3d illustration of a brand name with the letter a shaped like horseshoe magnet. Metallic word over black background. Concept of brand awareness

How brands can reinvent loyalty with embedded finance

The following is a guest post by Kim Van Esbroeck, Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion.

Establishing a following of loyal customers is key to the success of any brand. With competition for consumer attention fiercer than ever, the best businesses are looking to embedded finance to innovate their existing loyalty strategies.

Research shows that 84% of consumers are more likely to stay loyal to a brand that offers a rewards program, with an additional 66% claiming that the ability to earn rewards changes their spending.


Meanwhile, with inflation at 40-year highs, a further 90% of consumers say they are more interested in discounts, using coupons, and earning cashback rewards when they shop than ever before.

Most brands offer loyalty schemes in some form or another, from traditional stamp cards and point-based programs to apps that provide personalized prompts and rewards.

However, loyalty schemes haven’t changed much since they first emerged, with some of the earliest modern loyalty programs dating back to the 1980s, with the introduction of frequent flyer programs designed to collect customer data.

Today, loyalty schemes haven’t changed much, and very few businesses offer solutions beyond basic points-based systems.

These programs are now table stakes, and the best brands understand they need to provide real, tangible benefits to cultivate true loyalty.

Magnet and figures of people. Customer acquisition and retention.

Embedded finance: the next-generation loyalty solution

For brands looking to build deeper relationships with their customers and promote long-term relationships, Banking-as-a-Service (BaaS) enabled embedded finance provides a compelling solution.

One benefit of BaaS is that brands can seamlessly integrate payment solutions into their existing loyalty cards and apps to provide convenience. One of the most potent examples of embedded finance is Target’s REDcard, which gives customers an instant 5% cashback.

In short, customers see these benefits as creating cost savings, and this meant that REDcard shoppers increased their shopping carts by 50%, with REDcard spending contributing to over $8.9 billion in volume annually and 12.1% of all Target sales.

The Starbucks rewards platform is another successful case study for loyalty platforms powered by embedded finance. Customers can load funds into their accounts, earn rewards, pay for purchases, and pre-order using their smartphones.

The platform drove 55% of the company’s US operating revenue in Q4 2022 and has over 28.7 million members registered in the U.S. alone. The app holds more than $1 billion in funds stored by users within the platform – in context, more than 85% of U.S. banks have assets.

Flexible lending products are another way brands add value and choice to customer journeys. BaaS-powered products like Buy Now and Pay Later can be easily integrated into existing loyalty programs.

Providing convenient access to credit and installment payments directly in a brand’s loyalty card or app gives customers more options when purchasing products; this leads to greater conversion, higher average basket size, and higher purchase frequency for brands.

Research has shown that eCommerce retailers offering BNPL see a 20-30% increase in conversion, while more than 49% of people spend more when using BNPL than they would if they were paying by credit card.

Moreover, brands can boost their loyalty programs by leveraging valuable spending data and providing customers with personalized rewards and discounts to keep them engaged.

A new approach to loyalty

In the current economic climate, where brands are vying for consumer attention and budgets are strained, brands are discovering that embedded banking can transform their customer journey and innovate their loyalty programs.


  • Kim Van Esbroeck

    Kim is Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion. Kim is responsible for growing Vodeno/Aion’s business through commercial activities and business development. Aion Bank and Vodeno are commercial partners offering BaaS services in Europe, combining Vodeno's API-based technology with financial products based on Aion's ECB licence and regulatory and compliance expertise. Together, Vodeno/Aion are uniquely positioned to offer comprehensive embedded financial services for banks, lenders and merchants across multiple sectors.

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