For programmes: settlement and collateral

How programmes convert points today

Conversion between programmes already exists, through agreements between programmes and through specialist hubs. In June 2025, for example, Plusgrade and ALL Accor announced that ALL Accor members could convert points from other participating programmes, naming Bilt, Capital One and Citi, into ALL Accor Reward points.^⁠[1] The companies named here are examples of how conversion works today; none is connected with this concept.

The 2002 loyalty filing describes the limit it set out to remove: services “limited to exchanging points between only two loyalty programs at a time”.^⁠[2]

Settlement through one clearing-house

Each conversion is recorded at the clearing-house when it happens. At the end of each settlement period the clearing-house adds up what every programme owes every other, nets the amounts, and each programme settles one figure.

Amounts between programmes are counted in settlement points, the loyalty filing’s common measure for valuing one programme’s points against another’s.^⁠[2] Settlement points exist only between programmes. Members never hold them and never see them.

Example: one settlement period between three programmes (illustrative figures, in settlement points)
Owed by	Owed to	Amount
Programme A	Programme B	1,000
Programme B	Programme A	400
Programme B	Programme C	600
Programme C	Programme A	300
Four amounts, gross		2,300

The same period, netted at the clearing-house
Programme	Owes	Is owed	Net
Programme A	1,000	700	settles 300
Programme B	1,000	1,000	nothing to settle
Programme C	300	600	receives 300

Four amounts totalling 2,300 settle as a single amount of 300, from Programme A to Programme C through the clearing-house. Programme B settles nothing. The figures are illustrative.

Collateral and guarantees

Each programme posts collateral with the custodian before it is admitted: assets, or a guarantee from an insurer or a bank, sized to the risk that it fails to settle. The risk-margin database rates that risk from the programme’s financial strength and record, as the 2002 filing does for its own guarantees,^⁠[3]^⁠[4] and sets the collateral each programme must hold.

The filing lists the kinds of protection: “an insurance guarantee or surety bond”, and from a financial institution “a repurchase agreement, liquidity bond or conditional financial instrument such as a conditional letter of credit”.^⁠[3]

If a programme failed to settle, its collateral would meet what it owed, so the other programmes, and their members, would not be left short. The collateral secures the programmes’ duties to each other only. Members hold no claim on it.

Admission and rates

A programme is admitted by the originator under the rulebook. Rates between programmes are agreed by the programmes and published by the clearing-house before they apply, as in the loyalty filing, where ratios are “set by the Participants and by agreement of the Authorized Issuer and the Points Bank”.^⁠[2]

A programme keeps its own members, rewards and terms. Taking part changes only how its points convert and settle.

What the model would ask of a programme

Publish its rewards terms, and the rates it agrees with other programmes, before they apply.
Post collateral, and keep it at the level the risk-margin database sets.
Settle on the published timetable.
Give the auditors access to its part of the ledger.
Follow the change notice and the no-devaluation rule.
Keep members’ personal data off the ledger, with the programme itself.

Status

No programme takes part. This is a concept, and no programme is named here as a partner.

For programmes