The New Strategies Driving Digital Gift Cards The PaymentsJournal Podcast

Though most people still refer to prepaid products as gift cards, that term has almost become a misnomer in today’s payments industry. Prepaid cards do so much more than carry gifts—not just for consumers but also for issuers. Savvy businesses use them to drive more consumer spending while increasing brand loyalty. 







To that end, Fiserv recently worked with Javelin Strategy & Research on a survey of more than 500 buyers in the incentives area to find out what’s driving their purposes. The survey provided a jumping-off point for a recent PaymentsJournal podcast with Tom Niedbalski, Vice President, Global Sales and Partnerships at Fiserv, and Jordan Hirschfield, Director of Prepaid Advisory Services with Javelin Strategy & Research.





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The survey was conducted from the buyer’s perspective rather than that of the consumer. Javelin spoke with individuals who are buying incentives for purchasers of their brands, spanning a wide variety of companies, each with revenue of $20 million or more. Their responses provided an incisive look at what the benefits these buyers are seeking in an incentive. 







Seeing the Buyers’ Side







Javelin’s research has shown that loyalty programs and rebates are highly beneficial for building long-term relationships. This can have a significant impact on customer retention but can also improve the efficiency of onboarding new customers as well.  







“It’s expensive to acquire a new customer, but these incentives had a very material impact on lowering acquisition costs and subsequently on improving customer retention,” Hirschfield said. “With so many useful benefits of offering an incentive to a consumer, you can have a material impact on your bottom line.” 







Despite a reliance on physical gift cards, the shift to digital formats is going strong, consumers by and large prefer digital, and the research shows that the balance is continuing to shift that way.  On the buyer side, people are still purchasing incentives by going to physical stores and buying hundreds of gift cards. They don’t seem to realize they could be doing this through a relationship with a provider in an easier distribution model that can save on costs. 







On the consumer side as well, retail purchases remain popular. There’s an opportunity here to bring in a provider and transition those purchases to a digital distribution method. That can be easier for the buyer and can foster a positive ongoing relationship w...