Issuers Say Smart Checkout Could Rewrite Card Rewards

Interest in Smart Checkout

90%

Percentage of surveyed issuers interested in adopting smart checkout.

Core Strategy Adoption Timeline

5 years

Expected timeframe for smart checkout to become a core part of rewards strategies.

Competitive Differentiator Timeline

2 years

Expected timeframe for smart checkout to become a standard capability or competitive differentiator.

§ 01 Executive Snapshot

What: Issuers are increasingly interested in adopting smart checkout systems to enhance rewards programs.
Who: 70 card issuers and FinTechs participated in the survey conducted by PYMNTS Intelligence in collaboration with FIS.
Why it matters: Smart checkout could significantly transform the rewards landscape by embedding incentives directly into the payment experience, potentially increasing customer loyalty and issuer competitiveness.

90% of surveyed issuers are very or extremely interested in adopting smart checkout.
87% of issuers expect smart checkout to become a core part of their rewards strategy within five years.
81% believe that smart checkout will either become a standard capability or a key competitive differentiator within two years.

Traditional rewards programs often fail to effectively enhance customer loyalty, with fewer than half of issuers reporting success in driving deeper customer behaviors.
The growing gap between the cost of rewards and their impact is prompting issuers to seek innovative solutions like smart checkout to modernize their reward offerings.

Immediate market consequences include a potential shift in how rewards are perceived and utilized at the point of sale, influencing consumer card choice at checkout.
Long-term operational implications may involve increased investments in technology and governance to ensure transparency and control over customer relationships.

Potential risks include concerns over trust and control regarding data use, targeting, and merchant participation in smart checkout systems.
Issuers require clear governance frameworks to manage financial exposure and oversight before fully adopting smart checkout technologies.

Issuers will be looking for developments in smart checkout technology that offer transparency and clear audit rights as indicators of successful adoption.
The timeline for broader adoption may hinge on the establishment of trust frameworks and governance structures that address issuer concerns.

§ 07

What is smart checkout?

Smart checkout systems are innovative payment solutions that enhance rewards programs by embedding incentives directly into the payment experience.

Why are issuers interested in smart checkout?

Issuers believe that smart checkout could transform the rewards landscape, increase customer loyalty, and improve their competitiveness.

How many issuers are considering adopting smart checkout?

According to a survey, 90% of surveyed issuers are very or extremely interested in adopting smart checkout.

What risks are associated with smart checkout adoption?

Potential risks include concerns over trust and control regarding data use, targeting, and the need for clear governance frameworks.