Will Digital Gift Cards Drive Mobility?

By Matt Kerper, Vice President of Strategic Business Development

In August, I joined fellow gift card and prepaid commerce industry leaders to discuss gift cards and mobility at The Prepaid Press Expo in Las Vegas. The panel fueled some interesting conversations surrounding the future of mobile marketing in the retail industry, and what role prepaid commerce will come to play.

Will Digital Gift Cards Drive Mobility? | CashStar BlogThere was a general consensus that, while mobile wallets certainly offer new and interesting opportunities for retailers, they simply haven’t gained as much traction among consumers as originally predicted. Despite the buzz, shopping habits haven’t really dramatically changed. Consumers don’t feel compelled to use mobile payments, and often still reach for a physical wallet to use cash or a credit card at checkout.

One key driver in accelerating the widespread adoption of mobile wallets will be more ubiquitous acceptance at high frequency merchants such as gas stations, convenience and grocery stores as well coffee shops and other merchants where consumers are shopping every day or at least multiple times per week.

For example, if a retailer accepts Apple Pay but its shoppers only visit a couple of times per month or year, new consumer payment habits will not likely to be formed. However, at a high-frequency merchant like Starbucks, customers are much more enthusiastic about paying with their phones via the Starbucks mobile app because it syncs with the brand’s loyalty program, offers convenience and provides an incentive that customers can benefit from every day. As mobile wallets become accepted at more and more retailers and restaurants – and as they prove their value by saving consumers time, money and offering additional value added benefits – we’ll see an uptick in adoption at all retailers, from local boutiques to big box stores.

So where does prepaid commerce come into play?

Prepaid commerce is the perfect vessel for marketers looking to capitalize on mobile wallets. After all, simply offering the customer another way to pay isn’t exactly mind blowing. The payment portion of a mobile wallet is, or should be, the least important and interesting part for retail marketers. Instead of focusing on the payment functionality, retailers should view mobile wallets as a tool for marketing and engagement purposes. Here are just a few ways marketers can engage with shoppers through mobile wallets:

  • Beacons enable retailers to send offers to shoppers via a mobile wallet while they’re physically present in the store. By sending personalized offers that leverage prepaid-based incentives, like a digital gift card with purchase, they can tempt customers with a deal without having to discount merchandise.
  • Digital gift cards can be synced with mobile wallets and used on-the-go, providing a convenient way for consumers to store cards and track balances. Marketers can collect valuable data on customers who use digital gift cards on their mobile devices and gather insight into shopping behavior.
  • Loyalty programs are easily incorporated in mobile wallets. Whether you offer extra points, promotions or discounts to loyal shoppers, it provides the incentive consumers need to start using them more frequently.

Let’s not forget that retailers’ mobile apps can be mobile wallets of their own. It’s not just big names like Google Wallet and PayPal that are driving mobility – if your mobile app offers customers the ability to pay alongside your core app features, mobile payments will likely gain traction with fans of your brand. Starbucks and Sephora are excellent examples of retailers that have seen huge success by engaging consumers on their own mobile app.

Ultimately, my fellow panel members and I agreed that digital gift cards will drive mobility. But the industry should think beyond the term “gift”, as gift doesn’t encompass the numerous opportunities that prepaid commerce affords retailers. Retailers should implement a comprehensive prepaid commerce strategy, get more creative in their conversations with customers, and explore how to leverage mobile wallets as marketing and engagement tools.


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