B Infinite's Payment and Partnership Strategy: To Expand or Diversify?

The assignment case study presents B Infinite, a loyalty program operator that has developed a unique business model with MasterCard. To unlock its growth potential, B Infinite needs to consider alternative business models, such as venturing into the credit card issuer/acquirer space or leveraging new technology developments like blockchain to create their own financial wallet. The company also needs to explore new partnerships and commercialize data collected by the loyalty program. Internationally, B Infinite should expand across Asia, understanding customer preferences in each market and potentially collaborating with other Berjaya Corporation companies. The leadership of B Infinite expects participants to propose specific recommendations for how the company should proceed going forward.

Living Case
“B Infinite”

I. Introduction
Berjaya Corporation Berhad (http://www.berjaya.com/) is one of the largest conglomerates in Malaysia.
The company has over 30,000 employees globally and generates over RM32 billion (AUS 9.6 billion) in
global revenue. The company is listed on the Main Market of Bursa Malaysia Securities Berhad (ticker:
BJCORP – 3395). Berjaya has a very diverse range of businesses across many different industries,
including: consumer marketing, property development & investment, resorts, gaming & lottery
management, food and beverage, financial services, motor and education. The primary focus of this
living case is to develop a strategy and execution plan for BLoyalty Sdn Bhd, a wholly-owned subsidiary
of Berjaya Corporation Berhad that runs and manages the B Infinite customer loyalty program
(https://www.binfinite.com.my/). The goal of the project is to provide proposals on how B Infinite can
address the following strategic initiatives:
 Enhancing the commercial returns of the division
 Support product and service expansion
 Support international expansion
II. B Infinite
B Infinite is an omni-channel multi-partner customer reward platform. Similar to other types of reward
programs, the idea behind B Infinite is to reward customer repeat purchases and to encourage loyalty by
providing various benefits and rewards which accrue to the customer.1 The current primary revenue
source for B Infinite is payments from merchants that sign up to participate in the program. A secondary
source of revenue for B Infinite is service fees from merchants and non-merchants (e.g. research survey
panels, insurance companies, data aggregators/brokers) that pay B Infinite in exchange for the ability to
leverage and exploit the data treasure throve of B Infinite’s customer base. Aside from a few exceptions
that are merchant-benefits driven (some merchants offer additional benefits above and beyond B
Infinite in exchange for a joining fee), B Infinite in principle does not charge individual customers any
joining/ subscription fees to be a member of the platform. B Infinite aims to provide merchants with
seamless loyalty marketing support and consultancy services by continuous improvement of technology,
analytic services and other loyalty related support. Initially B Infinite was launched as a physical card as
loyalty mobile apps were still in their infancy and physical cards utilized the same widely accepted card
terminal/ point of sale equipment’s that merchants were familiar with. At this time the program was
called BCARD. However, in 2016 the program switched its focus from a physical card to a mobile app
and the name was changed to B Infinite to reflect its journey away from physical cards.
B Infinite was founded in 2010 and currently has 30 employees, largely based in Kuala Lumpur. B Infinite
currently operates in Malaysia with plans to expand across the ASEAN region. In particular, there is a
plan to launch the product in the Philippines and Singapore. In Malaysia, the company has nearly 6
million member accounts and has partnerships with over 80 merchants across 10 industries with over
4000 locations. Many of the merchants are other companies within the Berjaya Corporation Group.
1 Alvarez, J.B. & Sessia A. (2011). Customer Loyalty Schemes in the Retail Sector, Harvard Business Publishing (9-
511-077).

Thus, B Infinite has the potential to create synergy across the group by increasing the revenue of other
companies in Berjaya.
Traditionally reward programs have been thought to provide several different benefits to firms.2 First,
loyalty programs can help merchants gain a greater share of their clients purchases by motivating them
to consolidate purchases within a set of merchants to maximize reward point accrual. Thus, loyalty
programs can help merchants differentiate themselves from competitors and help reduce
commoditization of their products. In the case of B Infinite, customers would ideally be motivated to
concentrate their purchases across the group of 80 plus member merchants. Second, loyalty programs
can prompt customers to make additional purchases by providing promotions. In addition, loyalty
programs can help customers communicate their needs to companies which can allow for a co-design of
product and service offerings. Thirdly, by virtue of the data which can potentially be collected, loyalty
programs can yield novel insights into customer buying behaviour. With the use of data analytics this
data can be used by merchants to guide important decisions such as where to put physical retail
locations, how to design their distribution networks, what assortment of offerings should be provided,
how to optimize promotions, and what should be the price strategy.
Traditionally to generate revenue from these benefits loyalty programs sell merchants points in the
program which are then distributed to customers when they purchase products. In this business model
it is critical for the program to accurately price the value of points to merchants (i.e. how much
participation can increase a merchant’s sales). It is also important that the loyalty program figure out
how to best grow its membership base, as this will make the program more valuable to merchants. Of
particular importance is growing a membership whose demographics are attractive to key merchants.
The continual expansion of merchants that complement contemporary lifestyle choices is also important
because it provides customers with more attractive options for accruing and spending loyalty points.
Going forward it is important that B Infinite continually revisit these issues to insure that the program
appropriately adapts to market changes and customers lifestyles.
In addition to these traditional concerns, recently B Infinite faces some new opportunities and
challenges. First, the movement of the program from being card-based to app-based opens up the
potential for new analytics offerings. Customer use of the new B Infinite mobile app has the potential to
provide new types of customer data in a timely and potentially cheap manner. However, to realize the
commercial benefits of this data B Infinite must develop an understanding of what type of data would
be useful to merchants and develop capabilities to offer analytics solutions that convert the data into
valuable market insights. The company may also need to re-think whom might be the customers for this
data. It is possible that third parties other than merchants and traditional research companies might find
the data valuable.3 B Infinite needs to better understand the commercial viability of these potential 3-
way partnerships.
Second, recent technology advances have opened up the possibility for loyalty programs to move into
the financial service sector and becoming payment mechanisms for customers. For example, B Infinite
recently signed a deal with MasterCard that will allow B Infinite members to link any credit card to the B
Infinite app via the ‘Masterpass’ digital wallet which simplifies and improves the making of a purchase
for physical or digital goods in-app with as little friction as possible. In this situation a customer’s B
2 Nunes, J.C. & Dreze, X. (2006). Your Loyalty Program is Betraying You. Havard Business Review, April, 124-131.
3 https://www.traveldatadaily.com/commercialising-frequent-flyer-program-member-data/

Infinite account would be tied to a MasterPass account creating an electronic wallet that can facilitate
online payments. MasterCard would pay B Infinite for this partnership as a way to expand the use of
MasterCard across the merchants in the B Infinite network.
However, B Infinite may have even more disruptive potential. Recent advances in block chain
technology (the technology behind the digital currency Bitcoin) have the potential for loyalty programs
like B Infinite to remove traditional middlemen (like banks) from financial transactions and begin acting
like financial institutions.4 For example, this type of technology has allowed Alibaba, the Chinese E-
commerce company to launch Alipay as a means for people to pay for a variety of services, such as
airline tickets.5 Potentially B Infinite loyalty points could be treated like currency and directly exchanged
for services across a wide range of providers. This type of offering would represent a new revenue
source by allowing B Infinite to sell it services to a totally new set of clients. However, this would also
require B Infinite to manage a range of new issues, such as regulations, acquiring and managing a new
type of merchant customer base and the development of a new business model to realize potential
commercial benefits. Block chain could also pose as a disruptive threat to B Infinite as it opens up the
possibility of merchants creating and trading their own block chain reward points network without the
need for an intermediary like B Infinite to regulate it as a central clearing house.
Berjaya Corporation Berhad’s goal for companies like B Infinite is to create new sources of sustainable
and scalable revenue by pushing the envelope of innovation in technology and business models. The
company was set up as a separate entity with separate financials and is expected to contribute to the
overall profits of the firm (as opposed to being subsidized by other businesses). Whie B Infinite has
many exciting opportunities, in order to meet the goals of the company Ms. Yau must address many
different questions.
A foundational issue is how can B Infinite optimize the commercialization of B Infinite’s over 6 million
members and over 80 merchant partnerships. Should B Infinite brand itself as a rewards program or a
loyalty platform? What would be the difference be between the different approaches? What does
loyalty and rewards mean to today’s digital customers and how should benefits be delivered in a mobile
space to achieve sustainable profitability? Where is the company likely to have the greatest impact both
from a brand and financial perspective?
A second issue is how the company should approach the area of payment. Should the company seek to
expand partnerships such as the one they have developed with MasterCard? What is the best
arrangement for these types of partnerships? Should B Infinite seek to venture into the credit card
issuer/ acquirer space which is a tightly regulated environment under the ambit of the Central Bank?
Alternatively, instead of having partners should B Infinite attempt to leverage new technology
developments (e.g., block chain technology) and develop their own financial wallet and become a
financial service provider? If so, how should this be done and what is the best commercial model for this
type of business?
A third issue is in the area of analytics. What new types of partnerships should B Infinite form to
leverage the data collected by the loyalty program? How can this data be commercialized, what services
4 http://www.scmp.com/lifestyle/article/1937762/how-blockchain-tech-behind-bitcoin-could-usher-cashless-
revolution
5 https://bitcoinmagazine.com/articles/chinese-e-commerce-giant-alibaba-explores-blockchain-based-cloud-
service-platform-1454360796

should be provided by the firm? What capabilities should B Infinite develop in-house versus outsourced
if data is B Infinite’s secret sauce?
A fourth issue concerns the area of international expansion. There is a belief that the company has the
potential to expand across Asia potentially by leveraging the activities of other Berjaya Corporation
companies. However, moving into new markets would require B Infinite to understand the customer
preferences in these markets around loyalty programs. Are there cultural or behavioural differences that
might influence whether loyalty or reward programs would be more or less successful in certain Asian
markets? It took 6 years for B Infinite to reach its current level of members and merchants. How could
this be done faster in other Asian countries? International expansion might also open up different types
of business opportunities. It is possible that every expansion effort into a new country will take a
different approach and may not adhere to the coalition platform model operating in Malaysia. For
example, the company has had preliminary conversations with a water utilities player in the Philippines.
The utility wants to be seen as “more than supplying water” and has been recently investing in concert
sponsorship and other community programs. The utility needs some way of engaging with their
customers and they think a loyalty program is one way but don’t know where to start or how to
articulate the business returns of such a program. Is this something in which B infinite can and should
be involved? What should B Infinite’s response be if the water utilities player wishes to run it as a non-
coalition system under its own brand and customer behavioural rewards are the focus, not points
issuance? In other more mature markets like Singapore, what would be the best go-to-market strategy
for B Infinite in view of the fact that Berjaya has no significant retail presence in Singapore and would
essentially be starting from scratch. Should it pursue the traditional coalition loyalty model by
negotiating with and acquiring key anchor merchants (e.g. supermarkets, petrol stations, F&B chains)
that would drive member signups? Should it pursue the white label/ consulting route (e.g. AIMIA -a
major competor’s- LoyaltyOne model) whereby B Infinite positions itself as a loyalty services company
that can enable other corporations wishing to enhance their customer engagement strategy via the
creation of a customized loyalty program that might be operationally outsourced to B Infinite?
How B Infinite address these various issues has the potentially to dramatically change both the
operations and the financial position of the firm. However, the direction forward is far from clear.
III. Objectives of Living Case
The above material suggests that B Infinite has great growth potential, however, there is a need for new
steps in order for the company to realize this potential. As such, the goal of this project is to examine
the following issues:
 What business model(s) should B Infinite adopt to best realize the commercial potential of its
business technology, data, and consumer & merchant relationships?
 What new products and services should B Infinite adopt and how can it implement these new
offerings?
 How should B Infinite expand internationally in terms of locations, offerings, and customer
focus?
The leadership of B Infinite expect the participants to examine one or more of these issues and propose
specific recommendations for how the company should proceed going forward. This might include, but
not be limited to, recommendations on the commercial model, what types of products and services the
firm should adopt, how they should charge for these services, on which types of clients they should
focus, where in Asia the company should expand and how they should manage this expansion,

and how B Infinite should best leverage relationships with other Berjaya Corporation companies.
However, it is recommended that each candidate focus on a very specific area. The depth of the
recommendations provided is more important than the breadth of recommendations.