The flurry of discussion generated by Durbin in 2011 is now shifting to the rapidly evolving merchant-funded loyalty landscape. Program economics have shifted focus from interchange income as the primary driver to offers and merchant funding as key components.

As 2012 progresses, the always-on promotional shopping sites no longer seem to suffice. Programs that launched first as online malls and later added in-store promotions continue to make headway, but new offer types are now the focus as issuers compete to remain relevant and generate engagement.

In the future, the consumer experience will include traditional point or cash back components, and will also include a series of targeted offers that provide high value and sometimes stackable returns layered into the program. For example, a credit card holder could earn 1% cash back on all transactions, an additional 2% within a select category code and also opt in to an offer for 10% cash back at a favorite home improvement store. These rich, layered offers can only be made possible with a proven retailer recruitment strategy that aligns the needs of consumers, the financial institution and the retailer to create a high value, mutually beneficial relationship.

By layering in fresh, high value offers, payment card programs will shift from the traditional point or cash back programs to opportunities for daily engagement, brand reinforcement and a deeper relationship.

Molly Plozay is vice president of loyalty services at First Data.