Empowering Small Merchants with Digital Innovation

In a groundbreaking move, Bank of Baroda has introduced a pilot program that leverages programmable central bank digital currency (CBDC) to offer loyalty and cashback schemes for small and medium-sized merchants. This initiative, developed under the guidance of the Reserve Bank of India (RBI), marks a significant leap forward in digital payment solutions, enabling local businesses to craft personalized loyalty programs akin to those of large brands.

Customizable Cashback Offers

Merchants associated with Bank of Baroda and registered on its app can now design and implement cashback offers without the need for additional infrastructure. This flexibility allows local retailers, grocery stores, and pharmacies to set parameters such as campaign duration, cashback percentage, and expiry dates, tailoring offers to meet their specific business needs and customer preferences.

Programmable CBDC: A Game-Changer

The use of programmable CBDC is at the heart of this initiative, offering merchants the ability to issue digital currency with specific conditions. This includes restricting usage to their stores, applying it to select products, or setting expiry dates. Such programmability not only enhances the customer experience by offering personalized rewards but also encourages repeat transactions, fostering greater customer engagement and retention.

Driving Digital Payment Adoption

Sanjay Mudaliar, executive director of Bank of Baroda, highlighted the program's potential to increase CBDC adoption by making digital payments more rewarding for both merchants and customers. This initiative is poised to level the playing field for small businesses, enabling them to compete more effectively by driving customer retention and repeat business through innovative digital solutions.