Creating a Scalable Credit Card Rewards Platform

As consumers change the ways they shop, purchase, and manage their finances, card issuers and merchants can work together to provide a scalable rewards experience.

For decades, merchant loyalty benefits came in the form of “punch 10” cards, barcoded keychains, and phone number based rewards. But as consumers abandon these outdated behaviors, merchants are looking for new ways to keep them engaged, and credit card issuers are perfectly positioned to offer a scalable, digital solution.

Currently, most credit card loyalty programs look like this:

  • customers spend money to earn points
  • customers redeem points with major brands partnered with the issuer

There are a few limitations to this model. For one, it doesn’t scale well, locking out the majority of merchants, including direct-to-consumer merchants, who are capturing a larger share of consumer spending each year. 

The current points programs require significant involvement across legal, technical and marketing teams, limiting card issuers’ abilities to include a diversity of merchants in their rewards platform. Airline miles are great, but consumers also shop for clothing, dine out, and sign up for increasingly popular box subscriptions. Customers crave broad reward programs that are personalized to their various spending habits, and by tapping into modern fintech capabilities, card issuers can begin to offer merchants a rewards platform at scale.

It’s Not (All) About the Money

Rather than relying solely on passive point-earning, loyalty programs can do more to inspire action from customers. One approach is to offer up-front card membership benefits that don’t require spending first. Chase, for instance, offers cardholders a free year-long subscription to DoorDash’s DashPass as long as they use their Chase card. Cards like UBER’s Barclays card offer free device protection to holders who use the card to pay their monthly cell phone bill. 

This doesn’t mean issuers have to ditch points altogether. Rather, they should consider self-serve rewards platforms that broaden the range of merchants offering a diversity of perks to cardholders.

By involving merchants of all sizes in a rewards marketplace, card issuers can give customers access to coupons and incentives for using their credit card at direct-to-consumer businesses in addition to popular brands. Cardholders could even use their credit card app to manage multiple loyalty accounts across their favorite brands and automatically earn rewards when they use their linked card.

Goodbye phone numbers and punch cards.

Card issuers can now create a digital marketplace of loyalty rewards where customers review offers from their favorite brands, authenticate their accounts, and even get redirected to merchant sites to begin shopping immediately—streamlining the offer-to-purchase customer journey. A reward platform like this helps online merchants build customer loyalty and increase order size and frequency.

With this model, merchants reward customers for making purchases with a linked card, and card issuers reward them for shopping with their favorite brands. By incentivizing customers to repeat this double-rewards experience, everybody wins.

Welcoming Mom-and-Pops to Rewards

There’s a reason why mom-and-pop shops aren’t already included in most credit card loyalty programs. Historically, creating these partnerships was too complex and unscalable to see significant ROI.

Thanks to today’s digital platforms, that’s no longer a problem. Merchants can easily implement, offer, and scale their own loyalty programs within an issuer’s rewards marketplace. Card issuers don’t need to keep a balance sheet of earned and spent customer reward points. Instead, they can simply host merchants’ offers on their platforms alongside issuer-funded offers, making it easier for customers to find and take advantage of the ones that align with their spending habits.

This model gives cardholders access to a much larger reward catalog without the need for lengthy negotiations and contract-building between issuers and merchants. A streamlined digital process could allow merchants to initiate a partnership and provide all necessary information to add their business to the card issuer’s marketplace.

Once complete, the merchant gets to expand their customer reach via the marketplace, and the card issuer gets increased usage from customers when they make purchases. Digital reward programs can even help merchants connect online advertising campaigns with in-store and online purchases.

Rewards platforms also enable more cost-effective acquisition than methods like affiliate programs or inbound marketing, which can take time to generate real ROI. With easy merchant onboarding and immediate program activation (customers can begin using discounts and memberships to make purchases as soon as a brand goes live in the marketplace), issuers and merchants enjoy immediate returns for their efforts.

Creating Symbiotic and Sustainable Loyalty Programs

After the events of 2020, consumers are more aware than ever of the importance of supporting their community and shopping small, and their habits show it. The opportunity is ripe for card issuers to adapt and invite brands of all sizes into their loyalty programs. 

With loyalty programs that are relevant to customers, card issuers don’t need affiliate sites and other indirect means of acquisition. Instead, they can foster a direct, symbiotic relationship between cardholders, merchants and their brand, creating a new cycle of loyalty where everyone benefits. 



Sandeep: Tell me a bit about the early part of your career.

Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.

Sandeep: What is something you learned during this time that helped you with consulting?

Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.

Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.

Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.

Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an skills definitely translate into the corporate environment.

Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.

Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?

Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.

Sandeep: What has stayed the same?

Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not's what I love about consulting.

Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?

Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.

Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?

Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.

Sandeep: Tell us about a business hero of yours that I may not have heard of before.

Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact

Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?

Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.

Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?

Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.

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