AI and Tokenization Revolutionize Personalized Loyalty Programs in Commerce

Tokenization and agentic AI are reshaping loyalty and rewards programs, making them more personalized and automated. According to a PYMNTS Intelligence report, 46% of cardholders actively earn and redeem rewards, but the process often lacks efficiency. The study highlights that 75% of cardholders value ease of access, while 74% prioritize personalization in rewards programs.

The Power of Tokenization

Tokenization replaces traditional 16-digit card numbers with unique, secure tokens. These tokens can carry permissioned consumer data, enabling richer, more contextual rewards. Major networks like Visa and Mastercard report explosive growth in tokenized transactions, with Visa noting 13.7 billion tokens issued.

Agentic AI Enhances Rewards

Agentic AI leverages tokenized data to automate and personalize rewards. For example, Visa's Intelligent Commerce APIs rank offers based on spending habits, while Mastercard's Agent Pay uses programmable parameters to streamline discounts.

Key Benefits

• Personalization: Rewards align with individual preferences.
• Automation: Reduces the need for manual reward hunting.
• Fungibility: Tokens enable rewards to travel across merchants.

This evolution marks a shift from merchant-specific loyalty programs to network-wide rewards, driving engagement and card usage.