This article first appeared in Digital Edge, The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

Pining for the latest in-game skins, accessories or limited-time character banners can be costly — yet it becomes a different story entirely if you are able to convert credit card loyalty points into in-game currency.

Gaming-related expenses can rack up over time, particularly when you factor in subscriptions like Xbox Game Pass or PlayStation Plus, as well as recurring costs for battle passes and cosmetic bundles.

For example, a Riot Points-to-USD conversion showed that the Signature Immortalised Legend Collection — a cosmetic bundle in the multiplayer online battle arena game League of Legends (LoL) — was priced at almost US$450 (RM2,026), reported e-sports media platform, ONE Esports. The collection was unveiled in celebration of e-sports player Faker’s induction as the first inductee into the Hall of Legends, a hall of fame for LoL e-sports.

While 93% of Malaysians are aware of video games, only 63% are commercially engaged. According to Deloitte’s 2022 report on video gaming and e-sports, the average Malaysian gamer spends RM116 monthly on video games. Meanwhile, Visa’s Consumer Payment Attitudes Study 2024 reveals that 91% of Malaysians prefer card payments — transactions that naturally accumulate loyalty points.

Rather than using cash for in-game credits, why not leverage these loyalty points before they expire?

That’s where the Mastercard Gamer Xchange (MGX) comes into play. Developed by Mastercard, MGX provides a platform for users to convert their accumulated loyalty points into in-game currency. This not only helps gamers save money but also ensures their hard-earned points do not go to waste.

“We didn’t start out by knowing what we were going to create. We didn’t know we would create a conversion engine that would burn loyalty points into gaming currency. What we knew was that we wanted to solve a pain point,” says Kaveri Khullar, vice-president of regional consumer marketing for Asia-Pacific at American multinational payment card services corporation, Mastercard.

MGX aims to address the gap of traditional loyalty programmes offerings, adjusting rewards that also benefit younger audiences. Through MGX, gamers can redeem loyalty points for in-game credits applicable to nearly 4,000 of the world’s most popular titles.

Unclaimed rewards or loyalty points indicate that customers have made enough purchases to earn those points, which contributes to the company’s revenue. That is a win for the company, right? Well, no.

“Loyalty points are a liability on the books of the chief financial officer,” says Khullar. A low redemption rate actually [comes across] as a yellow flag for the company, as it demonstrates a lack of engagement in customer loyalty.

MGX is offering a ready-to-use solution with a single application programming interface integration for businesses that are looking to integrate MGX into their applications or reward systems.

Instead of competing with game publishers, MGX aims to open up more revenue streams and distribution channels for games, says Khullar.

Back in November 2024, Mastercard collaborated with Ribena Malaysia to reward gamers when they purchased Ribena products. Each purchase allows for customers to earn points that can be redeemed for gaming credits on MGX.

“You can strike loyalty points on many things, even small-ticket items. Kids would be spending hundreds of bucks on Robux but now with MGX, parents can [offset future in-game purchases against the points rewarded from their recurring expenditure],” says Khullar.

Robux is Roblox’s in-game currency and can be used to purchase in-game upgrades or avatar accessories.

MGX allows users to redeem their points in small amounts. This means that gamers do not have to accumulate large quantities of points before they can redeem gaming credits.

The gaming ecosystem is a combination of multiple closed-loop ecosystems. Closed-loop ecosystems are controlled environments where all aspects of the gaming experience, from developers to retail marketplaces, are tightly controlled by a single entity.

The thing about such an ecosystem is that it can be restrictive and does not allow currencies or assets to be interchanged between one game and another.

Similarly, loyalty programmes in banks are traditionally closed loops where loyalty points can only be redeemed internally within the bank’s programme.

This presents a restriction to customers that may drive them away in the long term due to the increase of more compelling services and rewards offered by other entities.

MGX offers not only the flexibility to redeem points on any game credit that customers possess, but also breaks away from the traditional loyalty programme structure where rewards might become irrelevant over time with younger audiences.

Khullar hopes that banks can tap MGX to provide more offerings and engagement with gamers and Gen Z. This would not only encourage better engagement with traditional banks but also lead to a better credit score history when they seek to apply for a credit card.

“Gen Zers are so young, how will they have a credit history? Their credit card applications keep being rejected and they are constantly stuck in this loop of rejection,” says Khullar.

She adds that MGX could even open up avenues for banks to conduct credit risk assessments based on soft skills, strategy and crisis management, collaboration and teamwork, cognition and risk-taking management in games.

“I think banks today are taking the right level of risk, but there’s always a balance between risk and conservatism,” says Khullar.

She stresses that banks should touch base with the gaming community and create a genuine value for them to build a responsible generation.

Banks can collaborate with the platform to offer more exclusive rewards and character artwork credit cards to attract more customers within the gaming community.

“Gaming is not a subculture anymore and you’ve got to do community management. You’ve got to engage with them [gamers] and create a club where they can have access to experiences not only within gaming but the rest of the Mastercard ecosystem, from dining to film festivals,” says Khullar.

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