Debit Rewards Are Retail’s Next Game Changer, Says Galileo

Co-branded debit rewards are helping companies boost loyalty and customer engagement, Galileo Financial Technologies CEO Derek White writes in a new PYMNTS eBook, “Halftime 2025: Charting the Future of Payments.”

As the second half of 2025 unfolds, one emerging trend in the payments landscape is the renewed focus on debit rewards. This shift is being driven by market demand, changing consumer preferences, integrated technologies and innovative partnerships that are allowing banks, FinTechs and brands to boost loyalty and customer engagement while opening new revenue opportunities.

Historically, loyalty programs have focused on credit card usage. This model left out 46 million consumers with little to no credit history — especially younger, debt-averse or credit invisible individuals — who use debit cards for everyday transactions. Today, over 90% of U.S. adults carry a debit card, and many brands report a significant share of airline and hotel purchases are made with debit. Yet until recently, these consumers’ loyalty and spending have gone largely unrecognized.

Several converging trends have made debit rewards both viable and attractive in 2025. Beyond shifting consumer preferences, technological advancements have changed significantly. Real-time processing, scalable APIs and embedded finance platforms now allow brands to deliver instant, personalized debit-based rewards experiences. New economic models have further enabled brands to offer sustainable, inclusive loyalty programs that don’t rely solely on credit card spend.

Recent launches in the hospitality sector highlight this evolution. For example, Galileo Financial Technologies and Wyndham Hotels & Resorts introduced the first co-branded debit rewards card in hospitality in the U.S., allowing travelers to earn points on everyday debit transactions. This innovation recognizes that debit is not just a payment method but a vital touchpoint for deepening customer relationships. When travelers use debit to book hotel stays or dine out, they are rewarded for those transactions, integrating financial behavior directly into the loyalty experience.

This progress is enabled by advancements in programs that integrate card issuing, processes and program management into an API-first platform, without the need to juggle multiple vendors. What once took a year or more to launch can now be implemented in months, reducing program complexity and accelerating time to market. The changing economics, driven by scale, modular architecture and access to multiple sponsor banks, opens up new monetization models, making debit rewards strategically valuable.

Looking ahead, the opportunity extends well beyond hospitality. Retailers, travel brands and other consumer-facing businesses are exploring how to engage debit-first audiences with tailored rewards. The next wave of innovation centers on personalizing rewards and enhancing their role in the overall customer journey, leveraging automation, artificial intelligence (AI) and advanced analytics to boost engagement, loyalty and retention.

The first half of 2025 made it clear co-branded debit rewards are gaining traction as a meaningful loyalty building strategy across multiple industries. As digital expectations rise and payment method preferences shift, this marks a decisive pivot toward more inclusive, flexible loyalty models — designed for how consumers spend today. The winners in the next wave of payment trends will be those who close the loyalty gap by meeting customers where they are and rewarding them accordingly.