ezRez Software, Inc. recently announced that it will be launching a new digital wallet product that will allow members of loyalty programs to use their miles and points as currency. ezRez is partnering with PayPal and MileagePlus for the product launch and expects to partner with other airline and hotel loyalty programs and payment providers in the future. We spoke with Dario Ambrosini, Vice President, Marketing, ezRez Software, Inc., about the upcoming launch.

InsideFlyer
Can you tell us a bit about your new digital wallet product?
Dario Ambrosini
It’s a fairly simple concept. ezRez already works with over 10 clients within our core loyalty travel business, which gives us direct access to their loyalty point banks. For the new offering we are building an interface that will allow members of participating loyalty programs, as in the case of our launch partner, MileagePlus members, to take their frequent flyer miles and use them to buy goods and services with merchants that accept PayPal. Since our current platform already gives our loyalty clients full segmentation control based on membership tiers as well as points-to-cash conversion capabilities, we’re simply adding an additional redemption option that will enable reward program members to use their points as currency and the Internet as their redemption catalogue.

IF
How did ezRez come up with this idea?
Ambrosini
This is an evolution of our existing platform. We’re constantly talking with clients to see what products they want, and loyalty has been especially popular the past couple of years. A lot of our clients work with multiple suppliers and manage their point burn via multiple systems as well–a process that can become unwieldy. We heard loud and clear that they wanted a single platform to manage all redemptions, so we started building it since we already had the key elements in place. We’ve powered travel award sites for years, and earlier this year we launched a product that allows the airlines to sell frequent flyer award tickets based on the market price of the flight. We originally expected to introduce a merchandise redemption platform since this is a big redemption category. Being in Silicon Valley, we were also talking with technology companies and saw that digital wallets are really big right now. A few of those companies asked if we could power point to cash conversions. We put two and two together and came up with this product.

IF
Do you think American Airlines is moving away from the static redemptions of 25,000 miles, 50,000 miles, etc. with the introduction of Dynamic Air Awards?
Ambrosini
I think versus moving away from anything, the airlines are intrigued by the idea of utilizing one platform to manage all of their loyalty point redemptions, maintaining control through a single unique technology.

American’s AAdvantage program was the first ezRez client to launch market-priced flight awards with their Dynamic Air Awards, and soon we will launch a combined offering with Aeromexico’s Club Premier (partly owned by Groupe Aeroplan) that will give their members access to traditional fixed as well as market-priced flight awards. Once the airlines see how American and Club Premier perform, in my opinion we will begin to see a shift toward dynamic awards.

IF
We read the digital wallet product will be implemented with PayPal in 2012 with select merchants. Can you tell us more?
Ambrosini
The mileage programs and hotel programs will have complete control over how their members redeem points. On the payment side with PayPal, we’re going to build an open connector where the points can be redeemed anywhere that PayPal is accepted. We mention “select merchants” because first, the merchants need to accept PayPal. Second, each reward program will determine which merchants are allowed to accept member point redemptions.

IF
Will there be a way for shoppers to easily compare the price to buy with cash vs. the price to buy with miles/points?
Ambrosini
When shopping with miles, users will go directly to the merchant and the price will be displayed in dollars or other currency as it normally would be. At checkout, PayPal will present the option to use MileagePlus miles, at which point the price will be displayed in miles. Conversion ratios are not published and vary across programs and membership levels, but a simple calculation could easily lead to a conversion factor.

IF
Does ezRez have any other new products in development that you are able to tell us about?
Ambrosini
We’ll have more news in the next couple of months. We constantly talk with our clients and there’s been strong demand for another product that we’ll be introducing soon.

IF
Anything else about the digital wallet product?
Ambrosini
One of the things we found when talking to our loyalty program clients is the huge growth in award points. There’s about 30 trillion award points outstanding. That’s a liability for our partners and it’s a revenue opportunity for programs that sell these miles. So we really feel the future of loyalty is moving to a single platform where programs can manage those miles in a cost effective manner.