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iSeatz releases its 2nd Annual State of Loyalty Credit Card Rewards Report

Analysis of the rewards programs offered by major North American card-issuing banks reveals opportunities for optimizing points redemption strategies.

NEW ORLEANS – iSeatz, a leading provider of travel loyalty technology and digital commerce solutions, has released its 2nd annual State of Loyalty Credit Card Rewards report. The report, which analyzes the rewards programs of the 27 largest and most prominent credit card issuing banks in North America according to the types of benefits offered to cardholders in the last 12 months, serves as a benchmark of reward redemption opportunities and engagement strategies in the financial services sector.

The report identifies several major trends in the credit card rewards landscape, specifically relating to travel loyalty. Demand for experiential travel, personalized marketing and engagement, and embedded finance features like Buy Now, Pay Later (BNPL) are key highlights. The analysis offers mixed reviews of how credit card rewards programs are addressing these trends; for example, adoption of BNPL capabilities has increased 250% since last year’s report, while relatively low percentages of banks are providing redemption opportunities associated with experiential travel, like tours and activities (52%), live events (37%), dining (19%) and wellness (15%).

“We know that North American consumers are eager to travel, want more control and flexibility around their travel experience and are looking to their travel rewards programs for those benefits,” says Kenneth Purcell, CEO and Founder of iSeatz. “But while some financial institutions are leaning into this demand by restructuring their travel loyalty platforms and introducing new experiential travel redemption options, the overall pace of transformation has been slow.”

The Buy Now, Pay Later Surge

Accompanying consumer demand for travel is an increased need for payment flexibility, in which BNPL plays a prominent role. At a time of rising prices when value is a key consideration for many travelers, it’s unsurprising that BNPL saw the most striking year-over-year adoption growth. It also represents a prime opportunity for banks to integrate their core offerings into their rewards programs by acting as both the retailer and financier of the travel transaction. The expectation is that even more banks will weave BNPL functionality into their travel rewards checkout processes in the future.

Moving Towards Personalized Engagement

Advances in technology, specifically AI (Artificial Intelligence), also suggest that more personalized travel loyalty experiences are on the horizon. But even with the widespread availability of tools like ChatGPT, the report finds that true personalization remains out of reach for many rewards programs. This remains a significant opportunity for travel rewards programs to boost their perceived value among members. A different iSeatz report found that 70% of consumers who said they receive personalized recommendations through their rewards booking site say their current loyalty programs provide them with the value they are looking for, compared to 44% who receive no personalized content.

It’s All About Experiences

If greater personalization is what the future holds for credit card rewards programs, expanding their suite of lifestyle-related redemption options is an opportunity they can seize right away. Some institutions are doing precisely that: three of the 27 banks analyzed in this year’s report added redemption options for tours and activities and live events this year, while one each rolled out options for wellness, food delivery, and charitable giving. Whereas emerging 2022 trends like support for cryptocurrency payments and digital wallet partnerships lost steam this year, supplementing existing redemption choices with options centered on experiences is still a winning strategy.

“With so much competition among issuers with rewards programs, it’s crucial that reward programs give members the ability to use their points how they like, on what they want,” continues Purcell. “We expect several banks to try to differentiate themselves this year by expanding their redemption portfolios and positioning their programs to better meet cardholder needs and desires.”

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