Abstract: A system and method for facilitating the distribution and settlement of electronic loyalty programs is described. The system facilitates the distribution of electronic punch card loyalty programs from an offerer, such as a product manufacturer, to an end-user and/or retailer. The user downloads the electronic punch card to a loyalty applet maintained on a microchip-enabled device such as a smart card. This smart card may then be used at various retailers to take advantage of the offerer's loyalty program. Alternatively, the host system may maintain the loyalty punch card without downloading to the user and provide access to a retailer upon the occurrence of a transaction with the user. The retailer is configured to recognize the presence of a loyalty punch card, process loyalty program information and interact with a host loyalty server system to update loyalty program data. A host system computerized clearing house captures loyalty program data and processes this data for settlement (i.e.