Traditional rewards programs rely on points, cash back and preset incentives that often appear after a consumer completes a purchase. While these programs can influence spending, many issuers say they fall short of driving deeper customer behaviors. Fewer than half report that their current rewards programs effectively improve loyalty and retention, encourage card switching, or influence when consumers spend. As a result, many issuers see a growing gap between the cost of rewards and their impact.
Smart checkout aims to close that gap by embedding rewards directly into the checkout experience. Rather than requiring consumers to activate offers in advance or wait for statement credits, smart checkout uses real-time payment and loyalty data to identify eligible savings and apply them automatically. Consumers benefit from immediate value, while issuers gain an opportunity to make their cards more relevant at the exact point of payment choice.
Interest among issuers is strong. Ninety percent of those surveyed are very or extremely interested in adopting smart checkout, and 87% expect it to become a core part of their rewards strategy within five years. Additionally, 81% believe it will become either a standard capability or a key competitive differentiator within two years.
However, adoption will depend on maintaining trust and control. Issuers want clear governance around targeting, data use, merchant participation, liability and funding. They view smart checkout as a way to modernize rewards while preserving oversight of customer relationships and loyalty economics.
In “The Smart Checkout Opportunity: Why Issuers Are Ready For A Better Rewards System,” learn how:
- Smart checkout could move rewards from an after-the-fact perk into a real-time payment decision tool. This shift could help issuers influence which card consumers choose at checkout.
- Issuers expect smart checkout to reshape rewards economics. Many anticipate more brand- and retailer-funded incentives, along with higher investment in technology and governance.
- Control will determine how fast adoption moves. Issuers want smart checkout systems that offer transparency, caps on financial exposure and clear audit rights before they participate.
About the Playbook
“The Smart Checkout Opportunity: Why Issuers Are Ready For A Better Rewards System” is a PYMNTS Intelligence report in collaboration with FIS. This report examines the strategic, operational and economic position of card issuers and FinTechs regarding embedded smart basket systems, a potential evolution of card-linked offers in which transaction data is evaluated in real time at the authorization stage, enabling eligible card-linked offers, issuer rewards and brand-funded incentives to be automatically identified, optimized and applied at the point of sale without requiring prior cardholder activation.
The findings are based on a survey of 70 card issuers and FinTechs. Respondents held day-to-day involvement and strategic decision-making responsibilities in card issuing, transaction processing, customer acquisition and growth, or customer experience at their organizations.
This research was independently designed, fielded, analyzed, and written by PYMNTS Intelligence with real-world data collected through rigorous survey sampling methods. Research partners provided funding support but exercised no control over methodology, data collection, findings or conclusions.
