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Blackhawk’s M&A move portends robust growth in digital gifting

Originally published by PaymentsSource on September 1, 2017.

Blackhawk’s $175 million acquisition of CashStar goes beyond synergies and vendor consolidation, demonstrating the often overlooked evolution of the prepaid gift market from display walls in stores to automated delivery across digital and social channels.

Blackhawk and CashStar have taken different paths to today’s point of convergence. While in the same business, Blackhawk Networks’ focus has been more on physical retail, having developed as a subsidiary of the Safeway grocery chain in 2001. CashStar, while offering physical gift cards, has historically focused on digital channels.

“While CashStar does digital and physical gift cards, our innovation and our pedigree is obviously oriented around digital.” said Ben Kaplan, CEO of CashStar. “In the case of Blackhawk, they have an amazing digital business but it is a fact that their origins, their history, that a significant component of their business remains an incredible sales distribution and marketing network in retail stores.”

The fusion of CashStar’s digital capabilities into Blackhawk Network is a logical progression given shifting consumer trends in shopping and gifting. “People love gift cards—and are increasingly interested in omnichannel options for buying, giving, and redeeming them. But consumers are also changing the ways they pay and shop, and as a result are transforming payments and commerce.” said Erin Wood, Vice Chair of the RGCA board of directors. “New mobile wallet capabilities, apps, egift, and other usage options are popping up all the time to adapt to these developments, and we don’t anticipate that changing.”

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