the world’s largest retailer is hoping to create a loyalty system on overdrive.

According to Walmart’s patent for the coin system, filed January 29th, 2019, “Walmart coin” is being designed as a stable coin with it’s value to be pegged 1-to-1 to equivalent US dollars held in reserve.

The coin’s ledger system will be used to collect data on consumer behaviour by, “overlaying the one digital currency unit with customer purchase history,” and could also function as a loyalty points system dolling out rebates and collecting “savings.”

Walmart’s digital currency could also be programmed to push surplus items by allowing customers to purchase certain items and not others.

As well, the coin might be used to make certain programs and deals available to certain customers and not others, though few details are provided regarding this:

“Like physical money, digital currencies may be used to buy any physical goods and services, but may also be restricted to certain communities…”

Like Facebook, Walmart combines a purported mission of social good with banking-style ambitions.

“Using a digital currency, low-income households that find banking expensive, may have an alternative way to handle wealth at an institution that can supply the majority of their day-to-day financial and product needs.”

The company cites many points of friction its currency system could profitably address:

“Many people are from low-income households where credit can be a problem and carrying cash can be problematic. Keeping and accessing cash can be expensive for low income households simply because those customers may live week to week and may have little cash in their bank accounts–if they have bank accounts. The cost of having little money is high because of frequent short-term borrowing, accumulated interest on short-term borrowing that becomes long-term, high bank fees proportional to wealth, high credit card fees, and high payday loan interests, all of which can take money away that could be available–and would be used–to buy necessities. Providing digital currency based on blockchain may overcome the drawbacks associated with the low-income households.”

Walmart is already using blockchains to track the progeny of leafy greens, and the company also registered a patent for a system for storing emergency medical records on blockchain.

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