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Zero-party is the new first party, and 4 other key takeaways from Money 20/20

Money 2020 Las Vegas Conference Takeaways

Missed Money 20/20 this year? Not to worry — Bakkt’s team was on the front lines attending sessions, networking with leaders in the financial space, and driving conversations with key partners and audiences.  

Topics ranged from cryptocurrency payment trends to Web3 impacts on customer experience. Here were the key items we took home: 

1. Regulation is driving a significant number of conversations and questions about crypto and Web3.

Over twenty event sessions in Money 20/20 were dedicated to topics on regulatory policies and their impact on cryptocurrency, fintech, and digital payments. The U.S. federal government’s attitude towards crypto remains relatively cautious, as suggested by President Biden’s 2022 executive order that promised to “address the risks” presented by the digital asset industry, at the same time as “harnessing the potential benefits.”1

The securities and exchange commission (SEC) has also been vocal about its intent to increase regulations on crypto, with the current chair, Gary Gensler, stating his view that many cryptocurrencies on the market should be viewed as securities, and thus subject to the same governmental oversight.2 While a consensus on how to regulate crypto has not yet been reached, Bakkt has opted to be federally regulated in the most comprehensive way available. We believe our separation of custody and exchange functions provides additional protections to investors and minimizes potential conflicts of interest. If the time comes for a comprehensive federal regulatory scheme for digital asset companies to adhere to, we are ready.

2. With inflation rattling the economy, offering financial rewards can help drive customer loyalty.

Several panels discussed unused loyalty points and strategies for creating a better customer experience. Brands should make sure customers know what options they have for redeeming financial rewards on essential products that are more expensive today. As inflation remains high, prices for basic goods are rising.3 And in economic times like these, customers especially appreciate rewards that ease the strain of everyday purchases on their wallets.

In fact, even before the economic downturn, cash back was already a preference among consumers, with over half of them preferring this redemption option over earning points.4 Loyalty programs that recognize this may see customer affinity to their brands increase, as consumers see the tangible benefits being brought to them.

3. The lightning network has immense potential.

While it didn’t get any sessions, crypto influencers and users made sure lightning saw time during happy hour conversations. The lightning networks a second layer added to bitcoin’s blockchain that allows off-chain transactions between parties — opening opportunities for faster payments and making “paying for cocktails with crypto” a reality.

Bakkt is excited to be presenting on the lightning network at the upcoming “Adopting Bitcoin” conference in El Salvador. Although the full extent of lightning’s use cases have yet to be realized, we believe the network has the potential to transform the crypto industry in a number of exciting ways.

4. Zero-party data is the new first-party data.

It’s no secret banks and brands need to create more personalized experiences to grow customer retention. What’s challenging are the roadblocks that keep getting in their way, such as capturing the right data, working with data privacy laws, and getting rid of data silos.

Gathering data is essential to personalization, and brands should be selective and focus on collecting information that is most relevant to serving their customers. One way to collect the most relevant information? Ask customers for it directly, also known as “zero-party data.” If you can show your customers that there are benefits to sharing their information—access to exclusive offers, discounts, or early access—they’ll see why it’s worthwhile to do so. Read more in Loyalty360’s Digital Roundtable with Bakkt: First- and Zero-Party Data and Impacts on Customer Loyalty.

In addition to relevant data collection, internal silos of data can also present obstacles when it comes to creating accurate customer profiles. If different types of information are stored in different places, it can be challenging to paint a holistic picture of the consumer. Several sessions outlined the need to enhance payment and rewards experiences to truly delight customers and address these issues. 

5. Innovation in digital payments will transform growing industries. 

Another exciting topic of discussion was the potential for cryptocurrency and other digital payment forms to transform key industries. It seems like the table has been laid for the gig economy to become an early adopter of cryptocurrency payments. In fact, 20% of gig employees said they have already been paid in crypto, while nearly 50% said they were open to receiving a portion of their paycheck in crypto.5 Many cite quicker transaction speeds, as well as the potential for their paychecks to increase in value as the main drivers.

Sports betting is another arena in which digital payments have the potential to change the game. The practice is now legal in more than thirty states, and payments have become an integral source of growth for the gambling industry. It’s already transforming the modern casino resort experience.

Quite a few sessions were held to discuss banking challenges with cannabis, which is now a $30 billion industry. While banks and credit unions are hesitant to provide financial services to cannabis-related businesses, crypto solutions (see “Lightning” above) could immediately benefit these “cannabusinesses” by normalizing electronic payments and reducing the industry’s reliance on physically settling transactions with cash.

Bakkt® stays on the forefront of the cryptocurrency, loyalty, and digital payment space to ensure we can support better your customer experiences. Be on the lookout for additional reports and trending topics, or reach out to our team today to learn more about what we’re building.

This does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell, or otherwise transact in any investment, including any of the product(s) mentioned herein, or an invitation, offer or solicitation to engage in any investment activity. This information is provided solely on the basis that you will make your own investment decisions, and Bakkt does not take account of any investor's investment objectives, particular needs, or financial situation. It is strongly recommended that you seek professional investment advice before making any investment decision.

1 The White House. “Fact Sheet: President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets.” Released on March 9, 2022 | Accessed November 2022.  

2 U.S. Securities and Exchange Commission. “Prepared Remarks of Gary Gensler on Crypto Markets.” Speech held April 4, 2022 | Article accessed November 2022.  

3 Forrester. “Loyalty is a Lifeline During The Inflation Crisis.” Accessed 11/2022.

4 Bakkt Consumer Survey (n=1000, December 2021)

5 Bakkt Consumer Survey (n=1018, July 2022)