Loyalty & Reward Programmes
February 29, 2024

10 Reasons to Deploy Card-Linked Loyalty Programmes

Card Linked Loyalty Programmes

In this blog post we’ll be looking at card linked loyalty programmes and some examples of how businesses use card linked offers (CLOs) to enhance reward experiences for loyal customers.

Lastly, we’ll look at 10 great benefits (and reasons!) as to why now could be the perfect time to deploy a card linked loyalty programme into your marketing strategy.


Key Takeaways

  • Card-linked loyalty programmes connect a customer's credit or debit card directly to the loyalty programme, eliminating the need for separate loyalty cards or apps. Points are automatically earned whenever the linked card is used for a purchase.

  • Card-linked offers (CLOs) provide personalised, targeted rewards based on a customer's transaction data and purchase history. These offers are automatically redeemed at the point of sale, creating a seamless experience.

  • Benefits of card-linked loyalty programmes include improved omnichannel support, accurate data collection, enhanced customer experiences, reduced churn, increased acquisition, and more foot traffic.

  • Transaction data from linked cards gives businesses valuable insights into customer behaviour and preferences, allowing for highly targeted and timely offers that drive loyalty and engagement.

  • E-commerce and grocery stores can see significant gains from card-linked loyalty, but these programmes are effective for any business aiming to increase customer retention and loyalty.

  • Customers don't need any extra apps or devices to participate in card-linked loyalty programmes - they simply link their existing credit or debit card and start earning rewards effortlessly.

  • Compared to traditional loyalty programmes, card-linked programmes have a lower cost of entry, are quicker to implement, and easily integrate with existing systems.

  • The seamless, convenient experience provided by card-linked loyalty is a key differentiator for businesses looking to stand out in a competitive market and drive specific customer actions through targeted campaigns.


What are card linked loyalty programmes?

Card linking connects your loyalty programme directly to a customer’s debit or credit card. Any time they make a purchase with their favourite brand or e-commerce store for example, the transaction is logged and points are earned in real time. It basically does away with having to get an app up on your phone or a separate loyalty card from your purse to redeem rewards. In a nutshell, it turns a payment card into a loyalty card.

Card linked loyalty programmes also connects customers and brands directly to the card issuer. All three greatly benefit in this ecosystem. It gives customers highly personalised offers and rewards. For retailers, they see improved foot traffic in stores, as customers are incentivised to come in and make card payments to get rewards. Banks on the other hand are able to differentiate from competitors and acquire more customers through special, promoted incentives. 

Hence why we’re seeing mass adoption of linked loyalty by some of the biggest retail banks. These include Mastercard, Visa and Amex. Alongside tech improvements, retailers from every sector, beginning to see the benefit of this programme type, are adapting their own loyalty programmes to accommodate card linked offers.


What are card-linked offers?

Card-linked offers are reward promotions typically seen in other loyalty programmes. The difference here is, the offers are linked directly to a customer’s credit or debit card. These digital offers are tailored to customer behaviours and actions e.g., purchase history – making them highly relevant and personalised to the individual. Digital, card-linked offers are redeemable at the point of purchase whenever existing customers use their linked credit or debit card. 


How does card-linking work?

From a user’s point of view, it couldn’t be simpler. In fact, it’s just a matter of buying what you need or want. Points are then automatically attributed to you. 

From a brief technical perspective, the 16-digit card numbers are tracked upon a transaction with participating card issuers and retailers. Points are then rewarded to the customer through highly secure protocols. From there, special promotions and reward offers, based on past purchases, are sent to the customer for next time. 

The programme also gives customers a full range of preferences to suit their needs. Permission is required to track transactions for example. Indeed, due to the sensitive nature of the data, security measures sanctioned by banking societies protects the privacy of every customer. 


What kind of rewards do card linked loyalty programmes offer?

The most popular rewards are earn and burn loyalty points. Customers earn a certain amount points for every purchase on products or services. How many points they earn per purchase is set by businesses. 

Rewards may vary depending on customer actions too. Discounts may be used as an acquisition tactic to incentivise linking cards to a loyalty programme. Similarly, cashbacks, 2 4 1’s and buy one get one free offers are widely used at varying points of the customer journey. Again, how the incentive looks is totally up to the business.

Where card linked loyalty programmes stand shoulders above other rewards schemes is definitely in personalisation. Retail banks and stores shape highly personalised offers around the crucial data they’ve obtained via transactions. 

As a result, we might see customers get cashback rewards on confirmed favourite items to drive repeat purchases. Or maybe discounts on items they’ve not yet bought but from their previous purchase history are deemed highly likely to enjoy. 

Not only do recommendations from businesses delight and surprise customers (especially when the customer enjoys the recommended product!), it also makes them more receptive to future cross-sells and upsells. It also individualises the customers. This makes the loyalty programme more customer centric.


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Is card linked loyalty viable for your business?

Evolving customer expectations are shaping the way businesses aim to nurture customer relationships. A card linked loyalty programme is an ideal method for businesses aiming to retain customers or secure more repeat customers.  


World of convenience but at what cost? 

We’ve quickly transitioned into a digital-led world. This has seen every part of our lives change in some way. Usually some form of tech is used in place of original legacy solutions we once depended on. Card linking is just another example of tech that’s paved the way towards a new day-to-day in the digital world.


Digital-centric solutions are improving convenience and streamlining accessibility. For example, card linked loyalty programmes give customers instant rewards simply for using their bank cards with participating brands. This could be a customer earning points for simply paying for their weekly shop with their bank card. 

Let’s remember though that not every innovation comes packed with a comprehensive catalogue of error-proof solutions. Unforeseen problems sometimes arise as a result of the changes we’ve made. Take high street retail and the restaurant sectors for example. Traditionally, these industries relied on heavy footfall. 

Now as we’re full swing into an evermore world of convenience, both of these sectors are suffering from reduced foot traffic. Conservative spending habits are also exacerbated by the current cost of living crisis (CoL crisis) which makes the issue of less footfall more profound.

The study also ran a test case in Seattle. The results of which looked even more promising. Trucks were shown to produce 20-75% less carbon dioxide than shoppers driving to grocery stores. 



Digital shift to cashless society 

Then there’s the shift to an ever-increasing cashless society. Just the mere act of purchasing at the point of sale is unrecognisable from a decade ago. Largely in thanks to digital payments, which currently stand top of the list as the number one preferred payment method.


49% of payments in 2021 were digital and are set to rise by 4% to the tune of 53% overall global processed payment by 2025.  

In the same report, credit cards ranked second as a preferred payment but their prominence is set to decrease in a few years. That’s expected considering people want to borrow less in the current economic climate. A view coinciding with the fact that debit card payments are projected to remain the same because they don’t incur fees. It stands to reason then that card purchases won’t be a redundant payment method any time soon. Which is great news for card linked loyalty! 

We should also consider the use case of contactless payments. The average amount spent in contactless payments has increased from £11.86 in September of 2021 to £15.30 in December of the same year. The proportion of payments that were contactless in 2021, amounted to 69% for debit and 56% for credit cards.

It may be argued this trend may see a dip during a CoL crisis. However, better technology is paving the way for permanent solutions in the long term. The Bank of England for example is weighing up demand for the digital pound. A UK version of a CBDC (central bank digital currency) that makes payments centralised, seamless and instant. All of which will culminate in a transformative transaction model from huge corporations to small businesses.


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A card linked loyalty programme is hugely beneficial

So if there’s any doubt as to whether card linked customer loyalty programmes are viable, the above should ease some reservations you may have. Reservations you may have developed after reading a few online sources which claim this type of loyalty programme has already seen its end before it even got started. 

Quite rightfully we dispute such claims entirely. You need only look at how card linked loyalty is benefiting businesses, retail banks and most importantly their customers, right now. 

The 2021 Annual Industry by Digital Commerce Alliance (DCA) revealed some promising statistics.

Loyalty programmes of brands who participated in card linked functionalities reported 100% growth. Compare that to a survey conducted by the CardLinx Association just five years earlier, in which over 50% of respondents claimed a 50% growth rate in card-linked transactions. 

Going back to the DCA charter; they were able to identify sectors – namely E-commerce and grocery stores – as the most suited industries for card linked loyalty. Something which you should seriously consider if your business falls into either of these categories and you want to boost your conversion rates.


Does card linked loyalty have a future?

As for the future prospects of card linked loyalty, key takeaways from a 2020 study shows that 75% of Millennials and Gen-Zers are more likely to visit a store that offers CLOs. What’s more, they’d be willing to repeat business with said store. 

This actually doesn’t come as too much of a surprise. After all, Gen-Zers are digital natives. Convenient methods of shopping, communication, transport, the way they consume entertainment in this digital world of ours, is all they’ve ever known. 

Millennials on the other hand, are the youngest demographic in the digital nomad camp. Although they’re the last generation of the pre-digital age, they’ve grown up amidst the advent of mass digitalisation and adapted to it rather quickly as a result. 

Generation X have also grown accustomed to digital innovations. The study shows similar findings across these three generations, with them answering pretty much in favour of CLOs.

With that in mind, it’s safe to say card linking capabilities are absolutely a long term, viable customer loyalty solution. It’s not going anywhere. And with the advent of even better tech coming to the market, and the increasing power of supportive demographics on the horizon,  it’s only just the beginning.


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10 Reasons why you should deploy a card linked loyalty programme

There’s definitely benefits to card linked loyalty programmes. Otherwise we wouldn’t be seeing a positive trend in adoption rates. Especially from huge names such as Mastercard and Visa. If that isn’t a big enough indicator already… 

Here’s ten reasons as to why you should implement a card linked loyalty programme: 


1) Offers a seamless experience

As we mentioned earlier on the blog, card linked reward programmes allow customers to earn and spend loyalty points as they go about their business. The tech allows operators to offer personalised incentives e.g., cashbacks directly back to the user’s payment cards without any hassle. 

This means customers can passively take full advantage of the loyalty programme whilst at the till, without spending any more time there, in an instant, frictionless conclusion of a convenient and rewarding purchase experience. 

Convenience-driven consumers are a common marketing persona in the retail world. With as much as 78% of retail customers stating that a convenient shopping experience is important to them now more than ever. 

A card linked loyalty programme ensures you deliver a fully convenient shopping experience. From the moment a customer steps into your store right up to the point of purchase.


2) Optimises omnichannel support 

The capabilities of your omnichannel support is greatly improved by data-led innovations like customer loyalty programmes. These benefits compound more so as a result of the innovative tech behind card linked rewards schemes. For example, transactional data informs targeted adverts via online bank statements. 

That’s right! In America right now people receive personalised adverts alongside their personal statements. This type of marketing is known as card linked marketing (CLM). 

If a recipient is interested in the promotion, they simply accept it. Credit is automatically applied by the bank on the debit or credit card, which the customer uses in the participating store, to automatically redeem a discount, cashback or another promoted reward. 

Seamless between channels, straightforward and backed by data, even provides an opt out service; linked loyalty takes your omnichannel game to a whole different level. And that’s important because omnichannel support is crucial for engagement and retention. In fact, it’s been shown to retain up to 89% of customers.

3) Accurate data acquisition

Accurate data is paramount for personalised offers. Card linked loyalty programmes allow you to capture every transaction. Due to the seamless and frictionless nature of the scheme, data acquisition and analysis is also streamlined and centralised. 

As customers go about their day, their behaviours and the way they interact with promotions on omni channels are monitored. Without having to disrupt their typical shopping habits or taking up their time with feedback surveys. Which, quite frankly, are considered annoying, totally ignored or filled in arbitrarily. 

This means you gain better insights about your customers directly from transaction data. Allowing you to paint a more accurate picture of each customer. A result of which leads to meeting their specific needs and preferences.  


4) Enhances customer experiences

Collectively, a convenient shopping experience, omnichannel support and highly accurate data, allow you to deliver a truly enhanced experience. It goes without saying that this leads:


  • To stronger engagement.

  • Gives customers incentive to champion your brand.

  • Better loyalty and customer trust for consistently delivering a high standard service.  


It's implications go much more further than that too! Card linked loyalty programmes pretty much guarantee that customers will never miss out on their rewards. Even when they forget about them! So long as they process card transactions, there’s no risk of forgetting to scan a barcode in an app or produce loyalty cards at the point of sale. 


5) Reduces customer churn

The fact that retailers and merchants can also reach customers with highly targeted offers, results in higher value propositions. Naturally, customers are more drawn to promotions seemingly relevant to them. With the type of loyalty programme in place that relies on data-driven incentives, chances are offers will resonate more effectively. 

The result of this is higher retention. As the data yields insights of possible attrition or churn, you effectively prevent that from happening by delivering a data backed offer. If successful, the customer will feel it’s relevant and personal to them. There’s nothing more consumers love than brands who understand their customers. 

This of course insulates your business from competitors and helps you set the right frequency of sent offers to mitigate lapsing behaviours. Effectively approaching the customer at the right time and in the right way. 


6) Drives customer acquisition

As evidenced by the stats we shared earlier, the programme type is also an effective acquisition tool. Various studies and reports substantiate this. After a number of businesses implemented card linking functionalities, they saw massive growth in their customer base participating in their existing loyalty reward programmes.  


7) Increases foot traffic

You could argue this falls under acquisition. We feel in this instance however, increased foot traffic warrants as a reason good enough to stand on its own. The reason for this is due to the survey we found during our research. Industries that traditionally relied on foot traffic are seemingly the best suited to card linked loyalty programmes.

Not just clothing retail or grocery stores either. Even chain restaurants would benefit from this as right now the great majority depend on loyalty schemes which involve too much time to sign up to and redeem. 

Another factor here; in-store shoppers are susceptible to cross-sells and upsells. What’s more, data collection from this loyalty programme provides an opportunity to review performances of premises by analysing in-store redemptions


8) Lower cost of entry 

We’ve seen how each reason benefits your customers and thereby benefits you. However, this reason is solely focused on the business side of things. Card linked loyalty programmes alleviate the technical burden of setting up and managing a loyalty programme. 

With the right platform provide, your card linked loyalty programme could be:

  • Up and running within weeks.

  • Fully branded in 20 minutes.

  • Affordable and scalable. 

  • Easy to manage with assisted support from loyalty experts. 

What’s more, the tech involved in this loyalty programme type is compatible with most existing loyalty programmes. So there’s no reason to worry about replacing your current environment should you be interested in card linking.


9) Eco-friendly 

Sustainability is a great way of appealing to eco-friendly customers. It also leads to amazing innovation and it’s just a positive thing for your brand to champion. Which is extremely important for brand equity and building emotional connections with customers. 

In this instance, card linking tech could help you save on costs. It most definitely will help you deliver eco-friendly initiatives, such as e-receipts. Finally, it removes the need to use physical loyalty cards made out of plastic. 


10) Sets you apart from the competition 

What’s more, a card linked loyalty programme is a huge differentiator. People are more accustomed to loyalty rewards and benefits. Usually what follows in the conversation is what a person must do to gain those rewards. With a card linking tech implemented in your programme, all customers need to do is register their cards once. 

After that first and only step, they do what they always do. Shop at their favourite store, subscribe to their preferred services, whilst gaining points every time they purchase. 

Finally, a card linking loyalty programme allows you to launch specific campaigns in creative ways, in order to achieve certain objectives. This may vary from increasing basket size, to improving footfall rates on otherwise typical quiet days.  


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Card-linked loyalty programmes are the future 

As digital currency becomes more prominent and banks continue to innovate, the use case for card-linked loyalty programmes will grow significantly. The majority of consumers now have credit and debit cards connected to their mobiles.

In the same way our increased reliance on mobile apps for processing and tracking payments paved the way for mobile loyalty, banks pursuing a compelling point of difference with their customers, is shaping the way they reward loyalty. Rewarding customers with incentives simply for using their bank cards, gives them another reason to stick with the bank.



What is card linking and how does it work with loyalty programmes?

Card linking connects a customer's credit or debit card directly to a loyalty programme. When the customer makes a purchase using their linked card, the transaction data is logged and loyalty points are automatically earned in real time. It turns the payment card into a loyalty card, eliminating the need for separate loyalty cards or apps.


How do card-linked offers (CLOs) enhance the reward experience for customers?

Card-linked offers are personalised rewards and promotions based on a customer's purchase history, linked directly to their credit or debit card. CLOs provide highly relevant, targeted incentives that are automatically redeemed at the point of sale when the customer makes a purchase using their linked payment card. This creates a seamless, convenient reward experience.


What are some key benefits of implementing a card-linked loyalty programme?

Card-linked loyalty programmes offer several advantages: 

1) Seamless, frictionless experience for customers; 

2) Improved omnichannel support; 

3) Accurate transaction data for personalisation; 

4) Enhanced customer experiences that drive engagement and loyalty; 

5) Reduced churn through targeted offers; 

6) Increased customer acquisition; 

7) Drives in-store foot traffic; 

8) Lower cost and easier set-up compared to traditional loyalty programmes.


How can card-linked loyalty programmes help businesses better understand their customers?

By tracking transaction data from linked credit and debit cards, businesses gain valuable insights into customer behaviour and preferences. This data allows for highly targeted, personalised offers based on past purchases. Companies can better understand their customers at an individual level, without surveys or extra effort from the customer. The data helps proactively reduce churn and optimise the customer experience.


What role does personalisation play in the effectiveness of card-linked loyalty programmes?

Personalisation is key to the success of card-linked loyalty. By leveraging transaction data, businesses can deliver highly relevant, targeted offers to each customer at the right time. Personalised CLOs have higher redemption rates and drive increased customer loyalty and engagement. Customers feel valued when they receive offers and recommendations tailored to their individual preferences and needs.


How can card-linked loyalty programmes help drive in-store foot traffic for retailers?

Card-linked offers can be used strategically to incentivise customers to visit physical store locations. By providing enticing rewards and discounts that can only be redeemed in-store, retailers can boost foot traffic. The transaction data also allows businesses to analyse in-store redemption rates across different locations. Increased foot traffic provides more opportunities for cross-selling and up-selling.


What industries are best suited for implementing card-linked loyalty programmes?

According to research, e-commerce and grocery stores are the industries that can benefit most from card-linked loyalty programmes. However, any business that relies on repeat customers and aims to drive loyalty can see significant gains, such as retail, restaurants, and service-based businesses. The key is providing a convenient, seamless experience and relevant rewards for customers.


Do customers need to use a special app or device to participate in card-linked loyalty programmes?

No, a key benefit of card-linked loyalty is that it doesn't require any extra apps, devices or separate loyalty cards. Customers simply link their existing credit or debit card to the loyalty programme and then earn and redeem rewards automatically whenever they make a purchase using that card. This creates a frictionless experience and makes it easy for customers to participate without extra hassle.


How do card-linked loyalty programmes benefit businesses from a cost and implementation standpoint?

Compared to traditional loyalty programmes, card-linked programmes can have a lower cost of entry and are easier to implement. With the right platform provider, a card-linked loyalty programme can be up and running in a matter of weeks, with full branding available in 20 minutes. The technology is affordable, scalable, and compatible with most existing systems, without a huge upfront investment.


How can card-linked loyalty programmes help businesses differentiate themselves from competitors?

In a crowded marketplace, offering a seamless, convenient loyalty experience through card-linking is a significant differentiator. Customers are drawn to programmes that allow them to effortlessly earn and redeem rewards without extra steps. Card-linked programmes also enable more creative, targeted loyalty campaigns that drive specific customer actions. This level of personalisation and ease of use sets businesses apart from those with more generic or complex loyalty programmes.



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