Digital gift cards are combining the traditional uses of gift cards as currency among gifters and gift receivers, and the cutting edge technology of mobile payments. As mobile payments and mobile wallets because more common at retailer POS, employers can begin to think of digital gift cards as easier solutions to employee reward, health and wellness and safety programs. Here are three reasons digital gift cards are the wave of the gift card future:
The popularity of the gift card is on its way up. With the development of mainstream mobile payment systems, digital or egifting has gained popularity. Egifting reached a 4 billion dollar level in 2013, that's eight times higher than in 2012. With the convenience of one online check-out to make both purchase and delivery, the convenience factor of egifting along with the overall popularity of gift cards have created the perfect gift for consumers' busy schedules. With U.S. gift card consumption reaching levels higher than the GDP of 136 countries, there is plenty of gift card spending to go around and egifting continues to gain a higher percentage of spending. For more gift card trends and facts check out this infographic from CEB Tower Group.
A Boston area start up may have a breakthrough in the very slow adopting mobile payments market. Loop is an e-wallet that not only attaches to your phone like a case, but actually works with your retailer's existing POS system. Mobile payments were predicted to have taken off by now, and adoption is still occurring but at a much slower rate. Mobile payments that aren't compatible with existing retail POS systems are tough for retailers because a change to a national chain's POS, involves a large scale hardware upgrades which cost money and take a long time. Bringing mobile payments to retailers existing systems is taking a new approach to this mobile payments puzzle. It puts the investment on the consumer, who is choosing to use the system, rather than force retailers to provide a system that they don't have guaranteed ROI from. Since Loop is set to hit the market this winter, we will see soon if this alternate approach catches on. The adoption has been slow but the potential could be high. For more information on mobile payments check out this article from the Boston Globe.
At GiftCard Partners, we have been working hard to help gift card brands navigate the complicated eGifting technology landscape in their journey to offer eGift Cards. We've found that even though retailers accept that they will find new incremental gift card sales with early adoption, they have not rushed to do so. Forbes.com reports 70% of the retailers, recently evaluated in a CashStar study, now offer digital or “eGift cards”. This is up from 60% in 2011 and 40% in 2010. This is good news for consumers as we rely more and more on technology to organize our lives, but for retailers looking to offer eGift cards in the B2B marketplace; technology is a bit more complicated. But let’s get back to the important questions retailers ask themselves of their gift card program when preparing to go digital…”should we offer eGift cards yet?” Or “should we be early adopters or should we wait for other retailers to figure it out”? Chain Store Age online offers us their Top 6 Misconceptions About eGift Cards and debunks them. Click to read on, the rebuttals, it will surprise you! 1. “eGift Cards will only cannibalize our existing gift card sales” 2. “Fraud in eGift Cards is too pervasive” 3. “Our IT department can build this internally” 4. “The technology is unproven” 5. “Customer adoption isn't there yet” 6. “New hardware will be required in all stores” If you are a retailer looking to “go digital” with your gift cards, Gift Card Partners can help with our RFP Management service. We embrace the tricky work of renegotiating existing vendor relationships, and help retailers implementing new relationships, with: card supplies, processors, payment systems providers, and more. >>Learn more about our Services Suite designed to improve your gift card program.
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