System iNetwork

In a two-part deal, Creditz signed a five-year, $600,000 managed services contract in June to have its digital currency system hosted at IBM's Toronto Global Services Data Centre. Previously, in late 2006, IBM says Creditz signed a $500,000 agreement with IBM to purchase System i servers, DB2 database software, and WebSphere middleware for the project.

The total, of course, is $1.1 million.

Creditz?

The Creditz service is essentially a consumer rewards card, which may or may not become the next-generation of rewards. Here's how it works: any participating merchant can create custom micro-payment rewards or points, which all go the Creditz account holder. With typical reward-based credit cards, you have to make your purchases with the credit card in order to get the "points," which you can then redeem through a multi-step process that is usually irritating and sometimes painful.

Creditz seems to be similar but entirely different. It doesn't matter what method of payment you choose, you can still gain "Creditz." For example, let's say you buy a bag of water balloons at a participating store. You pay with cash but also swipe your Creditz card. The store gives you some incentive Creditz for your purchase. The Creditz accrue in your account until you decide to spend them at any participating merchant.

The stores can create special Creditz programs to stimulate sales — for example, a store could give you triple Creditz whenever you purchase both water balloons and squirt guns on hot sunny days in June.

Sounds Complicated

Because the Creditz can be used at any participating merchant, and because the merchants can create their own Creditz programs, the whole thing sounds a bit complicated and seems like it might be ripe with the potential for error. Creditz is a lot like cash that ends up in a customer's account, and customers tend to like uninterruptible access to their cash.

Now You Know Why the System i Is Involved

OK, I don't know this for a fact, but it stands to reason that the System i was chosen because of its legendary security and reliability. (Sure, there could be dozens of other reasons, but I like this one best, so we'll go with our assumptions here . . . but IBM does allude to this — more in a second.)

Creditz — the organization, I mean, not the payment unit — will use IBM's services to run the system, which it will then offer access to merchants so that merchants can implement loyalty systems without heavy startup costs.

Providing consumers and retailers with a universal currency that has the privacy of cash, and the convenience and scalability of credit and debit cards, IBM says, requires a secure and robust infrastructure for Creditz to house its data. IBM is building a data center for Creditz that will support these initiatives in multiple geographies.

"Creditz wants to expand throughout Canada, USA, UK and Russia, and into emerging markets," says Don Blue, IBM Global Services Server, Storage and Services executive. "IBM's flexible capacity and secure systems will allow them to grow as they go global."

The Guts

IBM doesn't mention this in its press release, but the System i used by Creditz is a model 9406 i550+ with four processors turned on, running V5R4 and Linux.

So, if you're a Creditz user — or ever consider it — all your Creditz will be running through a System i.