Mastercard’s Pay with Rewards service is to relaunch at the end of this year with a new app that will allow cardholders to pay with the points or miles they have collected from any card, airline, hotel or retail rewards program that has signed up to use the service at any Mastercard merchant worldwide.

No upgrade to merchants’ hardware or software is required, Mastercard’s Kyle Clark told NFC World at the Money20/20 show in Las Vegas this week, as transactions are processed at the point-of-sale as standard payments.

Merchants will also pay their standard transaction fee for the amount of the purchase made by a cardholder, regardless of whether the customer is paying in ‘cash’ or points.

In fact, Clark added, the merchant will not necessarily even be aware that the customer is paying with points as the Mastercard network will handle reconciliation transparently, in the back end.

The app, which will be available on a white label basis and can be integrated into a bank or other loyalty points issuer’s existing app, provides cardholders with a wide range of options for how and when they wish to use their points to pay.

They will also have the ability to choose to pay with points both before they make a transaction and after their purchase is complete.

A cardholder can, for instance, choose to pay with their available points for any transaction over US$20, Clark explained, or only on particularly large or small purchases. They can also choose to use their points to cover part of the cost of a particular purchase.

Cardholders will receive a transaction notification each time they make a purchase with their points. This will set out the total they have paid for their purchase and the fact that they have paid with their points or miles, Clark said.

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