A Guide on Card-linked Loyalty

by Natasha Ambavle |

According to the Digital Commerce Annual Report 2021, 35% of businesses indicated their card-linking programs grew by more than 100%. Based on input from fin-tech, ad-tech, and merchant leaders worldwide, the global trade association’s 2020 findings also show significant industry growth, including a 40% increase in the share of advertising budgets devoted to card-linking. Study participants included companies such as Microsoft, Samsung Card, Rakuten, TransUnion, Bank of America, RBC, Mastercard, Discover, FIS, Total Wine, Hilton, and many more from four continents and more than 10 countries. Card-linking technology is also the second most preferred ad channel and has unanimously emerged as the most promising new technology in loyalty marketing.

So, what exactly is card-linking, and why are businesses worldwide adopting this technology to enhance their loyalty offerings? Let’s explore.

What is Card-linked Loyalty?

As the name suggests, card-linking technology is basically linking a customer’s credit card information to a loyalty program. This technology allows the brand to directly collect customer information through an API.

Imagine, John is visiting a certain departmental store for the first time. He pays the bill at the checkout using this credit card. During checkout he’s offered an option to enroll in the loyalty program. John says yes and, without additional registration formalities, he’s enrolled in the program. The next time John visits the store, points are automatically added to his wallet during checkout.

Card-linking technology bypasses the chaos, frustration, and friction at checkout—including loyalty program registration, status, offers, and more—enabling fast checkout and a seamless customer experience. In the meantime, it enables your business to collect valuable data, such as customer purchase history, location, date, time, offline and online tracking information, and mode of payment among other quantifiable information.

What’s in it for Customers?

Card-linking technology essentially turns the customer’s credit card into a loyalty card. This technology ensures the digital loyalty card is compatible with the payment medium. In short, it ensures customers never miss out on earning loyalty points, irrespective of whether they do or don’t have a physical loyalty card with them during the purchase.

It also enables your brand to combat the rising issue of loyalty fatigue. Due to various reasons, customers may lose interest or grow tired of a loyalty program. They may still repurchase but may not actively collect and redeem their points. With card-linking tech, points are automatically added to the customer’s virtual profile and customers are notified when it’s time for redemption, keeping the customers engaged and entertained without any effort on their part.

A whopping 79% of customers find it tedious to carry a physical loyalty card. Card-linking technology eliminates the need to produce a loyalty card or scan QR codes and receipts to create a seamless customer experience. It curbs the chaos at checkout without requiring customers to share their information, speeding up the process considerably. It enables your brand to create a frictionless experience and helps keep the audience engaged with your loyalty program.

What’s in it for Businesses?

First-Party Data—A study conducted by Harris Poll for Redpoint Global shows 63% of customers expect personalization and have zero-to-low tolerance for impersonal and irrelevant engagement. Creating meaningful and personalized experiences for customers is only possible with first-party data. With Google planning to phase out third-party cookies by the end of 2023, your loyalty program can easily become the prime source of collecting customer data. Card-linking technology enables you to accumulate first-party data directly from the sourcegiving you a holistic customer view. This provides a more in-depth understanding of customer purchase history and patterns, enabling you to create more meaningful and relevant experiences that add value across the entire customer

Increased Participation Rate—53% of Americans participate in a loyalty program because it’s convenient, says a recent study on loyalty programs. Convenience and great rewards are key to increasing loyalty program participation rates. Card-linking technology completely takes care of the first aspect. Card-linking makes it extremely convenient and quick for customers to collect points and redeem rewards without furnishing their cards or using their mobile apps. The ease of use combined with exciting rewards further encourages customers to actively participate in the program and, in most cases, also positively influences their network.

Increased Engagement—With the vital zero- and first-party data collected via card-linkings, you can do so much more to improve the customer experience and overall customer satisfaction. Multiple research reports 80% of consumers are more likely to make a purchase from a brand that provides personalized experiences. Designing preemptive actions and automated responses to create a frictionless and personalized customer experience and helps you improve engagement and retention rate.

Low-cost loyalty entry—Card-linking technology not only creates a seamless experience for the customers, it’s very convenient for businesses to adopt and execute. It’s cost-efficient and easier to set up and manage. Since this technology is compatible with most loyalty points programs, there’s no need to upgrade your existing checkout system. In fact, this technology can help with cost-saving and eco-friendly initiatives, be it in the form of e-receipts emailed to customers or reducing plastic-waste by eliminating the nearly 30,000 tons of PVC annually used to create physical cards.

How Can You Integrate Card-linking Technology with Your Loyalty Program?

To empower your brand and loyalty program with technologies like card-linking you need the expertise of a loyalty partner like Annex Cloud. With Ayden and Worldpay as card-linking technology partners, Annex Cloud can help you create a secure card-linking system. These partnerships enable safely registering customer payment cards and wallets using shopper recognition, then Annex Cloud automatically attributes points to customers when they pay. Annex Cloud oversees the execution and can also help you design the best-suited loyalty strategies for your business. Contact us to explore how you can better leverage card-linked loyalty to elevate your customer experience and drive growth.

Card-linked loyalty is one of our ten trends and predictions for 2022. Read about all 10.

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