Traditional loyalty programs worked well in their time, but today they feel slow, generic, and disconnected from how customers actually shop. Wallet-based loyalty programs deliver instant, simple, and meaningful rewards that customers love and businesses can measure.
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Loyalty programs were once the ultimate customer retention tool. They gave people a reason to keep coming back whether that meant collecting miles for the next free flight, or swiping a coffee card to earn the tenth cup free. For years, these programs offered businesses predictable repeat sales and gave customers a sense of extra value.
But the landscape has changed. Today’s customers expect instant rewards, mobile-first journeys, and offers tailored to their needs. Traditional loyalty systems built around delayed points, physical cards, and siloed data are struggling to deliver. Businesses are spending more to maintain them, while engagement and redemption rates keep dropping.
According to Deloitte, nearly half of consumers feel traditional loyalty programs don’t deliver enough value to keep them engaged, and Accenture finds that brands with digital-first, personalised loyalty see up to 3x more participation. The evidence is clear: it’s time to modernise.
Wallet-based loyalty programs are that modernisation. By embedding rewards directly into digital wallets, they turn loyalty from a side activity into a seamless part of every transaction.
Loyalty programs were first introduced as a simple but powerful idea: give customers something extra for choosing your brand, and they’ll keep coming back. Airlines pioneered this in the late 1970s with frequent flyer miles, turning repeat travel into future perks. Retailers and coffee shops followed with punch cards and “buy 10, get 1 free” systems. The idea spread quickly because it worked: people enjoyed being rewarded, and businesses gained repeat revenue.
For businesses, these programs served multiple purposes. They weren’t just about discounts they created data trails on customer habits, helped segment frequent buyers, and built emotional connection through the feeling of being valued. In the 1990s and 2000s, as consumer choice expanded, loyalty programs became the standard retention tool across industries.
But these programs were built for a slower, less digital world. Customers were willing to wait for rewards, and carrying a physical card was seen as normal. In that environment, the original model thrived. Today, with digital-first expectations, those foundations no longer hold.
Most traditional loyalty programs were built on two familiar structures: points systems and tier-based memberships.
Other variations included coalition programs where multiple brands pooled points and brand-specific apps. But all shared common weaknesses: reliance on delayed gratification, physical or digital barriers to participation, and limited personalisation.
In their prime, these schemes were effective. But today, they feel outdated. Customers have dozens of loyalty memberships yet actively engage with only a handful. McKinsey reports that a typical consumer belongs to 17 loyalty programs but actively uses fewer than 5. The rest fade into irrelevance.
On paper, traditional loyalty programs look solid. Customers earn rewards, businesses gain repeat sales it should be a win-win. But in practice, they are falling short in today’s digital-first world. The problems stem from how they were designed: for slower, less connected times.
Traditional loyalty hasn’t failed because the idea is wrong it’s failing because the execution model no longer fits customer behavior or business economics.
Wallet-based loyalty is not just a digital version of traditional schemes it’s a reimagining of loyalty for the way people shop today. By embedding rewards into digital wallets, businesses remove friction, shorten feedback loops, and create more relevant engagement.
Wallet-based loyalty doesn’t just improve loyalty it transforms it into a strategic growth engine that combines ease for customers with measurable ROI for businesses.
According to McKinsey, companies that adopt digital-first loyalty models see up to 2.5x higher engagement rates and stronger retention compared to traditional programs.
Shifting from a traditional loyalty scheme to a wallet-based program isn’t just a matter of swapping systems. It requires rethinking loyalty as part of the customer and payment infrastructure rather than a marketing add-on. That’s where FT comes in.
With us as a partner, loyalty transforms from a cost-heavy program into an infrastructure advantage that drives measurable growth.
The idea behind loyalty hasn’t changed: make customers feel valued so they keep choosing your brand. What has changed is the execution. Traditional programs—delayed, generic, and difficult to use no longer fit today’s digital-first customer expectations.
Wallet-based loyalty represents the next stage. It’s instant, transparent, and personalised, embedded directly in the way customers already pay. For consumers, this creates trust and satisfaction. For businesses, it unlocks lower costs, clearer ROI, and stronger competitive positioning.
The takeaway is clear: the future of loyalty isn’t about plastic cards or forgotten points. It’s about digital wallets that transform every payment into a moment of value.
Book a Strategy Call and let’s reimagine loyalty for the digital age.
