Globally, about $620 billion in gift cards are distributed annually, with businesses purchasing half of this amount as incentives, or rewards, for their staff, or clients. And by 2027 this market, which is expanding rapidly, is anticipated to reach $1.9 trillion. We take a look at Rewards-as-a-Service, the new frontier of embedded finance.
The industry for rewards solutions, which includes everything from loyalty programs to e-learning curricula, is projected to be worth $200 billion globally. In a 2017 survey, 65% of businesses reported implementing rewards programs to improve sales and 85% of those reported seeing an increase in sales as a result.
Between 2017 and 2022, the global market for loyalty programs is anticipated to develop at a CAGR of 5-6% to reach $215-216 billion. The total size of that expanding global market is little over $400 billion. Instead of adopting a single strategy, suppliers are concentrating on offering a variety of loyalty programs based on their clients. These consist of loyalty card programs like point-based card rewards, cashback programs, affinity programs and card rewards, among others.
The merging of rewards and fintech
Modern consumers are intelligent. They are conscious of their financial habits. They'll open an account with that provider and use that debit card for the purchases they make at the merchants where they can obtain rewards if they can get cash-back at the locations where they frequently shop.
From the standpoint of the customer, traditional loyalty programs have been dealing with issues including the requirement to register and create accounts, geographical restrictions, rules, and a small selection of rewards options. This is also why brands, including retailers and sports clubs, are under pressure to deepen customer/fan relationships.
Brands have the chance to go from sporadic connections to fulfilling ties that are ongoing. In order to promote the use of brand-led cards and other financial products, relevant and alluring rewards are at the centre of this.
Market first: Rewards-as-a-Service
As shared by Stuart Gregory, Chief Product Officer of Railsr, the world’s biggest brands are making embedded finance and rewards a key part of their loyalty strategies.
As the world’s leading embedded finance experiences platform, Railsr is helping customers drive relationships, relevance and revenue, so brands can deliver game-changing financial experiences that consumers value. Therefore, Railsr’s new Rewards-as-a-Service product is an important step towards achieving the future of finance, delivered by favourite consumer brands.
To find out more about Rewards-as-a-Service, catch our US team at Money20/20 USA in Las Vegas, from October 23rd to the 26th, 2022.