Loyalty and payments go hand-in-hand

Traditionally, loyalty and payments have been operating in the same space, but until now there hasn’t always been a seamless relationship between the two. Now, technology is the glue that binds them, with payment solutions offering loyalty functionality, giving merchants a chance to push loyalty and gather richer customer data.

Loyalty is being integrated seamlessly into multiple types of payment

Loyalty is built successfully when participation isn’t just convenient, but totally seamless. Linking loyalty to the existing payment process is one way to make this experience frictionless, and this is what has powered the recent boost in innovation. Brands such as Mastercard and Visa are giving merchants, as well as issuing banks, added flexibility when it comes to loyalty. Merchants, for example, can now offer customers an easy way to register their bank card on an app or website, then use it as the identifier for all in-store or online purchases. Loyalty points can then be tallied up and displayed on the customer’s account without any intervention. Customers are rewarded for every transaction with no effort.


Similar integrations are now being applied to digital wallets. As just one example, Carrefour customers can now add a loyalty card to their Apple Wallet, and enjoy contactless payment using their iPhone or Apple Watch while collecting points. Big retailers are forging a path right now due to the investment needed, but more SME-friendly solutions will emerge as mass market uptake is pushed by fast, simple, secure, and standardised payment-loyalty integration.

Gathering better data about customer habits, preferences, and behaviours

Seamless connection between loyalty and the payment process also helps merchants build a better understanding of individual customers and their consumer base as a whole. The magic of loyalty cards is that you can identify who bought what, when, and how. If repeat loyalty is made smoother and identification becomes easier, overall, customer data becomes higher quality.


And as Arlette Broex highlighted at CCV Exchange 2020, most people don’t use loyalty cards for their smallest purchases until now. Linking loyalty to payment gives merchants a much more accurate view of their customers, because every purchase is taken into consideration.


But what are merchants doing with this data? Mostly, they’re providing personalised discounts and incentives to each customer based on their buying habits. This increases loyalty by giving customers exactly what they want, when they want it. And by collecting data on a vast scale, they’re also able to forecast marketing campaigns better and improve their product portfolio.


Again, the collection and interpretation of this data, as well as the action that follows, is being done primarily by major retail brands at the moment. But SMEs are hot on their heels, and are already benefiting from city-wide loyalty schemes that promote independent local stores.

“Loyalty has always been important, but by inserting the mechanisms for increasing loyalty into the existing payment process, merchants can make it more effective to create returning customers.”

Joury Gokel
Director Business Solutions, CCV Lab

“Loyalty has always been important, but by inserting the mechanisms for increasing loyalty into the existing payment process, merchants can make it more effective to create returning customers. The aim is now to make loyalty scheme participation a “no-brainer” for the customer – just a pure advantage which has no downsides.


By reducing the friction and hassle, and allowing people to claim points by paying with their everyday bank card or mobile wallet, merchants are able to benefit from a deeper understanding of a larger section of their customer base.”

Learn more? Read about 2021 Payment Trends in our CCV Pulse

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