Bakkt: a web3 platform helping banks provide crypto services

Bakkt is a web 3.0 infrastructure designed with a large number of solutions to help banks deliver crypto services. The network builds on helping financial institutions and companies unlock the power of cryptocurrency in payments, loyalty rewards, etc.

What is Bakkt?

Banking institutions like Morgan Stanley, Goldman Sachs, Standard Chartered, Citigroup, BNY Mellon, and many more have been investing in the crypto landscape. However, while financial institutions are investing in crypto, the number of banks offering buy-and-sell services for virtual assets is next to none.

Why? Because of the onboarding and functional complexities involved with buying and selling crypto. It’s such problems that led to the birth of Bakkt. Along with the offerings, Bakkt serves customers with custody solutions, KYC & AML compliance, payment services, clearing & settlement, and merchant solutions. Therefore, Bakkt develops an ecosystem with crypto solutions, enabling companies to offer customers the best experience. 

Bakkt was founded in 2018 to ease buying and selling cryptocurrencies. Since then, it has evolved into an ecosystem for digital asset service providers. All through its life, Bakkt has been making partnerships that enhance the ease of service delivery. 

Bakkt enables banks to add crypto services such as buy, hold and sell. As such, bank users can use crypto-related services without opening an account and leveraging any third-party platforms. Banks and other financial institutions can now appeal to the younger millennial generation, which mostly prefers money on the internet.

How does Bakkt platform work?

In its mission to accelerate crypto adoption in banks, Bakkt leverages technology to connect customers and banks/merchants/companies. This technology enables different companies to unlock the power of virtual assets.

Bakkt designed a process that reduced the functional problems associated with crypto. For instance, this entire Bakkt system takes all the burden of operational tasks like onboarding, KYC, compliance, reporting, and many other services on behalf of banks. As such, once a bank links with Bakkt, it can offer crypto buy, sell and hold services without worrying too much about the operational aspects.

Together with solving the functional problems for institutions, Bakkt also offers an exchange platform. It’s through this exchange that the purchases and sales of cryptocurrencies occur. 

What are the features of Bakkt? 

At the nucleus of Bakkt are several features that interact for optimal service delivery. The features include a mobile application, a Visa debit card, a digital wallet, and other technologies.  

The Bakkt mobile application

Bakkt has a native mobile application that helps offer services. The App allows everyone to easily access the services provided in this network. In simpler terms, Bakkt is a digital wallet dealing with crypto assets and loyalty currencies. 

Using this App, you can keep your cryptocurrencies and loyalty currencies on the same platform. Your points, rewards, cash, and BTC can all be in the same place. Moreover, you can spend the assets whenever and wherever using the App.

The application is a platform for services like; 

• Trade cryptocurrency (crypto solutions) — Use the Bakkt application to buy, sell and store your crypto assets. Before adding any assets to its offering, Bakkt conducts massive checks with utmost care. 
• Use your different rewards (loyalty solutions) — the different forms of loyalty rewards garnered or offered via the Bakkt network can be used by the holder using the App. 
• Use alternative payment options (payment solutions) — The loyalty currencies and rewards earned can be used as payment assets for different services. This Bakkt App makes everything possible.

The Bakkt visa debit card

Another feature brought by Bakkt is the Visa Debit card system. The card system gives an alternative payment solution that allows customers to pay in different currencies. This Visa debit card is issued courtesy of SuttonBank. Customers can fund their Bakkt debit cards using the currencies held in the Bakkt wallet. 

Bakkt allows anyone to add the card to Google pay and Apple Pay. If added, it autonomously becomes easy to tap and pay in shopping stores. Customers can use this card anywhere where Visa cards are accepted. The card never requires a credit check. 

Moreover, the debit card issuer has a short verification procedure, which involves giving info like name, billing address, date of birth, social security number, and driver’s license photo.

The card system sells your crypto, not when the payment is authorized but on capture. As such, the network sells your crypto at the rate you targeted. The card does not charge any fees when you pay using crypto. 

Bakkt instills security protocols to protect the details of the cards. The security involves;

• The Bakkt system, including the App, has no custody over your card number. They don’t store your card number. This leaves you with personal control of your card.
• Remote wipe options offered by the Bakkt network help foster more security for investors. If you lose your devices, you can wipe off your Google Pay and Apple wallet from the devices.
• The network also simplifies the process of canceling a card and getting another one all within the App.

What solutions does Bakkt bring?

From inception, the Bakkt network intended to develop a large class of solutions for the financial space. The solutions impact not only the crypto space but also the general financial space. They are;

• Crypto solutions
• Loyalty solutions
• Payment solutions

Crypto solutions

The most important class of solutions brought by Bakkt are crypto-focused. The crypto world is over a decade old, but still, there are many problems surrounding this landscape and hindering adoption. Security and usability are the top features any money-focused platform must have.

Although merely a decade old, it’s becoming more evident every other day that the crypto landscape will have a significant role in our future. Many people constantly look to invest in the landscape as a way of diversifying portfolios and banking into the future.

Bakkt boasts the capability of unlocking the digital asset and offering solutions focused on the average web 3.0 customers. The crypto solutions afforded by Bakkt provide investors with a seamless way to access and use digital assets.

While fostering simplicity, Bakkt also guarantees security to its customers. Since security has been a significant hindrance to crypto adoption, bringing such solutions will encourage more and more people to invest in the landscape.

For the crypto side of the network, Bakkt has the following tools;

Bakkt crypto connect

This feature by itself helps drive the accelerated adoption of digital assets. It’s designed to help financial institutions connect their fiat customers to crypto-related activities such as buying, selling, and holding.

So, to put it simply, customers can hold, buy and sell their crypto assets through their trusted brands. The crypto connect solution increases the company’s engagement with existing customers and attracts more customers. You can leverage Bakkt’s API to access crypto markets with utmost ease.

Bakkt crypto rewards

Another crypto-related solution brought by Bakkt is rewarding. Bakkt crypto rewards tool allows your platform to reward your customers using crypto assets. Offering rewards has always been the best way of attracting new users and maintaining customer loyalty. With the tool, customers earn crypto incentives and can redeem them at any time.

Crypto payout

The tool based on Bakkt develops a system to pay people using cryptocurrencies in a near instant manner. The payout option gives more ways to award your customers. The general idea is to offer crypto-related payment solutions for your business.

Crypto custody

As part of crypto solutions, Bakkt introduced custody options. This network enables users to safely crypto in a dual cold and warm wallet system. While Bakkt offers security with hot and cold wallets, the assets remain the customers. Bakkt does not use your crypto for pledging, lending, staking, etc.

Bakkt loyalty solutions

Bakkt boasts the ability to offer businesses and individuals loyalty-related solutions. Loyalty solutions refer to the way companies reward their customers for their loyalty.

As the technological and financial space continues to advance, customers’ expectations of loyalty rewards have also been evolving. The times of rewarding customers with t-shirts are almost coming to an end. As such, loyalty-related rewards need to evolve to reach customers’ expectations.

The solutions brought by the Bakkt platform help companies issue their customers with modern loyalty rewards. So, what are some of these advanced loyalty reward options? They include;

Apple related rewards

Bakkt made it possible for consumers to redeem the loyalty currencies they earn for products of the Apple company. Products of the Apple company, including iPhones, smart watches, and even earphones, always attract massive attention from the public. However, due to their costly nature, it’s always impossible for everyone to own them.

Bakkt allows companies to issue loyalty coins, which customers can redeem to buy items like iPhones, smartwatches, and earphones. Imagine how your customers would feel if they could get an iPhone 14 as a reward. All possible via Bakkt.

Travel rewards

Customers can also redeem their loyalty currencies to enjoy unique travel experiences. They can redeem the currency rewards for travel with cash, points, or even split pay. This tool allows full support to make sure your customers reach their destinations.

Travel rewards are capable of giving emotive value to your customers, hence attracting even more customers. Interestingly, Bakkt is an IATA-accredited institution. The network has a wide range of travel-related solutions. They include;

• With Bakkt, customers can redeem their loyalty points for air tickets from over 124 global airlines.
• Bakkt’s solutions also offer over 500k hotel options and 1.3 million vacation rentals.
• Bakkt also claims to have interacted with 8 US-based car rental agencies and another ten internationally.
• 350k global activities

Merchandise rewards

Another rewarding option offered via Bakkt is merchandise. Bakkt delivers a flexible system with customizable storefronts and over a million items to select from. Customers can shop with loyalty currency and choose from over a million products. The merchandise rewards help in increasing loyalty and engaging customers.

Crypto rewards

The crypto rewards section on Bakkt allows companies and businesses to reward their customers with crypto. Customers can redeem loyalty points for crypto or even get the crypto asset as a direct reward. This means that your customers can expand their investments to crypto.

Gift Cards

This part of Bakkt allows institutions to offer their customers some gift cards that they can redeem or use for cash purchases and split pay. It’s an easy-to-integrate system, basically a simple plug-and-play.

Points pay

The points-pay feature allows the customer to pay merchants with loyalty currencies. The payment system offers a seamless experience for the users.

Payment solutions

The third solution afforded by Bakkt for the web 3.0 landscape is payment options. Bakkt introduced new, more innovative ways for people, merchants, and institutions to receive payments. A business leveraging Bakkt, therefore, can allow its customers to leverage the many payment options offered. The two payment solutions afforded at the moment are;

• Crypto payout — Bakkt’s crypto payout solutions allow businesses and individuals to enjoy faster and highly flexible payment methods while taking care of any necessary safeguarding and regulation.
• Bakkt pay — This tool allows you to enjoy more payment options with a seamless experience.

Bakkt KYC solution

While Bakkt mainly focuses on providing ease of web-3 access for companies, it’s also quite famous for being an AML and KYC service provider. The services it fosters are by themselves compliant with Know your customer protocols. 

When delivering its services, be it buying, selling, holding, or even rewarding, Bakkt has verification procedures for KYC and AML purposes. Depending on the region of residence, you will have to give different types of info and details.

For instance, New York residents must provide their DOB and SSN for each transaction type within the App. Among other details required for verification include a Verifiable email address, mobile number, Bakkt ID, password, name, residential address, DOB, SSN, occupation, etc.

Bakkt will always take all the KYC responsibility hence any company leveraging its services doesn’t have the burden. As such, platforms like banks leveraging Bakkt will have accelerated times when accessing the markets. Banks can offer their customers any crypto-related solutions faster since they need not deal with KYC or even onboarding. 

Final word

This guide looked deep into the Bakkt ecosystem and its many web 3.0-focused solutions. The standout feature of Bakkt is its focus on helping banks and institutions make crypto accessible to their customers. Solving problems such as onboarding, compliance, KYC, AML, and others is the simplest way to enable banks to offer crypto services.