Adoption of mobile loyalty cards is set to accelerate over the next five years, with more than 3bn loyalty cards operating as either mobile-only or integrated into mobile apps by 2020, up from 1.4bn last year.

According to a new study by Juniper Research, brands and retailers are increasingly responding to consumer demand for mobile integration, with many now offering customers the opportunity to store loyalty cards within a dedicated digital wallet.

Increased adoption of mobile loyalty and digital wallet functions will greatly improve targeting and personalisation capabilities for brands that make use of them, leading to greater activity rates among consumers, improved understanding of shopping patterns and resolving a key failing of traditional loyalty schemes where the lack of relevant offers has resulted in downturns in usage.

However, there is still widespread variation in how retailers and other reward card providers have integrated mobile loyalty into their offerings, and how well they have promoted the capability to existing users. While 40 per cent of Nectar Card holders have downloaded its loyalty app, less than four per cent of Tesco Clubcard users have done so.

“These disparities are likely to result from a number of factors,” said Dr Windsor Holden, author of the research. “While in part they may reflect the level of satisfaction with the app and/or the features it offers, they may also be attributable to a greater degree – or greater success – of retailer marketing of their digital loyalty options.”