The Next Layer of Loyalty: How Embedded Finance Is Powering Emotional Engagement

Loyalty is evolving. Instead of focusing on points and discounts, leading brands are now blending payments, rewards, and financial tools to create continuous customer engagement - a transformation driven by embedded finance. 

From Points to Payment Experiences

Embedded finance integrates services such as payments, cards, or wallets directly into non-financial environments. According to Bain & Company, embedded financial products processed USD 2.6 trillion in transaction value in 2021 and are expected to surpass USD 7 trillion globally by 2026. This shift allows brands to interact with customers at the moment of payment - one of the most frequent and emotionally charged brand touchpoints. 

Brands such as Starbucks and Target illustrate this integration. The Starbucks Rewards app merges stored-value accounts with loyalty, while Target's REDcard links payments directly to customer benefits, increasing purchase frequency and brand affinity (Financial IT). 

How Embedded Finance Builds Loyalty

Embedding financial features lets companies turn every transaction into a data-driven, branded interaction.  

A clear example is Club Brugge’s “Club Pay”, a fan debit card that rewards supporters for purchases within the club’s network. According to the Embedded Finance Review, the program connects payments directly to loyalty points, proving how sports and entertainment brands can turn financial interactions into engagement loops. 

Data, Personalization, and Trust

While embedded finance opens rich opportunities for personalization, it also raises expectations around data use and transparency. 

Capgemini reports that 73% of customers find loyalty programs impersonal, underscoring the need for better data application and trust management. Embedded finance can help bridge this gap - if implemented with strong privacy, consent, and compliance frameworks. 

McKinsey also notes that brands entering financial services must manage regulatory and operational complexity carefully, ideally through licensed partners that provide infrastructure, compliance, and risk management layers. 

Conclusion

Embedded finance adds a new dimension to loyalty: it connects every payment to the brand relationship. By integrating branded cards, digital wallets, or wearable payments, companies can turn transactions into moments of engagement - strengthening retention, personalization, and trust.