A new digital gift card from Moneris Solutions Corp. will have consumers’ wallets feeling a little lighter.
Moneris, a credit and debit card processor that also has plastic gift card program, has launched its Virtual Gift Card solution. Medium- to large-sized merchants can now integrate customized digital gift cards into their existing Moneris gift card program. The service will be expanded to smaller merchants later this year.
“Consumers are walking around with phones that become their life: they’re [people’s] schedules, their phone, their internet access, their wallet,” said Karen Cox, the company’s VP, payments and retail solutions. With the virtual gift cards, “you always have it with you, it’s stored, you don’t have to worry about where you put it, and there aren’t as many pieces of plastic in your physical wallet.”
Customers can buy the virtual gift cards on the merchants’ websites, choosing the denomination and an image. The gift cards are delivered via e-mail to the recipient who can then choose to store the card in an e-mail, on paper print-out or Passbook (the mobile app preloaded on Apple’s iPhone and iPod Touch). The customer online experience, gift program management and payment processing are all handled by Moneris.
Cox said a virtual gift card program is more cost-effective than a plastic one. And merchants can capitalize on seasonality right up to the last minute. Last-minute Christmas shoppers, for example, can buy virtual cards up until midnight on Dec. 24 and still make the Christmas deadline. “There are some powerful economic benefits, convenience and [the ability to] really cater to that mobile market,” said Cox.
While digital gift cards represent a small portion of the pre-paid card market, the segment is rapidly growing. In the U.S., CEB TowerGroup said virtual gift card volume will grow to $11 billion in 2014, up from $8 billion in 2013. The company said the e-gifting trend will help propel continued growth in the gift card market in excess of US$140 billion in sales by 2016.
A number of big players are entering the burgeoning e-gift card market. In July, Google updated its Google Wallet app to let consumers manage their gift cards and redeem them in stores.
Also last month, Amazon teamed up with Blackhawk Network, a prepaid and payments network. Using the new Amazon Wallet app, customers can store, redeem and check the balance of cards from numerous retailers and restaurants.
Closer to home, Victoria, B.C.-based startup Kiind.me lets people purchase digital gift cards from a handful of retailers including Gap, iTunes, Staples and The Home Depot. Credit cards aren’t charged until the gift card is used.
