Oscar W. Jenkins, a British Internet entrepreneur, sees money in loyalty programs.
Mr. Jenkins, founder and marketing director of Uptime Group of London, says he sees loyalty points-things like frequent-flier miles-as not only a potential electronic commerce gold mine but also as something close to actual money.
Uptime Group, a year-old Internet security and advertising company doing business as Uptime Commerce, is promoting the idea of exchangeability of loyalty credits. Bonus points from a supermarket promotion might be cashed in for another company's merchandise or travel benefits.
It might be seen as an abstract form of barter. In a presentation last week to the RSA Data Security Conference, Mr. Jenkins defined it as "near money."
Uptime, a leading European provider of digital certificates for on-line commerce, contends that affinity rewards will inevitably become exchangeable as operators of the loyalty programs become increasingly competitive and intensify customer satisfaction efforts.
The "currency" would need the same security underpinning as Internet commerce-a public key encryption infrastructure and digital authentication, Mr. Jenkins said. And "the introduction of smart cards will bring open exchange closer," he said, because they lend themselves to consolidation of data on a single card.
Mr. Jenkins and Uptime's security and technology director, Cambridge University information security professor Vaclav Matyas, acknowledged to their predominantly American audience in San Francisco that they may be ahead of the U.S. curve.
While loyalty offerings are prevalent here, notably in the airline, petroleum, and credit card industries, to call them "near money" would be a stretch.
An exception would be Cybergold, an Internet-based cash rebate system. Multiple-application smart cards with loyalty components are well under way in Europe and Asia but still in the talking stages in the United States.
"In both loyalty schemes and electronic money, the United States is behind," Mr. Matyas said.
"Everyone is doing it in the U.K., and there is a lot of interest throughout Europe," advertising executive Bradley Crooks, another panelist at the RSA conference, said of loyalty-point systems.
"There is also an extension of loyalty schemes to the Web," where swapping would be easy and convenient, said Mr. Crooks, interactive manager of Saatchi & Saatchi in London.
Mr. Matyas said micropayment technology could handle on-line "near money."
Mr. Jenkins gave the example of Sainsbury, a U.K. supermarket chain that gives points to shoppers-double points when they use the Sainsbury Visa card-that can be traded in for Air Miles, a program owned by British Airways that operates both electronically and with paper vouchers.
He said in an open system, Air Miles might be applied to FreeRide, a Web promotion with prizes such as a free year of Internet access.
The public seems receptive to "near money" and banks may have to face this reality as they encounter "near bank" competitors like Sainsbury, Mr. Jenkins said.
