KPMG Study Confirms US Consumers Are Ready to Use Blockchain Digital Tokens
Nicholas Otieno Sep 29, 2019 08:21
Data don’t lie. New research from KPMG investigated how consumers feel about the application of blockchain digital tokens. It turned out that consumers believe that the blockchain-baked tokenization could significantly transform the way businesses interact with the public. But it emerged that most businesses have not embraced the new technology. Now, you can guess the implications.
According to the latest survey commissioned by KPMG, US consumers are more willing to use blockchain tokens. The study released this week indicates that regardless of background or age, US consumers are becoming more open to using digital currency tokens.
With advanced technology tools being applied, they become more familiarized with the use of various forms of virtual currency as a means of payment.
But what does this mean for businesses? Aplenty. Thanks to the increased adoption of blockchain technology.
Businesses are discovering new uses for tokens which can securely and accurately track the change of value across C2C, B2C, and B2B environments.
In particular, the willingness and readiness to embrace tokenization show much about consumers. In the entire recent history of technological advancements, it is the consumers who have influenced the evolution of innovation models from concept ideology to acceptance.
Consumers were the first to embrace high-speed data and e-commerce. Furthermore, it was consumers who driven the acceptance of smartphones.
Moreover, it is the consumer who is already influencing the marketing for blockchain digital tokens.
Now, let us analyze the key findings of KPMG’s recent research to understand the perceived benefits of virtual currency tokens.
Early Adopters: Generation Z
Generation Z is more accepting tokenization than any other demographic generations. 83% of U.S. citizens surveyed, ages 18 to 24, identify themselves as being interested in the use of tokens in the future. More surprisingly, over half of older Americans, - ages 65 and up – mention that they are also interested in using tokens in their business transactions.
Since consumers across generations increasingly show the willingness to accept and appreciate the use of digital tokens, the opportunities in a C2C or B2C environment seem endless.
Generation Z is a blockchain generation. This generation is characterized by people who were born after 1995. One characteristic recognized among these people is that they are immensely inclusive pragmatists. We all know that they are cryptocurrency-friendly. However, how they embrace democratic socialism, decentralization underlying blockchain tech, and new app experiences that leverage peer-to-peer commerce undoubtedly shows the future.
Easy Method of Payment
An estimate of 63% of the Americans surveyed mentioned they regard blockchain digital tokens as an easy method of paying goods and services.
Not my words, you can clearly see that generation Z is a new generation of customers. They see tokens as better than cash. Also, they see tokens as global, instant, and easy to use. The instant settlement, and near-zero fees, and no chargebacks are some of the plenty of benefits associated with tokens.
Tokens give consumers the freedom to move their money any way they want.
Tokens have stability and low-price volatility because they are pegged to major fiat currencies such as the US dollar, Pounds, or Euros. This explains the reason consumers commonly use blockchain digital tokens to facilitate the exchange of services and goods.
Stability and low-price volatility remain the key in digital currency as they ensure that sellers and buyers do not lose in a trading activity because of price fluctuations underlying in the payment instrument.
Tokens, therefore, work excellently for practical use of digital currencies involving trade activities between consumers and businesses on a blockchain network as a unit of accounting, a medium of exchange, and store of value for everyday and routine transactions of both small and large values.
As applications that make use of blockchain technology and digital tokens become more mainstream, they assist in providing global suppliers, consumers, and merchants with more secure, faster, and cheaper alternatives to wire transfers, debit cards, credit cards, and cash.
The Use of Loyalty Rewards
KPMG research indicates that approximately 55% of the respondents surveyed said tokens would enable them to make use of loyalty rewards in more meaningful ways.
Yes, I’m now talking about ‘earning’ points here.
You may have experienced grocery store rewards, hotel reward points, or ‘earning’ air miles. My assumption remains true because several points programs have been running for years, and numerous millions of consumers have benefited from them.
Various companies run reward programs to encourage consumers to buy more.
The more you earn the points, the better, and the points you ‘earn’ are stored in the company’s database.
Nowadays, you can earn tokens just like earning points from the company you’ve been transacting goods and services with.
Several consumers associate ‘loyalty’ with ‘points’ from credit cards, hotels, airlines, and others. With such programs, the connection is clear between future benefits and today’s purchase.
One airline introduced a digital loyalty program running on blockchain as a way of encouraging its clients to use their points in smaller amounts. With tokens, consumers can use the digital wallet to buy a variety of merchants like restaurants, hotels, departmental stores, and more. Also, consumers can transfer points from a particular merchant to another (e.g., an airline to a hotel) or vice versa.
Of the 1000 U.S. residents surveyed in the KPMG research, 82% revealed they are more willing to use tokens with businesses they already purchase from.
Also, 81% said they would be inclined to trust tokens they get through a loyalty system of a business. This promotes their confidence and trust in those enterprises. This also makes tokenization an instrument for business production and maintaining loyalty.
But, according to the study, now the main challenge is that there aren’t several businesses using digital tokes for rewards programs.
The survey shows that about 86% of respondents felt great loyalty to the coffee shops and restaurants they visited, as well as their banks of choice. Another 81% expressed loyalty to electronic firms, whereas 79% mentioned they were consistent customers of some media and telecom firms.
Final Thought
KMPG reveals that businesses which aren’t taking advantage of digital assets and tokenization for rewards, and don’t already have a loyalty program in place, are missing out great opportunities. By utilizing tokenization, businesses can build new forms of the value of exchange in an existing network like allowing consumers to utilize loyalty points for purchases with a variety of merchants.
The technology is in place, and the market is ready. It is time for businesses across sectors and of all sizes to embrace blockchain digital tokens and tokenization to revolutionize their business models. Otherwise, they risk being left behind.
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