Smart Checkout Gives Issuers a New Way to Win Top of Wallet

For 20 years, the homepage, search bar and app feed controlled consumer discovery.

But findings in “The Smart Checkout Opportunity: Why Issuers Are Ready For A Better Rewards System,” a PYMNTS Intelligence report in collaboration with FIS, reveal that a new wave of payments innovation is shifting influence away from the homepage and toward the checkout itself.

Nine in 10 of the issuers surveyed for the report say they are highly interested in adopting smart checkout, and see it as making rewards more relevant as consumers choose how to pay. The implications are profound. If the homepage once determined what consumers saw, the checkout increasingly determines what they choose. Fewer than half of issuers say their existing incentives drive loyalty, card switching or spend timing.

The transition is being driven by “smart basket” technology, an embedded checkout model that evaluates transaction, payment and loyalty data in real time to deliver personalized offers directly inside the payment flow. Instead of generic rewards programs operating in the background, issuers and merchants can dynamically present incentives tailored to a specific customer, item or purchase context at the precise instant a transaction occurs.

AI Turns Checkout Into a Recommendation Engine

A consumer browsing a homepage may or may not purchase. A consumer entering payment credentials has already crossed the psychological threshold into transaction mode. That moment creates unusually high leverage for personalized interventions. A well-timed discount, financing option or loyalty reward shown at checkout can alter payment choice, increase basket size or even influence merchant selection in ways traditional advertising struggles to achieve.

The PYMNTS data suggests consumers recognize that value. In companion research cited in the report, more than three-quarters of shoppers said a smart basket experience would influence their choice of default payment method or merchant. Retailers, issuers, payment networks and FinTechs are all racing to control that surface.

The homepage is still important. Search still matters. And feeds still shape awareness. But the center of gravity is moving downstream toward the moment where intent becomes action and where data, incentives and payments converge simultaneously.

As with everything in 21st century commerce, artificial intelligence is set to accelerate this trend. As AI systems gain access to richer transaction-level data, checkout can evolve into a continuously adaptive recommendation engine. Rather than serving static offers, future payment experiences could dynamically optimize incentives based on spending history, merchant priorities, inventory levels, loyalty status, credit risk and even contextual factors like location or time sensitivity.

Read the report: The Smart Checkout Opportunity: Why Issuers Are Ready For A Better Rewards System

The New Battleground for Consumer Influence

The checkout captures intent at its peak. For issuers, smarter checkout opens an opportunity to reclaim strategic relevance in digital commerce.

After all, banks have for years risked becoming commoditized infrastructure while large technology platforms and retailers captured the consumer relationship. Smart basket systems offer issuers a way back into the center of transaction decision-making. A well-timed discount, financing option or loyalty reward shown at checkout can alter payment choice, increase basket size, or even influence merchant selection in ways traditional advertising struggles to achieve.

Three-quarters of issuers surveyed by PYMNTS said they expect smart basket systems to increase their control over loyalty and rewards economics.

Still, financial institutions remain deeply concerned about governance, liability, data privacy and economic exposure. Many issuers want strict control over targeting rules, merchant participation, offer timing and funding thresholds before joining broader checkout ecosystems. The future checkout may be intelligent, but it will also be tightly negotiated.

That tension points to the next major competitive battle in commerce: not simply who owns the consumer relationship, but who governs the rules of real-time influence.