This week we are trying to work out how we can get more cryptos into your wallet. With bonus coins up for grabs, will spend-to-earn bring crypto to the masses? How do you go from a good idea to a deal with VISA? We speak to Bloom Coin's founder Justin Chan to find out.
Walter Jennings: Welcome to Waves in the Finoverse. I'm Walter Jennings, the host of a podcast brought to you by Finoverse. We're talking with the wavemakers creating ripples, waves and tsunamis across finance, crypto, FinTech, Web3 and beyond. Listen weekly to hear the changemakers talk firsthand about their experiences in this dynamic industry.
Welcome back. And I'm in the booth with Justin Chan, the co-founder of Bloom. Thank you, Justin, for joining us.
Justin Chan: Thank you for having me.
Walter Jennings: You're a Hongkonger, I'm a Honkonger. Give me the elevator pitch. We're on the 20th floor and we're heading down, off you go. Introduce us to Bloom.
Justin Chan: Sure. So Bloom is really a rewards platform. And all it takes is really one Visa card that you have in your wallet, what we're taking that is linking it to the app. And from there, you're able to actually earn Bitcoin, Ethereum, Solana and over 18 types of cryptocurrency. So we're trying to bring the Web3, crypto and digital assets to the everyday person in a way that's really easy to do, in a way that's habitual through everyday spending on your card.
Walter Jennings: So this is a rewards program that pays points in digital assets.
Justin Chan: Exactly, exactly. And you don't need a new card. So we're not trying to tell you to issue a new card to get a new banking card. We're saying what you have in your pocket can now earn crypto.
Walter Jennings: How did you get this tie-in together with Visa card? Because they seem a little bit of CeFi or centralised finance.
Justin Chan: I wouldn't say it was easy. I mean, it takes a lot of due diligence on their part. Their standards are extremely high and that's what we hold ourselves to. We want to be quality in terms of how we do business. Our backing is also strong, from the ZA group based in Hong Kong, Shanghai, and Shenzhen as well. And so we have strong backing there. And that's basically how we started the tie-in there.
Walter Jennings: Oh, great. Well, I have a traditional bank and a virtual bank and I bank with ZA, so I'm already in the family I imagine. Now, Justin, every founder has a hero story. Tell me what led to the creation of Bloom, and what was the spark and the impetus for the idea?
Justin Chan: Sure, I think a lot of people get very wary of loyalty points programmes. I mean, in Hong Kong, we have Yuu points. And it can be annoying, right? You're standing in line, and you're thinking, why do I have to take my app out, and I have to update it. And there's 10 people behind me and it's annoying. And we thought, well, you know, what's the base layer of an actual payment that allows us to be able to reward points. And that's where visas time came in, which is it's not related to actually having to take a new app out. But basically, through Visa, were able to recognise that transaction and just rewarded on that transaction automatically. So you don't need to take app out. And so it was from like an annoyance of actual loyalty points.
Walter Jennings: I was in a Hong Kong comedy club, and the gentleman who was doing stand-up saidhe had an existential crisis at 7/11 when the woman turned to him and said, y-u-u?
Justin Chan: That's a good one.
Walter Jennings: He hadn’t realised it was loyalty points. Now look, howwould I sign up for Bloom? Do I have to take out a dedicated Bloom Visa card?Or if I have any Visa card I can sign up?
Justin Chan: Yeah, so it's really any Visa card. We're nottrying to issue a new card, we're trying to make it as accessible for everyuser as possible. So if you had five Visa cards in your wallet, you could tiethem all up, and you would earn basically crypto on everytransaction that you do on any of those five cards. It's completely global. SoI took my ZA bank Visa card, and spent it here in Singapore, and I couldactually start earning here as well. You can earn it in Australia and NewZealand so long as it's a location that accepts Visa.
Walter Jennings: How do the awards or rewards accumulate and how do you then access them?
Justin Chan: Sure. So on the app, actually, what we give out is something called Bloom coins. You can imagine it almost like anAsia mile, right? Like an air mile, or yuu point. And on every transaction, we actually give you a Bloom coin or multiple Bloom coins. With that, you can take the Bloom coin, and then convert it into Bitcoin or Ethereum. And all of that is done on the app. We also actually display the amounts of Bitcoin or Ethereum you have within the app. And if you want, you can actually withdraw that into a crypto exchange account, you can put it into cold chain wallet as well, so you can actually withdraw it as well.And we help everyone be able to do that, because most of our users are interested in crypto but maybe never engaged with the stock exchange or a crypto exchange. And so for them, this is a gateway into getting involved in crypto through a way that they're used to, which is just taking a Visa card and spending with it.
Walter Jennings: Yeah, no, certainly. But you'd have to have the knowledge to sign up for Bloom beforehand. And tell me how are you getting the word out?
Justin Chan: Yeah, so we work directly with Visa. So Visa is very keen on saying if you have a Visa card link on to Bloom, you get extra rewards on that Visa card. We work with banks. So we work with Citibank, we work with ZA bank. And those banks also help us push, right because they're saying, now my cards, my Citi Visa card has additional rewards as well, that you should sign up for because it's free for a user. We also work with over 80 merchants as well. So people like Apple, as well as Sephora and these kinds of brands, where, when you spend at these brands, you get even additional types of rewards, right? So all of those are a culmination of like how we actually do marketing, and you might have heard about us at different points of sales as well.
Walter Jennings: Yeah, no, I certainly know that there are many promotions that reward you for using one type of card over another. Now, let me ask you, if I have, say an airline loyalty Visa card, am I going to lose out on the airline points by taking the Bloom coin?
Justin Chan: No, not at all. So we're not trying to touch any of the existing rewards that you have. This is all additional. So you would get the cash rebate you might get from a bank card, you would get the air miles and you would get Bloom coins. So it's all additional.
Walter Jennings: So, Justin, going back to that kind of aha moment. How did Bloom come into creation?
Justin Chan: So Bloom came out of creation from this need for more rewards programmes in Hong Kong. So back then, if you remember, there were almost eight virtual banks that were launched at the same time. And there was a little bit of a price war, right, everyone was doing promotions just to get new users. And we thought this was actually a really good opportunity to why not actually have a rewards platform where we can help different banks use rewards as a tool to engage and actually get customers. And so that's how Bloom was actually started. It was alongside these virtual banks.
Walter Jennings: Being within one of those virtual banks, do you find any of the legacy banks feeling a little bit of reluctance to partner?
Justin Chan: I think at the start, there definitely was a little bit of reluctance. But obviously, once we opened out as a whole platform to other banks as well, that's why Citibank came in as a first partner to say, you know, I'm not going to miss out on this opportunity. I want to get in early and start rewarding my customers to Bloom as well. And then that has really opened doors to other banks as well.
Walter Jennings: Well, I know the listeners, Waves in the Finoverse will rush to link their Visa card to Bloom. How do they do that?
Justin Chan: So you can just download the Bloom app on the Apple App Store. At the moment, it's only available to Hong Kong, issued cards were opening to Singapore, Australia and New Zealand, but you'll be able to look up Bloom rewards on the App Store, you download it, and then we just call it link spend, earn, where you link a card, you spend with the card like you normally would, and then you earn different types of rewards.
Walter Jennings: Okay, and the expansion into new markets? What are some of the regulatory hurdles you're facing in your growth? Because every time you enter a new country, you're in a new framework? Right?
Justin Chan: I think that's something that we're navigating along with everyone else in the Web3 space. So we've been keeping in touch with all the different changes. I mean, you were in Hong Kong FinTech week, where we saw a really good sign in terms of opening up to retailers as well. So we're keeping in touch with that. I think something where we're a little bit different from a lot of the traditional exchanges, where we're rewards platform, we're in a little bit of a sweet spot where we're actually just rewarding these as, you know, additional rewards where no one can actually put in like a deposit. So there's no actual economic risk to the user because they're not actually taking real cash, depositing it and then exchanging it for crypto, this is all free for them. And so from that perspective, we're in a little bit different space in terms of regulations.
Walter Jennings: Okay. Understood. If, however, you're a startup and I'm Visa card holder, how do you overcome any security concerns people might have because at least they are revealing their visa card number, their name and their spending pattern.
Justin Chan: Right. So all of that is directly because we've integrated with Visa. So, you know, in terms of the security side of things, we hold a very high standard with them. And so going back to the question of it must be really hard to get these on board. Those are their major concerns and we've worked tirelessly with them to make sure that that's not a concern.
Walter Jennings: Okay, now, Justin, all of the crypto bros and the folks that are passionate for crypto are signing up. How much interest are you getting from the traditional sector folks who may not own crypto?
Justin Chan: Exactly. So actually, surprisingly, our main customer base is quite new to crypto. So you know, the crypto bros who made a lot of money, maybe in the past three to five years, that's fantastic for them, we have an outlet for them to earn a little bit more in terms of their everyday spending. But to be honest, our addressable market that we're targeting are really people who found crypto to be intimidating, to find it who you know, who those don't know what to do with their hotkeys, or it doesn't know what blockchain is, or doesn't know how to actually send and link wallets to wallets. And so for us, it's more can we be that gateway to introduce a little bit of crypto to them in a form that they're used to, which is just you're gonna spend with your Visa card anywhere you go, why not earn a little bit of crypto that's free to you.
And once you get used to that, we then also partner with exchanges to them allow them to then go into their next journey with crypto, was actually trading with crypto as well. So we're actually targeting not people who are already in crypto, but the next billion who's actually going to get into crypto. And so we're actually calling ourselves a web 2.5 startup, because we help people move from Web2 to Web3. We help banks do it with our partnerships, we help merchants do it. And then we also help our users as well.
Walter Jennings: Well, I think you mentioned appropriately that you're a real gateway. So if you have a Visa card, which many people do, this is a way to on top of your loyalty earn additional benefits, including coin and crypto.
Justin Chan: Precisely. And to your point, you know, in terms of buying another item with your points, you know, why not actually buy crypto and that's the mindset that we're saying you're usually a lot more generous with your points with getting, you know, something that you don't actually need, but we're actually trying to give you something which is actually has value in terms of, you know, Ethereum and Bitcoin and so on.
Walter Jennings: Okay, now, Justin, I want to ask another tough question. I've banked up all of these coins in Bloom, how are you keeping them safe? Custody, especially institutional grade custody is a significant issue in digital assets, meaning the safe holding of them?
Justin Chan: Right. So this is a very good question. And so we obviously didn't have expertise in this field. So we work directly with a top five exchange globally to be able to do that. So on the back end, we actually linked directly with an exchange.
Walter Jennings: And then if I am withdrawing the crypto I have earned using my Visa Card tied to Bloom, do I go back through that partner exchange in order to transfer?
Justin Chan: So you actually need to open an account at the partner exchange.
Walter Jennings: You do? Or do not?
Justin Chan: You do not. Exactly. So within the app itself, you can actually directly withdraw, you give us a wallet address, you type in your wallet address, and then you can pass it on to your finance account or your ledger or whatever you would like. Yeah, so that part, again, we're trying to recognise that these users are new to Bitcoin and new to crypto. So how do we make that as easy as possible? And that's to do it in an app form that's friendly to use, easy, even though the backend might be a little bit complicated.
Walter Jennings: Tell us a bit about your background and how you came to create Bloom.
Justin Chan: Sure. So my own background is much less interesting than Web3. I actually came from a TradFi background. So I used to cover public equities at a fund. So I used to do US equities out in New York. And then I did some in APAC, as well. And on the side, you know, when you get to your late 20s, you start to think existential questions, right? Like, what's your next move? Are you going to go to a hedge fund? Are you going to go into PE and be in finance for the rest of your time or, you know, maybe this is the time to take a little bit of risk and just see what else you're made of. And so I got through that stage and I started actually thinking about well, you know, should I actually see if I can do some operations or some business. And so I actually started consulting on the side with different startups, and to test my own ideas. And a lot of those ideas actually came to fruition in the form of products or, you know, different types of startup strategies. And so I understood that I started to have a knack for this.
And so that's how I got into the startup world, really through the ZA group, which I mentioned was our backing. And so I come into the company with expertise and finance, and in strategy and business models, and that sort of thing. My co-founder, he's actually more of a serial entrepreneur, he's never worked, you know, for a traditional company like me, you know, he founded a first company that actually collected physical coins, that then get digitised into gift cards, but also into like an octopus or something like that. That was very successful. But he then moved on to actually build the Mox virtual bank here in Hong Kong. So he was the first 30 employees in Mox and so he built the virtual bank there as well. And then together, we actually came together and decided to do this Bloom thing. And you know, it was quite serendipitous, where we came from very different backgrounds. So there really is almost no overlap and expertise. So I'm always learning from him. And I hope it's likewise from his part.
Walter Jennings: You're touching on an area with this app that is of great interest to me in marketing and communications, which is the concept of engagement and loyalty on the blockchain. I could certainly see Bloom extending itself into other loyalty reward programs. What areas are of great interest going for growth for Bloom?
Justin Chan: Yes, I think for growth, it's one thing in terms of being able to design different types of rewards to be able to help users get more interested in the platform. I think how we think about it is really partnering with a lot of the merchant brands that see a need for this right, to see that crypto as a reward as something that can help their business. I think that's still the crux, and can we do something within the Web3 space that would actually be helpful for them. So what I mean by that is, for example, let's say, Walter, you're a huge fan of Pacific Coffee, let's say, it may not be true.
Walter Jennings: Those are the loyalty points that are expiring. I just got that email from Pacific Coffee. You know me too well.
Justin Chan: Right. So you would probably be a bad example for this, because you're already a member for them. But for example, let's say I'm not a member for them, but I actually like Pacific coffee, and I go there 10 times over the past month, right? For Pacific coffee, they actually have no idea who I am, like the store, the store lady, or the man might know who I am, and says Hi, Justin every morning. But in reality, the company has no way of reaching me, and has no way of actually engaging with me and retaining me as a very loyal customer. Right, but because we're on Visas rails, and because we actually reward you for every transaction that you do, actually, as Bloom, I can tell that Justin's a great customer, because he's done 10 transactions up as a coffee.
Now I can work with Pacific coffee, and actually issue let's say, an NFT that actually gives this user additional rewards. Maybe it's one free coffee every ten coffees, maybe it's a seasonal coffee, that's chai latte, or pumpkin spice because it's Thanksgiving, you know. If it's a luxury store, maybe it's actually a, an event, you actually get a free, you know, event ticket to this new store opening. And there are a lot of things you can do there in a form of NFT. Now, the question is, why does it have to be an NFT, right? And why it is, is because as you mentioned, you have a lot of loyalty points that's unspent, but there's actually residual value there that can be kept. And so for me as a user, if I've now moved on to a different brand of coffee, let's say a Japanese brand, and I've now given up my Pacific Coffee loyalty points, it doesn't mean that I can't actually give that to someone else. So maybe I could actually sell this NFT to someone else. And they can have great value from using this Pacific Coffee-Bloom collaborated NFT. So there are a lot of things we can do from the traditional world that can be empowered by NFT's and empowered by the blockchain network as well.
Walter Jennings: No, and it's certainly a new way of engaging with your favourite brands and brand profiting from it.
Justin Chan: Absolutely.
Walter Jennings: And I've got to ask you, you've got quite a recognisable logo with an owl repeating the double o's of the Bloom. That is your spirit animal. Tell me a bit about how the owl came into Bloom.
Justin Chan: That's actually a good question. I think there were a lot of different iterations We always wanted some sort of animal. We tried a monkey, that was a bit strange. We tried, I think we tried an elephant that was a bit strange. And ultimately, we want it to be like a smarter way to do loyalty and a smarter way to do things. And an owl is obviously related to, you know, being quite wise in traditional cartoons. I would like to say that that was a very conscious thought. But ultimately, we just thought it was a cute little mascot. And in some ways, if you meet my co-founder, it kind of looks like him.
Walter Jennings: Oh, there you go. Well, I was going I thought it was because of Athena, the goddess of wisdom is always accompanied by an owl.
Justin Chan: I might steal that one.
Walter Jennings: Okay, now, Justin, we have a feature here on our show where we ask people if they were to take music with them into the Finoverse, is there a track that really typifies your experience in web 2.5 and above.
Justin Chan: In 2.5 and above? I mean, I've always liked playing We Are The Champions from Queens. I mean, it's just it's a great song. It's exciting. It gets everyone up there. Yeah, and it's a great way to rile everyone up.
Walter Jennings: I think it's the national anthem for the country called Startup.
Well, Justin Chan, wishing you all the best with Bloom. Thank you so much for joining us here on Waves in the Finoverse.
Justin Chan: Thank you so much for having me, Walter. Pleasure to be here.