Southwest and Galileo Bring Rewards to Debit’s Doorstep

Watch more: Galileo’s Co-Branded Debit Card With Southwest Airlines

Debit is the payment method of choice for millions of Americans. PYMNTS Intelligence data shows that for their last in-store non-grocery purchase, 39.8% of consumers used a debit card, compared to 29% for credit. Yet even as cardholders increasingly favor using funds already in their accounts, debit users have largely been left out of the rich rewards and loyalty programs that credit card customers enjoy.

Galileo Financial Technologies, in partnership with Southwest Airlines, aims to change that with the launch of the new Rapid Rewards Visa debit card.

Bill Kennedy, Galileo’s CFO and interim CEO, told PYMNTS’ Karen Webster that the timing was right to bring debit into the loyalty mainstream. Travel remains one of the most powerful categories for rewards, and brands like Southwest see the potential to engage customers who prefer debit to credit. “The younger population skews more toward experiences,” he said. “They also skew more to debit. It’s a combination of bringing new customers in, making them loyal to your brand by giving them rewards and access to perks, and building that loyalty with that consumer.”

Lessons From Wyndham

Galileo’s new partnership, announced on Oct. 28, builds on its earlier co-branded debit launch with Wyndham Hotels. Kennedy said that experience showed how important it is for non-financial brands to have a technology partner that can manage the complexity of issuing and processing on one platform. “What we’ve learned — and our proven abilities to eliminate inefficiencies of launching cards — is incredibly valuable to these traditionally non-financial brands,” he said. “We were able to leverage our experiences across all of our customers to continue to drive efficiencies and high-quality experiences.”

Those learnings helped shape how Galileo and Southwest structured their new card, which gives Rapid Rewards members points on everyday purchases without requiring a credit check or monthly fees when balance requirements are met.

The Debit-First Consumer

Kennedy said consumers’ preference for debit is not just about access to credit but about intent.

He added that building loyalty with those customers is crucial. “Debit and credit rewards are different, but they’re still aiming to do the same thing — that is, to build loyalty with the customer for an affinity with that brand,” he said. Loyalty, he said, provides resilience when things go wrong. “If you have loyalty to a brand and then have a bad experience, you give them a bit of a pass. But if you don’t have loyalty, and they’re just a commodity provider, you’re quick to light them up on social media.”

A Win-Win for Brands and Consumers

Kennedy said the economics of debit rewards are different from credit but are now viable because of technology advances and shifting priorities among brands. “These are not as economically attractive as a credit card,” he said. “But that doesn’t mean they’re not valuable. The value from increased customer loyalty and repeat business, and with the efficiencies we’re able to bring, means they can create value. You’re starting to see the blending of those elements come together to create a second value chain different than credit but still valuable.”

Webster said the appeal for brands like Southwest is obvious: more loyal customers who consolidate spending. Kennedy agreed. “We’re able to deliver a unique set of capabilities in an API-first manner that works for the partner, the client, and the end consumer,” he said. “On the brand side, we design a customer value prop with economics that work for the brand.”

Expanding the Travel Ecosystem

Kennedy said the next phase of growth will likely continue in the travel and hospitality space, where experiential spending resonates with Gen Z. “There’s a lot of demand from brands in travel and hospitality right now to layer financial services into their offerings and build that engagement and loyalty,” he said. “These brands were the first movers in loyalty programs on credit. Now they’re on the cutting edge again with debit.”

He said features like installment payment options could also be added in the future. “Buy now, pay later is a function that we have in our platform,” he said. “You’re going to continue to see these programs look for ways to drive engagement, and our platform is flexible enough to allow for innovative offerings.”

Building for Scale

As brands explore co-branded debit, Kennedy said they want confidence in scalability and personalization. “The big questions are, will it be adopted, will it be flexible enough to personalize,” he said. “With our flexible, scalable platform, we enable each brand to personalize their rewards. Wyndham’s value prop is not the same as Southwest’s, and it won’t be the same as the next one.”

The key to success, Kennedy said, is speed and customization. “We sit down with a brand to decide what is the message, what are the KPIs for loyalty,” he said. “It’s not a one-size-fits-all model. We let that brand meet the consumer where they want to meet the consumer.”

Kennedy added that interest among prospective partners is strong. “Sometimes you get cutting-edge technology that comes out and lands with just a few innovators,” he said. “This one has a lot of legs, just based on the interest we’re seeing. We’re very excited about where this is going to go.”