Bridging the Gap Between Loyalty and Payments

The new, effective way to increase customer engagement

In the past decade, technology has evolved in many industries, with innovation bringing a wide range of efficiencies and other advantages. However, it seems this trend has not trickled down into the loyalty ecosystem. Retailers are stuck with legacy technology that prevents them from revamping their propositions, and a mindset that is not conducive to change. It’s time to transform the paradigm – both technologically and in terms of strategic thinking.

The basic principles on which loyalty programs are based have remained the same for decades. In theory, it’s a win/win for both brands and consumers… and yet most programs today are struggling to increase redemption rates and improve customer engagement

For the brand, low redemption rates mean missed opportunities to engage with customers – the prime raison d’être of the loyalty program. Retailers have a vested interest in making it easy for their customers to spend their points. And yet, loyalty today is a red ocean, and it seems that the current paradigm has reached maximum efficiency. Consumers are unable to differentiate between the different, overwhelmingly similar, propositions – a situation that fosters opportunism over real brand loyalty.

What Consumers Expect from Loyalty

Life is expensive, and many households are struggling to keep afloat. When money is tight, loyalty points can have real impact. In fact, IAG found that 92% of UK consumers depend on loyalty programs to help them manage the cost-of-living crisis. Even for loyalty members who are not seeking out additional financial resources to supplement their income, there’s a certain thrill in getting something you value, for free. So, in principle, a loyalty program has the right ingredients for success.

But, it’s not quite that simple. In the modern world, customers look for ease of use and convenience. They want the control that comes with having freedom to redeem their points for a wide range of goods, at a broad selection of outlets. And, when they receive offers and promotions, they want them to be tailored to their needs and preferences. In short, points redemption must be straightforward, accessible and relevant – which, at the moment, they often are not.

What Brands Expect from Loyalty

The prime factor that motivates brands to invest time, money and resources in a loyalty program is to boost customer engagement, in terms of purchase frequency, basket size, satisfaction, and brand advocacy. As we all know, acquiring a new customer is much more expensive than retaining a loyalty one.

When they earn points on their purchases, customers are encouraged to buy more, so they can accumulate more points. Loyalty programs also enable retailers to collect valuable data about customer behavior and their transaction history, which can enable personalization and micro-targeting, inform sales strategy, and facilitate business optimization. Recognizing the importance of choice, many brands invest in partnering with other retailers for points redemption, thereby expanding their networks.

Yet, loyalty is never the brand’s core business. So seamless implementation of a hassle-free solution is essential – but not easy to come by.

"Breathing new life into the loyalty industry, the CoinBridge solution doesn’t just improve efficiencies in the status quo. It changes the loyalty program paradigm by bridging the gap between loyalty and payments."

The Challenge of Change

Bridging the gap between loyalty and payments is one of the most effective ways to increase customer engagement. For a start, consumers are willing to spend 15% more on average, when points are redeemed via Pay with Loyalty. What’s more, 80% of consumers would like to receive product recommendations based on past purchases, so they clearly appreciate the data-driven micro-targeting that loyalty programs facilitate.

Why, then, is it so hard to bridge this gap? What prevents retailers from offering their loyalty currency as a payment method that can be used at the pure discretion of the customer?

One reason is the scarcity of tech solutions. Traditionally, tech development has been focused on the processes of earning and managing points, not redeeming them. And, even where innovation is available, retailers are not necessarily aware of it, and if they are, they may not be prepared to invest in an overhaul of their current program to achieve a marginal increase in efficiency that is likely to generate a relatively small return.

Another challenge is in the legacy attitude of retailers. Many are simply suspicious of innovative tech, while others who are open to it prefer to make incremental changes rather than adopting a revolutionary proposition.

Once a decision in principle has been made to make a change, financial bureaucracy can be another roadblock, whether in terms of the intricacies of regulatory compliance and financial licensing, or the operational aspects of merchant engagement and settlement. After all, retail isn’t always a great fit with financial services. Consider the recent sale by Tesco of its banking arm. Having found capital requirements and customer inertia to be too much of a challenge as it attempted to break into the financial services market, the supermarket giant seems to have decided to stay in its lane.


A Solution Revolution

Breathing new life into the loyalty industry, the CoinBridge solution doesn’t just improve efficiencies in the status quo. It changes the loyalty program paradigm by bridging the gap between loyalty and payments – turning loyalty assets into spendable money, accessible from loyalty apps via e-wallets, and redeemed over credit card rails at any store in the world.

This ticks the consumers’ boxes by providing additional finance resources during the economic downturn, together with freedom of choice for consumers, and a wide range of easy-to-access redemption opportunities. This means they no longer have to scroll through hundreds of offers before they find something appealing – and that’s if they’re lucky! Instead, they can buy anything they like, at any store. And the payment experience itself is as simple as tap and pay – no vouchers, QR codes, or barcodes.

For brands, CoinBridge breaks the status quo, increasing member engagement, providing new out-of-brand sources of data to enable micro-targeting and business optimization, and enabling effortless expansion of partner networks. What’s more, there are none of the technological, financial or resource challenges that brands often face when expanding their loyalty program through partnerships or alliances. All technological, regulatory, merchant settlement, and transaction-handling aspects are covered in a single-point solution, that is simple and fast to implement, with no POS or merchant integration required. All the retailer need do is implement a simple software kit (SDK) into their existing mobile app, and their loyalty proposition is instantly upgraded with infinite redemption opportunities at any shop or website.


Based on innovative, patented technology, CoinBridge is the only solution that delivers an outstanding, seamless experience – from implementation, to use, to payment execution – giving retailers a unique competitive advantage in the market. With 84% of US consumers stating that they are likely to pay with loyalty assets if this option was available to them, it is clear that CoinBridge is the solution the market has been waiting for.

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