Key Highlights
- A card programme can define cashback or points as a unit of value and let their users spend it on cards, so earned value needs no redemption portal.
- Reap's Virtual Assets capability is what allows a reward to become spendable on the card.
- The programme adds reward value to a user's balance, and takes back whatever stays unspent. It cannot claw back more than the user has left.
- Rewards sit on the same card as every other balance the user holds, so a cashback balance can run alongside a credit line or a payroll allowance.
Earned value does not need its own surface. A card programme can define cashback, points or a sign-up bonus as a unit of value with a fixed rate, allocate it when a user earns it, and the card spends it like any other balance.
Reap's Virtual Assets capability is what makes that possible. It lets a programme define any unit of value it can name and price, and a reward is one such unit. This is the how-to.
Why the redemption portal is the expensive part
A conventional rewards programme ships as a second product alongside the card. The user earns value in one place and spends it in another, so the programme builds and staffs the second place.
A conventional programme typically puts five steps between earning a point and using it. The user earns on a transaction, the points land in a separate balance, the user navigates to a rewards surface, picks from a catalogue or converts at a stated rate, and someone fulfils the redemption. Each step is a build and a place users drop out.
The catalogue needs stocking and pricing. The conversion rate needs a page explaining it. Support handles the redemptions that fail. None of that work is about the card.
How to make a reward spendable, in four steps
If you choose to run an eligible card programme with Reap, you can make rewards spendable in four steps. Only the first step is a one-off.
1. Define the reward as an asset.
Give it a symbol, a decimal precision, and a fixed rate that prices it in the programme's billing currency. A dollar-denominated credit takes a rate of 1.00. A points system takes 0.01, which makes one hundred points worth one unit of the billing currency. Programmes name these by what they are: CASHBACK_USD, BONUS_USD, POINTS.
2. Grant value with a deposit.
When a user qualifies, post a deposit against their account for the amount earned. The balance becomes spendable on their next card transaction.
3. Let the card spend it.
The reward is part of the account's available balance, so the reward spends at any merchant that takes the card. No catalogue and no claim step sit in between.
4. Reclaim what expires with a withdrawal.
When an offer lapses, debit whatever the user has left of it.
A rewards balance shares one spending limit with every other balance on the account, so the user sees a single available figure. How to make virtual assets spendable on a card covers that mechanism in full.
What you can build with it
Here are some examples of what you can build when rewards can be spent:
- A sign-up bonus to welcome new users: A card programme wants to give new users a reward when they complete onboarding. To do this, it defines a dollar-denominated bonus at a fixed rate of 1.00 and allocates the value to each eligible user. The bonus then contributes to the user’s available balance without a separate claim step.
- Reward ongoing spending with cashback. A card programme wants to give users cashback based on eligible card activity. It calculates the reward according to its own rules, then allocates the value when it is ready to credit the user. This could happen after each qualifying transaction or at the end of a statement cycle.
What you configure, and what the issuer handles
The client (/the programme) defines each reward, sets its rate, decides when and how much to grant, sets any expiry rules, and funds the programme.
The issuer authorises card transactions, applies postings to account balances, and handles clearing and network settlement.
What happens when you change a reward later
Two changes behave in ways worth knowing before you make them.
Changing a rate takes effect immediately. Updating what a point is worth changes every holder's available balance at once. The change is stored with a timestamp, so past balances still recompute against the rate that was active at the time.
Ending an offer is a status change, not a deletion. Disabling an asset drops it out of balance computation and keeps its history intact.
Limits to consider
- The programme funds the reward. Cashback and points come from programme funds, and the master account must have enough funds to cover card spending.
- Card debt reduces what the user can spend. A reward adds spending power, but outstanding card activity reduces the amount available.
- Only unspent rewards can be reclaimed safely. Before a reward expires, the programme should check how much is still withdrawable rather than reclaiming the original amount.
So can loyalty points be spent directly on a card?
Yes, when the programme defines the points as a spendable asset with a set rate. The points become part of the account's available balance, and the card spends them at any accepting merchant. No catalogue or claim step sits in between.
How Reap Can Help
Reap's Virtual Assets capability lets clients make rewards spendable on card. A client defines a reward asset, sets its rate, and allocates value when a user earns it. The card spends it alongside every other balance on the account.
- One definition per reward type. Cashback, a sign-up bonus and a points balance are three definitions on the same integration.
- Fund the programme through one master account. The client-funded master account backs card spending across the programme, so adding another reward type does not require a separate funding flow.
- Control when value is granted or withdrawn. Clients allocate rewards when users earn them and can withdraw the unspent amount when an offer expires.
- Rewards sit on the same card as everything else. A programme can pair a cashback balance with a custodied asset balance, a credit line or a payroll allowance, all on one available figure.
Virtual Assets runs inside Reap's wider Embedded Finance suite alongside card issuance, risk and programme operations. Check out our API docs.
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