FIS executive says card rewards need to move closer to checkout

Banks and card issuers are under pressure to redesign loyalty programs around the checkout moment, where consumers expect value to appear with minimal effort, according to Mladen Vladic, head of product for payment networks at FIS. In an interview with PYMNTS, Vladic said the competitive issue is shifting from the size of rewards to the ease, timing and relevance of redemption.

Rewards programs have often been adjusted through changes to points, miles or cash-back formulas. Vladic said that approach has not gone far enough because it leaves the customer experience largely intact, even as shopping and payment habits change.

“We overindexed on making incremental changes without really redefining and reimagining the experience that we are putting out there for consumers and staying relevant,” Vladic told PYMNTS. He said “ease of use and removing the friction” should guide brands, financial institutions and card issuers.

The checkout process has become a frequent point of direct contact between financial institutions and their customers. If a reward is hard to find, presented after a purchase decision or requires a separate redemption process, the program may lose value for the consumer even when the economics appear attractive.

Vladic said personalization is central to improving that experience. He told PYMNTS that issuers need to deliver “the right time, the right message, the right offer to the right audience,” and should treat loyalty as part of a broader payment card strategy rather than as a stand-alone benefit.

That does not mean banks should abandon familiar rewards structures, according to Vladic. He said institutions should update existing programs while keeping features customers already recognize. New forms of rewards or digital experiences should add to established models rather than replace them immediately.

Merchant partnerships become a competitive lever

Vladic also pointed to merchant relationships as an important way for issuers to differentiate rewards. Partnerships with retailers and other businesses can support discounts or experiences that a traditional rewards catalog may not provide.

“I do believe there is an opportunity, and it is a gap,” Vladic told PYMNTS, referring to the role of partnerships in rewards strategies.

For banks, those relationships may draw on corporate banking clients, merchant customers or business account holders. Such arrangements can give issuers access to offers that are harder for rivals to replicate, widening competition beyond interchange economics and headline rewards rates.

The expansion of card ecosystems also raises oversight questions. Vladic said artificial intelligence is likely to make governance more significant in the next several years as issuers use automation in customer-facing payment experiences while remaining subject to regulatory and operational requirements.

Banks weigh partners against internal builds

Vladic said banks need to become more technology-enabled to meet customer expectations, but should not lose focus on their main businesses. He said institutions should concentrate on areas such as lending, deposits and payments rather than trying to operate as software companies.

Partnerships are the practical route for many institutions, he said, because banks often run complex legacy technology environments. The right provider can add modern customer experiences on top of older systems without requiring a full internal rebuild.

“I think that now more than ever selecting the right partner that can drive the innovation and layer that innovation on top of many legacy systems … is absolutely the key,” Vladic told PYMNTS.

FinTech companies continue to shape consumer expectations, according to Vladic, because customers typically judge the experience rather than the provider behind it. They expect checkout to be quick, rewards to be relevant and digital tools to work without additional steps.

Vladic said large institutions retain substantial budgets and customer bases, while smaller financial institutions are increasingly testing new approaches. He told PYMNTS that many smaller institutions are “embracing [a] new way of thinking,” narrowing a historical gap in payments innovation.

This story draws on original reporting from PYMNTS.