The Game Director of Overwatch explains details about the progression system and its failed predecessors.
Two Systems, Two Failures
In a new developer video, Jeff Kaplan, the Game Director of Overwatch, talks about the progression systems that have been tried for Blizzard’s shooter – and why they failed.
System 1: Talents and Power Boosting
The first system attempted to use talents, as known from World of Warcraft and Heroes of the Storm. Players earned experience points across matches, allowing various heroes to level up and then purchase certain abilities. One example is Reaper, who fully heals every time he goes into his shadow form. Alternatively, players could double the range of his shotgun.

This system, however, caused so much confusion that it was quickly removed. Since multiple players can play the same hero, it was absolutely confusing and players could never properly prepare for a situation. Additionally, a power gain through time investment was more detrimental to the competitive nature of Overwatch.
System 2: Pure Cosmetics with Player Levels
In the second attempt, they also used character levels, but without equipping them with a power gain. Instead, there were numerous cosmetic rewards that could be unlocked for each hero individually. However, this also led to unwanted behavior: Players became less likely to switch characters during a match (which is crucial for the success of the team) to get “that one reward,” regardless of whether they were a useful team member or not.

The developers describe this system in hindsight as a “small disaster” and have learned that they never want to dictate to players which character they should be playing – not even through a rewards system.
The New Approach
A particularly important incentive was given by Tom Chilton, the Game Director of World of Warcraft, who said: “If it’s not about progression in your game, then don’t focus on it.” The developers want to heed this with the new approach. The main motivation should be the fun of the game and not a reward system. This will be “light and cosmetic” and thank players “for their time in the game.”
This basically doesn’t sound so different from System Number 2, but it probably won’t be limited to individual heroes. What rewards will be exactly, they do not want to reveal yet – players should experience that for themselves.

“Some things are already circulating on the internet, like the spray logos. But that’s just a part of what we have in mind.”
The beta of Overwatch will restart as soon as such a progression system has been implemented. However, this might not happen until February at the earliest, depending on how successful the developers are.