Bank of Baroda Pilots Industry-First “Merchant Loyalty/ Cashback Programme”

Merchant Use Case through Programmable CBDC

Chandigarh: Bank of Baroda (Bank), one of India’s leading public sector banks, under the guidance of Reserve Bank of India, today announced the pilot launch of a new functionality for merchants built on the “Programmability” functionality of Central Bank Digital Currency (CBDC) – the “Merchant Loyalty/ Cashback Programme” in collaboration with a fintech company. This industry-first initiative enables small and medium merchants to independently design and launch loyalty/cashback programmes for their customers, usually designed by large brands, using Bank of Baroda’s “bob Merchant App”.

Merchants such as local retail shops, grocery stores, pharmacies etc that have an account with Bank of Baroda and are registered on the bob Merchant App, can now independently design and run Cashback/Loyalty programmes, without the need to make any corresponding investments in procuring the infrastructure or software to operate such a reward programme.

This initiative will go a long way in boosting the adoption of CBDC, making it more appealing & rewarding for merchants and customers. It will also help small & medium merchants to stay competitive, encourage repeat business and expand their customer base.

Speaking on the launch, Shri Sanjay V Mudaliar, Executive Director, Bank of Baroda said, “Bank of Baroda continues to be at the forefront in driving innovation in the banking sector. Our new “Merchant Loyalty/Cash Back Programme” using Programmable CBDC (PCBDC), a first in the Indian banking sector, is an innovative use case that empowers our small and medium-sized merchants to create tailored cashback offers that will foster greater customer engagement & retention. This initiative will benefit both merchants and customers.”

Key Features of Bank of Baroda’s “Merchant Loyalty /Cashback Programme” Merchant Use Case through PCBDC

·         Bank’s merchant customers will configure their own cashback or loyalty programme using the “bob Merchant app”, specifying the period of the campaign, percentage of cashback and validity/expiry date of the cashback received by customers.

·         During the campaign period, customers (presently for BOB customers only) who make a purchase using the bob World Digital Rupee app, will receive cashback in the form of PCBDC from the merchant as per the prevailing offer at the merchant outlet.

·         These PCBDCs can be used by customers at the specific merchant outlet until expiry.