Card Linking

The psychology behind card-linking: how behavioral economics drives customer spending

Understanding factors that influence an individual's decision-making, also known as behavioral economics, is crucial for businesses looking to drive growth and engagement. Card-linking leverages various psychological principles to drive consumer spending. Dive into this article to learn more

In today's fast-paced environment, many businesses constantly try to capture their current and potential customers with new marketing strategies. One such strategy gaining momentum is card-linking, a technology that seamlessly connects consumers' credit cards to loyalty programs.

While the ease of use with card-linking is apparent, its underlying success lies in behavioral economics, where psychological concepts shape consumer spending habits.

In this article, we dive into behavioral economics to uncover the psychology behind card-linking and its impact on consumer behavior. More specifically, what features do card-linking programs have that would impact customer engagement?

What is behavioral economics?

Behavioral economics combines economics and psychology to understand customer purchasing decisions. Traditional economic theory assumes everyone acts rationally. However, behavioral economics recognizes many factors that influence an individual's decision-making. It's common for businesses to utilize different marketing strategies to influence customer behavior and increase the level of engagement.

Personalizing spending:

One of the apparent benefits of card-linking is the ability to earn personalized, meaningful rewards in real-time. When customers perceive that the benefits they earn will be of benefit, they are more likely to engage in desired behaviors, such as making repeat purchases or spending more money. In fact, studies have shown that customized benefits, significantly influence customer satisfaction. When consumers perceive valuable incentives, their brain releases dopamine, which is linked to pleasure.

With card-linking, rewards earned, such as cashback, cashforward and rounding, can be directly tied to one's savings, investing, or even donation goals. What makes these rewards stand out versus traditional loyalty points, is the personalization of them. Customers are more likely to engage with the loyalty program by simply offering personalized rewards. Why is this the case? Personalization can make users feel more understood and valued, increasing trust and loyalty towards businesses.

Motivation to earn rewards.

Another factor that drives customer behavior is getting one step closer to reaching. This psychological effect is known as the goal gradient effect. When customers get close to reaching a goal, they are more likely to put more effort into attaining it. When it comes to rewards earned through card-linked programs, customers can set their own goals. Every time they make a purchase, they are one step closer to attaining their goal. Each purchase produces meaning for the customer, influencing their behavior for future repeat purchases.

Another way businesses can utilize this psychological effect to drive customer behaviors is through repeat purchases. With card-linking technology, reward criteria can be tracked in real-time, ensuring that customers are rewarded when they are met. For example, businesses can reward their customers for repeat purchases. A study concluded that customers accelerated their purchases as they progressed closer to achieving the reward.

While certain rewards will motivate customers, rewards that are perceived to be unattainable may do the opposite. A survey found that motivation to participate in loyalty programs with unattainable rewards was very low in 53% of participants. With card-linked programs, customers are rewarded instantly, and they can track their rewards in real-time. These powerful features help motivate customers to stay on top of their goals.

Higher opportunity cost

Another key psychological principle driving consumer behavior in card-linking is loss aversion. Loss aversion refers to the tendency for individuals to strongly prefer avoiding losses as opposed to gaining. Card-linked offers leverage this bias by appealing rewards to consumers' desire to reach their financial goals. And missing out on the potential opportunities can be costly.

Businesses can take it one step further and offer limited-time cashback and cashforward offers, prompting customers to act quickly to seize the opportunity before it's gone. By tapping into these emotions, businesses can encourage engagement and drive immediate action from consumers.

With a traditional loyalty program, customers often accumulate points they can redeem later for benefits. Not only do the points take a while to accumulate, but they may even feel a sense of loss and guilt for depleting their accrued points, especially if the reward is not the one they intended to receive in the first place (Smith, Sparks, 2009). Customers don't feel this loss when they are benefiting in real-time and progressing closer to their financial goals.


In summary, the psychology of card-linking represents an intriguing overlap between behavioral economics and consumer actions. Principles such as personalization, goal endowment and loss aversion are all important for understanding what drives customer behavior. Fortunately, with loyalty programs powered with card-linking, all the factors are taken into account to create the most value for customers and businesses.

How Olive can help

Olive's card-linking platform provides a smoother way for customers to earn cashback and cash-forward rewards, roundup for savings and investments, match donations and reach other financial goals. With direct integration with Visa and Mastercard, Olive guarantees secure and accurate data access, empowering you to deliver real-time rewards and foster meaningful customer engagement.

To learn more about Olive’s card-linking solution for loyalty, visit us here.


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