Visa highlights AI and data as new battleground for loyalty
Consumer expectations around loyalty programs are evolving rapidly, and traditional points-based models are no longer enough to sustain engagement.
Avery Walter Miller, vice president of Loyalty Solutions at Visa, argues that rewards must now be meaningful, contextual and delivered at precisely the right moment, reports PYMNTS.
While consumers remain enthusiastic about joining loyalty programs, they are increasingly selective about which ones they actively use. On average, individuals are enrolled in more than 18 programs, yet interact with only about half of them. This gap highlights a growing fatigue with generic offers and poorly timed incentives. Loyalty today is less about accumulation and more about relevance. Programs that fail to integrate naturally into daily life risk being ignored altogether.
Banks rethink loyalty amid margin pressure
For decades, bank loyalty programs were built around credit cards and funded by interchange margins. According to Miller, this structure shaped how rewards were designed, with the primary goal of driving card spend. However, pressure on fees and profitability is forcing banks to rethink this approach. Loyalty is increasingly being viewed as a broader relationship strategy rather than a single-product incentive.
Banks are now looking to reward behaviors such as deposits, bill payments and digital engagement, even when those actions do not generate immediate revenue. This shift reflects a focus on long-term customer value instead of short-term transaction gains. To make this work, institutions must find new funding sources and more efficient ways to deliver value.
Data, context and AI reshape engagement
Data plays a central role in the next generation of loyalty programs, enabling banks to understand customer intent, timing and preferences. Miller emphasized that personalization alone is not enough if offers are delivered at the wrong moment. Context determines whether a reward feels helpful or intrusive. Merchant-funded offers are also gaining importance, allowing banks to enrich rewards without straining their own economics. These partnerships benefit merchants through higher conversion and consumers through more relevant incentives.
At the same time, artificial intelligence is intensifying competition by optimizing targeting and automating decision-making. In an AI-driven environment, loyalty becomes a continuous contest for attention at every transaction.
Recently we wrote that Jim Cramer is still backing NVIDIA (NVDA) despite the stock slipping about 10% since early November, arguing the market is undervaluing the company relative to its long-term intellectual property and strategic dominance in AI infrastructure.
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