Purchasing power parity (PPP) is an economic practice that compares the purchasing power of various world currencies to one another to determine an exchange rate that allows you to buy approximately the same amount of goods and services in every country. 🌎
The PPP coefficient (or rewards cost multiplier) rate in Bonusly factors in data directly from the World Bank and Open Exchange Rates API to adjust points in Bonusly to be as close as possible to the same value for redemption no matter the user’s location. 🎉
Bonusly uses basket price and exchange rates to calculate coefficient data for each county twice a year. The basket price is pulled from The World Bank's PPP conversion factor, and includes the cost of living. Country exchange rates are updated in real-time and are sourced from OpenExchangeRates.org
Updates to PPP and changes to exchange rates can impact the amount of Bonusly points needed to redeem Rewards (including custom rewards) in that country. Here's how changes in PPP impact redemption:
If PPP has increased (the coefficient is higher), then users can expect to need more points to redeem Rewards and the opposite is true.
If PPP has decreased (the coefficient is lower), then users will need fewer points to redeem.
If you've noticed a change in the number of points needed to redeem for rewards, that's because the PPP coefficient for your country has been updated to ensure that the buying power of points, or the time needed to save up for rewards of equal value, is roughly equivalent for all users at your company (regardless of geographic location).
Our goal is to make redeeming Rewards in Bonusly as fair as possible for all users. This is why we default to using data from the World Bank and perform bi-annual audits to ensure we're staying up to date. When it comes to paying for Rewards, companies still only pay in base currency, which is set up in your Bonusly account.
Still have questions? Send us a note and we'd be happy to chat! 🤗