Reward point systems are key to drive customer engagement and loyalty, providing users with tangible benefits for their continued use of particular payment instruments. In the competitive Mobile Financial Service (MFS) market of Bangladesh, customer reward programs play a critical role to retain and engage users. Such loyalty program, usually found for credit cards in Bangladesh. Though those reward points have very limited redemption option, cardholders are very interested to earn reward point by making transactions using the cards.
bKash and upay—two of the leading MFS providers in Bangladesh, both have developed customer loyalty strategies aimed at increasing customer loyalty, encouraging frequent transactions, and enhancing the overall user experience. The customer loyalty strategies that include earning reward points and redemption for a tangible benefit. However, their approaches differ significantly in structure, earning opportunities, and redemption flexibility of the reward points.
Brand Strength and Market Leadership
Before start discussion on reward programs developed, let us have a look into the brand strength and market positioning of both the brands. The effective impact of a reward program on customer retention & engagement largely depends the share of wallet and level of market penetration. Clearly bKash enjoy competitive advantage but being a challenger brand upay emerge to be noticeable disruptor for bKash.
bKash: Market Leader
- Market Presence: bKash is the dominant player in the MFS market in Bangladesh, with a market share of over 70%. Launched in 2011, it has built a strong brand presence and trust among customers through consistent service quality, extensive agent networks, and partnerships with banks and merchants.
- Brand Loyalty: bKash enjoys high brand loyalty due to its first-mover advantage, large customer base, and long-standing trust among users. Many customers rely on bKash for daily transactions, creating a strong habit and emotional attachment to the brand.
- Network Effect: With its vast network of users, agents, and merchants, bKash benefits from the network effect, where the utility of the platform increases as more people use it, reinforcing customer loyalty.
upay: New Entrant with Growing Popularity
- Emerging Player: upay, launched by United Commercial Bank PLC (UCB) in 2021, is relatively new to the MFS market but has gained attention due to its innovative features and competitive offers.
- Differentiation Strategy: upay has positioned itself as a cost-effective alternative to bKash by offering lower transaction fees, better cashback offers, and more integration with banking services.
- Growing Customer Base: While upay’s brand loyalty is still developing, its strong customer-centric approach and targeted campaigns are helping it capture market share, especially among younger, tech-savvy users.
Overview of bKash Reward Program
In order to ensure value for its customers, bKash develop reward program based on transactions using the MFS platform. By using bKash services regularly, customers can earn bKash points and claim bKash rewards by redemption of the points. Furthermore, it offers level upgradation by more use of the services. The customer can see his/her progress in the level progress bar from bKash App. Major points of bKash reward programs can be outlined as below –
- Point Earning and Redemption: The earning and redemption parameters of bKash reward points developed based on backend algorithm. Neither the ratio of reward points against transaction nor the point conversion is fixed or specific. Same transaction may have different reward points for different customer. Simultaneously, the same customer can earn different reward points for different service with same transaction value.
- Customized Offer: The earning patterns and redemption is not unified for all customers across the platform. The whole algorithm design in such a way that, besides transaction volume and service type, certain other parameters are in action to determine eligible points and conversion of the points.
- Progress Level: bKash have customer level based on earned reward points. By making more transaction, customers will be able place himself/herself in better position. The level varies from bronze to diamond. Once the customer required points to reach the higher level, he/she will be upgraded to that level automatically. Customers at different level enjoy different benefits to earn and redeem reward points.
- Point Redemption: bKash allows users to use the point to cashback offers. bKash determines which offers can be avail by point redemption through backend algorithm. The points of bKash reward is not convertible to cash directly, rather the redemption capability is linked to certain offers of bKash.
- Point Validity: The points earned from bKash reward is subject to validity. The validity period for reward points is 12 (twelve) months. Unused reward points will expire after this period. In order to avail offers using the earned point, customer must redeem the points within the validity period.
Overview of upay Reward Program
upay also offers transactional benefit in the form of reward points. The customers of upay can earn points by making selected transactions using the MFS platform. And the redemption facility also allows the users to get cash reward against the points. However, upay found a different way to engage customer with reward program. Customer need to spin a virtual wheel to earn the points against a transaction.
- Point Earning and Redemption: upay customer will get reward points against transaction value on random basis. The algorithm is designed in a way that, each time customer will get a minimum value of points based on probability set by upay. Neither the points is not fixed or connected to transaction value. However, the points is only for selected service with minimum volume of transaction.
- Standardize Offer: Unlike bKash, upay reward program is designed in standard from. All the customers of upay have same possibility of earning points and get the redemption benefits. While, the point earning is based on probability, the redemption or conversion rate remain same for all customers across the platform.
- Gamification: upay reward program introduced in gamification pattern. After completing an eligible transaction, it appears a virtual spin wheel in upay app. Customer need to spin the wheel to earn reward points against the complete transaction. The gamification offers greater customer engagement and increases usage of app.
- Point Redemption: Unlike bKash, the redemption of upay reward points is more transparent. Customer earn point based on set probability but conversion remain static for all users. The conversion rate of upay points is 1% of earned points. Which means customer get BDT 10 cash reward for 1,000 points. However, the minimum points for redemption are 1,000 points for upay.
- Point Validity: upay have validity for both spin and points. Customer needs to spin the virtual wheel within 24 hours of the transaction. After that period, the pin wheel will be invalid. Furthermore, the validity of upay earned reward points is 180 days. Customer must redeem the points within the period to get cash reward against the points.
bKash vs upay Reward Program in a Nutshell
If we compare the reward programs between bKash and upay, we may find that both the operators have unique value for its customers. And both the programs have scope to develop further and incorporate greater value proposition accordingly. The comparison between bKash and upay can be summarized as below –
Recommendation and Concluding Thoughts
The reward program for MFS customers in Bangladesh driven by app-based customers. But inclusion of basic MFS users who have feature phone in reward program is important for both the providers. Additionally, instead of converting the points into cash, providers should offer direct point useability options for the users. It can be achieved through partnership with different retail industries. A collaborative approach for reward and loyalty program should be a integrated offer rather than standalone one.
Considering the growth of mobile financial service in Bangladesh, to maintain a loyal base is key to control share of wallet. Other MFS providers should also come up with reward programs like bKash and upay. Furthermore bKash and upay also need to continue expanding the program both horizontally and vertically.
