Are You Rewarding The Right Customers? Here's How To Close The Loyalty Gap

Forbes

19 hours ago

Derek White, CEO of Galileo, is a fintech pioneer with over 20 years of experience modernizing financial services globally.
Consumer needs have outpaced the financial solutions built to serve them. Most Americans use debit as a primary payment method—more than 90% of U.S. adults have a debit card—but they're not getting rewarded for their spend or brand loyalty.
Traditional loyalty programs were built around credit cards. Points, perks and upgrades are doled out to those who spend the most—on credit. However, this system ignores a huge segment of the population who chooses debit as their go-to payment method. Many younger, more budget-conscious consumers are overlooked in traditional loyalty strategies. That's a missed opportunity hiding in plain sight.
Over the years, I've helped build financial technology across banks, startups and platform companies—each offering a different lens on how people interact with money. What's become clear to me is that we've been measuring the wrong thing. Loyalty isn't about how much credit someone uses. It's about how often they engage with your brand—and how you respond.
The Case For Debit Rewards
Most Americans have a debit card. That's not new. But what's shifted is intent.
Younger demographics—especially Gen-Z—are opting into debit by choice. Many are debt-averse, others are part of the 46 million Americans considered 'credit invisible'—meaning they don't have a sufficient credit history to generate a credit score. Either way, they represent a growing population of consumers who show loyalty to brands through their spending behavior but are consistently excluded from loyalty ecosystems.
This disconnect reveals something fundamental: Most loyalty programs weren't built for how many people actually pay today. They were built for a narrower view of value, one that's overdue for rethinking.
A Lesson From The Past
Early attempts at debit rewards fizzled—not just because of clunky tech, but because the economics were broken. Regulatory changes reshaped interchange fees and made traditional models hard to sustain. Brands couldn't justify the cost, and the infrastructure couldn't deliver the experience.
But what didn't stick a decade ago is finally gaining traction—not because the idea changed, but because everything else did. Consumer preferences have transformed, and technology has evolved. The appetite for embedded finance has grown. And brands are far more invested in owning the full customer experience—not just the moment of purchase.
We're finally seeing the conditions that make debit rewards viable: real-time processing, scalable APIs and platforms that bridge the gap between brands, banks and consumers. The tools exist to deliver value instantly and in context. That shift is what's unlocking debit's loyalty potential.
The New Opportunity For Brands
Brands aren't trying to be banks. But they do want to be closer to their customers. Financial tools—especially those built into everyday experiences—offer an ideal way to do that.
It's not about creating gimmicky perks. It's about recognizing where consumer behavior already is and showing up there in relevant ways. If your best customers are paying with debit, rewarding them shouldn't feel like an edge case—it should be the default.
The companies leaning into this space are responding to data. They see how often their customers use debit and realize that loyalty isn't tied to a payment method. It's tied to repeat purchase behavior.
A New Kind Of Loyalty Model
Here's the bigger picture: what's changing isn't customer loyalty, but the way brands recognize and reward it—moving from credit‑card spend to acknowledging repeat engagement, regardless of payment method.
In the old model, the highest-value customers were those who charged the most to a branded credit card. In the new model, brands are recognizing customer loyalty through interactions and behaviors, not payment methods. That opens the door for financial tools that fit into a person's daily life—not just their occasional splurges.
Debit rewards make this possible in a way that's sustainable. They allow brands to engage a broader customer base without pushing credit, and they provide a more inclusive on-ramp for customers who want to participate in loyalty programs without taking on new debt.
This isn't about replacing what works. It's about expanding access to those who haven't had it.
What To Watch For Next
If the last era of loyalty was defined by credit-card points and airline miles, the next will be shaped by flexibility and showing up in the moments that customers care about most. Brands will build rewards systems that fit multiple payment types. Customers expect personalization across every brand interaction. And debit—often the most overlooked payment choice—will play a leading role in that transformation.
This shift won't happen overnight. But for companies willing to meet their customers where they are—and reward them for how they actually behave—the upside is significant.
There's a lesson here for anyone building loyalty strategies: Look past assumptions. Behavior changes fast. Expectations change faster. And the most valuable customers aren't always the ones your models were built to serve.
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