Flex Credentials Give Retail Rewards a Second Act

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A loyalty chief at a national retailer can spend an entire morning staring at the same questions. Do you put more money into points? Another discount? A richer store card offer? Or do you accept that the shopper you want is no longer building a life around your brand alone?

She buys skin care from an Instagram label, sneakers from Nike, paper towels from Amazon and a last-minute birthday gift through a Buy now, pay later (BNPL) app. Her loyalty is to whatever helps her stay on budget and still get what she needs.

That is the pressure sitting on retail rewards programs in 2026. The old co-brand playbook assumed frequent in-store visits and steady brand attachment. Todd Pollak, chief revenue officer at Marqeta, argues that model is giving way to a universal spend incentive, powered by a payment credential that can move between debit, installments and other funding options, while still steering rewards back to a brand.

For retailers, loyalty now has to fit into how people manage money across their whole lives, not just inside one storefront.

That is where flexible credentials come in. Pollak ties their rise to the boom in BNPL. Consumers have always wanted ways to buy now and spread out payments. What changed is the delivery. BNPL providers built fast underwriting systems that evaluate purchases in the moment and give shoppers a clearer sense of what they can afford today. These tools are becoming a normal way to manage cash flow. Marqeta is the first issuer processor certified for Visa Flexible Credential (VFC), with VFC cards launched for Affirm and Klarna, plus Mastercard One support.

Pollak sees flexible credentials as the tool to build the next version of a co-brand credit card.

Many of the cards tied to debit and installment options, he said, are being used more like financial management tools. If a consumer already uses flexible spending to run her household, a retailer that stays locked in the old store-card model risks becoming less relevant.

The more useful offer may be this: use one credential wherever you shop, then earn value that pulls you back to our brand.

That shift also changes the personalization debate. Pollak’s view is that brands should still own the customer strategy, even when another party is extending credit. The prize is larger now because the data can be richer.

Describing the promise of broader card programs, Pollak said: “Now I can see your shopping behavior outside the walls of my business. And now I can start to think more holistically about wallet share and how you actually behave as a consumer.”

For retailers, that opens two doors. One is higher purchasing power at their own store. When financing is available, shoppers can buy sooner, shop more often and stretch to larger baskets. The other is better insight. A merchant that can see where else a customer spends can spot missed categories and shape better offers. For consumers, the benefits are clear. They get more flexibility, more room in the budget and rewards that match how they live.

Pollak suggests that strong retailers with high purchase frequency are still benefiting from the traditional co-brand model. But he believes the bigger opportunity may be to widen the funnel. Many legacy co-brand programs reject large numbers of applicants because revolving credit standards are tight. In those cases, retailers have often had a weak fallback. A merchant-branded debit product has not solved the problem for most consumers. A flex credential can.

That is why Pollak expects the winners to treat these products as an extension of co-brand strategy, not a replacement for it. A retailer can still offer the classic card to shoppers who qualify, then present a flexible, installment-based option to those who do not. That second path extends buying power to a group of consumers who want access to credit-like flexibility but may not yet fit the old underwriting box. It also aligns with behavior that is already common. Many shoppers know BNPL well. They do not need to be sold on the basic idea.

The build-versus-partner question then becomes practical. Pollak believes merchants have the opportunity to continue to own the relationship, the offers and the loyalty experience.

He shared the simplest test for any executive considering how to navigate this new reality: “If you are a merchant today, consider reviewing your own conversion data and see what percentage of your purchases are a BNPL loan. And I think you will find, there is your business case for the next iteration of a co-brand card.”

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