How to Build a Successful Cardholder Loyalty Program

Fashionable young woman making a contactless payment in a luxury store

Loyalty programs can move your card to top of wallet


Cardholder loyalty rewards have evolved dramatically from the static programs that gave consumers points and updates every 30 days. Today, loyalty is far more dynamic: consumers have myriad payment options, so card issuers must stay focused on maintaining engagement, evolving with the market and meeting consumer expectations.

Cardholders expect a superior, 24/7 digital experience from issuers, but also want the personalized approach of a small-town banker who knows everyone who walks through the door. Loyalty today is often based on how well issuers strike the balance between treating cardholders as real people and as digital citizens.

Loyalty programs can enhance the connection between issuers and cardholders. But having a cardholder in a program doesn't necessarily equal success. 

Expectations & Experiences Consumer Trends Research from Fiserv: AI, Payments Innovation and the Shifting Financial Ecosystem, October 2023

The challenge for issuers is determining how to craft a rewards program that drives engagement and stands out in a crowded market. How will you get consumers to participate? How do you achieve top-of-wallet status?

Here are three foundational elements for building a successful loyalty program.

1. Be proactive

I love earning airline miles through one of my cards, and regularly redeem the points for travel. But when inflation started to rise, my issuer sent me an email saying I could switch to double points for fuel for a month.

The issuer was immediately responsive to how the market was changing.

Many loyalty systems are still based on statement cycles, so program updates are visible only in the next statement. That timing doesn't keep pace with a world that can change so quickly.

For many issuers, the first loyalty program change at the start of the inflationary spike was a focus on fuel. But maintaining top-of-wallet status didn't end there. When retail prices also rose, nimble loyalty programs pivoted to offering rewards for groceries.

It's about being responsive to everything that's changing. The world is constantly evolving. Strong loyalty programs match that evolution.

2. Know your consumers

Traditional rewards programs give consumers a point for every dollar they spend with their card. It's strictly a transactional view of the customer.

More sophisticated rewards programs look beyond the transaction to a more holistic view of the cardholder. For example, if someone gets an auto loan with a financial institution, an issuer could give the cardholder double points on gas purchases for the next 30 days.

Issuers also can reward cardholders on their birthdays or for being a member or customer for a certain number of years. Or they can offer points when cardholders engage with the financial institution through social media.

The opportunities to reward cardholders are plentiful, but the goal remains the same: making consumers feel like you know them. The point of a rewards program is to drive engagement. Whenever financial institutions can reward and encourage that engagement, they're building a holistic view of cardholders.

3. Let your consumers choose

Giving consumers choice in how they redeem their points is based on understanding that no two people are the same.

I love earning airline miles, but my friend, who owns a small business, is always redeeming points for gift cards so she can give them to her employees. Consumers expect a full suite of redemption options, whether that's charitable gifts, travel or merchandise.

Financial institutions can take it a step further by customizing the redemption store. Just as the options for earning points are nearly limitless, so too are the possibilities for redeeming them. You could allow cardholders to earn cash back to their checking or savings account, skip a loan payment or even spend them at the point of sale as a payment method.

Creating choice, in both earning and redeeming, strengthens engagement with consumers.

Fiserv offers uChoose Rewards


A flexible rewards program that enables clients to differentiate themselves by enhancing the value of their payment cards, uChoose Rewards® helps boost transactions, increase revenue and improve profitability. uChoose Rewards offers a variety of redemption options, including merchandise, cash back, gift cards, travel and pay-with-points at the point of sale.

With uChoose Rewards, clients select the type of program that matches their strategic objectives and preferences. The uChoose program can include merchant-funded or issuer-funded offers, or a blend of the two. Cardholders can pool points across all registered accounts and cards to earn rewards faster.

You’ll get rewarded

Remaining top of wallet requires evolving with the rapidly changing market and heightened cardholder expectations. It requires rewarding cardholders in a variety of ways and letting them choose those rewards.

Loyalty programs no longer are built on "set-it-and-forget-it" principles. Financial institutions that adjust their programs to match changing consumer behaviors will likely discover that the benefits of true engagement and loyalty go well beyond points, programs and rewards.