Stop pushing the rock up the hill: digital payments and the reinvention of loyalty and rewards

In Greek mythology Sisyphus could never get the rock to the top of the hill, regardless of how hard he tried. Many payments providers can identify with that fruitless labor when it comes to their loyalty and rewards programs. For years they’ve worked to evolve their strategy and value proposition only to find themselves back at the bottom of the hill with an undifferentiated program that creates a multi-billion-dollar balance sheet liability, but doesn’t drive customer acquisition or volume growth.

Read the report

One problem is that many leaders think they’re already at the top of the hill. Accenture’s recent Loyalty Benchmarking Study shows that 91 percent of financial services executives responsible for loyalty programs believe that members are satisfied with their program. Unfortunately, only 15 percent of customers report being extremely satisfied with their rewards programs, indicating that the rock of competitive advantage has barely moved.

But the move toward digital payments may offer some solace, as new data insights and digital channels provide opportunities for payments providers to remove friction in loyalty transactions while adding relevance and value that will delight customers.

Merchants can now drive consumer engagement in loyalty programs by providing seamless integration with mobile payments. The order ahead and pay functionality is what makes star collection and redemption in the Starbucks app truly rewarding, and rewards are embedded in the coffee-buying experience. For loyalty executives in financial services, finding ways to “keep up with mobile/digital capabilities” is a top priority identified in our loyalty benchmarking study. Behind that focus, there is clearly anxiety that, while the Starbucks of the world are delighting customers every day—bank payment providers are still struggling to create tightly integrated offerings.

A critical piece of the puzzle is contextual marketing and the ability to proactively bring hyper-personalized offers to consumers, often through ecosystem partnerships. Online consumers can visit provider portals like to shop with points while Amazon pushed this to a new level by partnering with multiple payment providers through its “Shop with Points” program. Despite banks and card companies still producing glossy reward brochures with Caribbean beaches and golf clubs on the cover, the “points ubiquity” approach of Shop with Points is the type of redemption initiative that is now driving industry growth.

The next logical step is to bring frictionless redemption to physical point of sale. Apps like RetailMeNot are marketplaces that make digital coupons easily accessible at the point of sale, and they offer interesting mobile redemption opportunities for loyalty programs. Consumers want to redeem rewards when, where and how they want—and the mobile payments channel offers the perfect vehicle to satisfy this need. It also provides a bite-sized way for payment providers to close the gap between perception of value and reality. Elusive value is zero value. So rather than wait to accrue enough points for that Caribbean vacation, consumers can instead get $10 off shopping at Walmart.

Loyalty programs have low barriers to entry, hence the lack of true differentiation. But the move to mobile also creates opportunities to trade points for experiences. Armed with customer insights and location-aware mobile apps, providers can create innovative redemption experiences that are “perishable goods”. For example, a rewards lottery for Super Bowl tickets for everyone attending a New York Giants game, or a points auction at a concert for the chance to take a backstage selfie with Adele. Converting points into scarce experiences delivers high relationship value for low cost, which is great for providers and doesn’t rely on low uptake channels like calling a special phone number to book ‘reward’ seats to a show.

In a world of monolithic reward programs, moving the rock is hard. With digital payments and personalization, the big rock of making loyalty a key business driver can be broken up into a series of pebble-sized initiatives delivered at the right time to the right customers. With that as the competitive advantage, the Sisyphus’ of the payments industry might be able to make it to the top of the hill after all.

For more insight on consumer views on loyalty and digital payments experiences, I encourage you to explore the 2016 North America Consumer Digital Payments Survey.


Alan McIntyre

Senior Managing Director, Global Banking
Alan McIntyre is Accenture's senior managing director for Banking. He is responsible for the industry group's overall vision and strategy, investment priorities, offering development and supporting network of alliance partners. Mr. McIntyre has more than 20 years of experience working with clients in the financial services industry. Before joining Accenture in 2016, Mr. McIntyre was a senior partner in the Financial Services practice at Oliver Wyman. Prior to that, he was Oliver Wyman's managing partner for North America, responsible for its consulting business in the United States, Canada and Mexico. From 2010 to 2012, he served as Oliver Wyman Group's chief operating officer. Mr. McIntyre has an M.A. in Philosophy and Economics from Glasgow University, a Masters of Philosophy in Finance from Pembroke College in Cambridge, England, and an MBA from IMD Business School in Lausanne, Switzerland. He has a passion for orchestral music, serving as chair of the Stamford Symphony in Stamford, Connecticut, and is on the board of the League of American Orchestras. He is involved in a number of educational and cultural organizations in his native Scotland—he is patron of The Institute of Contemporary Scotland and a monthly columnist for Scottish Review magazine. Mr. McIntyre is based in New York.View all posts by Alan McIntyre

Leave a Reply

Your email address will not be published. Required fields are marked *