For decades, loyalty followed a familiar rhythm: Consumers earned points on credit card purchases and redeemed them later, often after months of accumulation.
That structure still exists, but it no longer defines how loyalty is being designed. Banks, card networks and merchants are now approaching rewards as a way to influence routine payment behavior across multiple methods, with the aim of becoming part of daily spending decisions rather than an occasional incentive tied to a premium product.
This shift reflects mounting pressure from several directions. Consumers are saturated with loyalty programs and increasingly selective about which ones they engage with. Retailers have conditioned shoppers to expect speed, ease and visible value at checkout.
At the same time, a growing segment of consumers prefers debit-first spending while still expecting rewards that feel tangible and relevant, without taking on debt. Together, those forces are pushing loyalty away from delayed gratification and toward immediate usefulness.
Consumer Saturation Weakens Engagement
In a recent PYMNTS interview, Visa Vice President of Loyalty Solutions Avery Walter Miller described the scale of the challenge. While the average consumer is enrolled in roughly 18 loyalty programs, active engagement extends to only about half of them. Signing up is easy, but staying engaged requires programs to deliver consistent value in ways that feel timely and intuitive rather than abstract or deferred.
That engagement gap is central to why loyalty programs are being reworked. When rewards are difficult to understand, slow to materialize or delivered at the wrong moment, they quickly become background noise.
Retail Expectations Carry Into Financial Services
Retail loyalty programs have played a major role in resetting expectations. PYMNTS coverage shows consumers respond to programs that emphasize clarity and immediacy rather than complicated earning mechanics. What resonates is not the promise of future value, but the ability to see and use benefits as part of everyday shopping behavior.
Those expectations do not stop at the retail checkout. Consumers bring the same standards to their banks and payment providers. If a rewards program feels slow, opaque or disconnected from how people already pay, it risks comparison with retail programs that deliver value more directly.
As a result, financial institutions are being pushed to rethink how loyalty fits into the broader customer experience rather than treating it as a standalone feature.
Banks Rethink the Economics of Rewards
The financial underpinnings of loyalty are also changing. For years, bank rewards were funded largely through credit card economics, including interchange revenue and interest income.
Banks are increasingly turning to merchant-funded offers and partnerships. These arrangements allow banks to leverage transaction data to deliver targeted rewards while shifting much of the cost to merchants seeking incremental sales. This approach not only helps manage expenses, but also makes rewards feel more relevant by aligning them with actual spending patterns.
Rather than focusing exclusively on card transactions, banks are beginning to incentivize behaviors that strengthen relationships over time, such as setting up direct deposit, using bill pay, adding a card to a mobile wallet or completing digital onboarding. Loyalty, in this context, becomes a tool for reinforcing engagement across the account lifecycle.
Debit Becomes Central to Loyalty Strategy
Debit is now a central part of that shift. PYMNTS Intelligence reports that debit accounts for nearly one-third of U.S. consumer payments, with about 60 million Americans preferring debit over credit. That preference has significant implications for loyalty because traditional rewards models were built around credit behaviors that do not apply in the same way to debit users.
PYMNTS also notes that tighter lending standards, growing debt aversion among younger consumers and regulatory pressure are weakening the dominance of credit-based rewards. As a result, debit is no longer a secondary channel for loyalty but a primary battleground for engagement.
One example cited by PYMNTS is the Wyndham Rewards Debit Card. Roughly 60% of cardholders who signed up established direct deposit, a signal of consistent usage rather than casual participation. PYMNTS also points to “debit devotees,” estimated at 27% of U.S. debit users, who rely on debit as their main payment method and show limited interest in credit products.
Loyalty Becomes Everyday Infrastructure
Personalization is increasingly part of loyalty design, but it does not replace the need for clarity. Visa’s Miller emphasized that timing and context matter as much as consumer preference, noting that poorly timed offers are often ignored regardless of how relevant they appear on paper.
Loyalty is evolving from a points-based afterthought into an everyday layer of the payments experience. Programs that succeed will deliver value clearly, quickly and at moments that align with how consumers already spend, reinforcing habits rather than waiting for redemption events to create engagement.
