Gift cards are moving beyond retail and rewards programs—now, regulators are exploring how they can serve as an entry point into investing.

The use cases for gift cards have continued to expand, especially as prepaid products have become an integral component of many organizations’ loyalty and incentives programs.

The versatility of these solutions has prompted the Securities and Exchange Board of India (SEBI) to propose an innovative framework that leverages gift cards and prepaid instruments to attract new investors. Under this model, gift card recipients would be able to convert their balances into shares of a mutual fund.

SEBI has outline several parameters for this effort. For example, prepaid accounts would be funded exclusively through electronic funds transfers or via India’s popular UPI real-time payments system.

The regulator has also proposed a transaction cap at 50,000 rupees (roughly $537). While this may appear modest from an investment standpoint, it presents substantial long-term growth potential.

“The move in India authorizing the simple inclusion of prepaid cards to fund long-term investments highlights the power of giving, backed by the security of prepaid cards,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “By allowing prepaid to be used as a gifting vehicle for investments, India will enable opportunity for underrepresented communities to begin their investment journeys.”

More Than a Cash Equivalent

Fostering financial inclusion is another key objective of SEBI’s strategy. Prepaid solutions offer a compelling alternative to cash by enabling unbanked and underbanked individuals to participate in the digital economy. This is one of the reasons nonprofit organizations are increasingly adopting gift cards for aid distribution.

Among other benefits, digital gift cards offer immediate delivery and are trackable. Perhaps more importantly, they can be tailored for specific use cases, such as limited spending to select brands or approved categories—or enabling conversion into mutual fund shares.

From Gift to Long-Term Investment

All these benefits underscore why gift cards continue to evolve and find new applications. While India’s approach plan is noteworthy, it is far from an outlier.

“It should be noted that there are other great examples of similar use of prepaid vehicles for investment in other global markets,” Hirschfield said. “In the U.S., givers can fund a recipients 529 tax-advantaged education savings plans through organizations like Gift of College. Small gifts into these programs create opportunity for the recipient to grow those gifts into meaningful, long-term investments.”

The post India Floats Plan for Converting Gift Cards into Mutual Funds appeared first on PaymentsJournal.

The past holiday season didn’t just test consumer wallets—it revealed how dramatically shopping behavior is evolving. As inflation-weary shoppers searched for flexibility, value, and convenience, gift cards emerged as a central tool in how consumers planned, budgeted, and ultimately gifted. From promotion hunting to increased reliance on AI, the behaviors that defined the season are poised to shape retail for years to come.

In a recent PaymentsJournal podcast, Sarah Kositzke, Director of Research at Blackhawk Network (BHN) and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research discussed the accuracy of holiday shopping predictions, evolving consumer gift card habits, and how brands, retailers, and issuers can prepare for a dynamic year ahead.

Navigating Affordability Through Promotions

One of the most closely scrutinized aspects of the season was how consumers—under sustained pressure from inflation would approach holiday gifting. While BHN’s post-holiday research indicates that budgets were largely flat year-over-year, shoppers adopted new approaches to strategies to stretch their spending.

“This past holiday, we saw about 90% of people—that’s nearly everyone—leveraging some sort of a promotion, whether it was buy-one-get-ones or percentages off of certain products, or even gift cards,” Kositzke said. “I feel like a lot of people started earlier. They were looking for those deals, that’s what was a motivating factor for starting earlier.”

“One of the most interesting things, which we nodded to in pre-holiday work that we had done, is we said: ‘I think folks who start earlier in the season also have a larger budget for gifting.’ And we found that to be true, it was nearly double those who started later,” she said. “Factor in all the promotions, factor in looking for those deals—even if it was starting in October—that’s where we saw the crux of people finding that momentum to get out there and shop.”

This focus on finding discounts further entrenched Black Friday as the official kickoff to the holiday season. BHN found that 31% of respondents identified Black Friday as the leading promotional period, beating out Cyber Monday.

At the same time, more shoppers bought fewer gifts this holiday season. This shift was driven partly by economic concerns and partly by how consumers are prioritizing and managing their many gifting and holiday obligations.

“Gift exchanges are fascinating because, anecdotally, I see it happening a lot,” Hirschfield said. “We’ve put COVID behind us and now it’s like, let’s just get together, but let’s do it in a way that’s fun and interesting, And instead of spending $10 on everyone, you’re amplifying that budget into one item, but you’re doing it in a fun and social way.”

A Haven for Last-Minute Shoppers

Even though more consumers started shopping earlier, many stretched their budgets to the very end of the season. Nearly three-quarters of respondents purchased digital gift cards as a last-minute gift on Christmas Eve or Christmas Day.

“They really became a safe haven this holiday season,” Kositzke said. “We saw this last year and we predicted that this would be the case, but digital was such a key factor. We saw 80% of people purchase a digital card for that specific occasion.”

“Whether it’s, ‘Oh, no, I got to the event and I thought nobody was buying gifts, now suddenly everybody bought a gift and I’m feeling left out’ or ‘I missed somebody’ or ‘I’m suddenly going have a night out or a dinner with somebody and I want to be thoughtful and get them something,’ we saw an incredible amount of shift to those digital cards,” she said.

For retailers and brands, this trend heightens the importance of a strong digital gift card offering. Retailers should also promote digital gift cards heavily through Christmas Eve to capture last-minute shoppers.

While digital gift cards served as a lifeline for last-minute gifting, they can play a much larger role in merchants’ overall gift card strategies.

“For a long time, people said digital will replace physical, and I don’t believe that’s true,” Hirschfield said. “Timing is a key factor of why those choices are made. People may prefer to give a physical gift because they want that tactile experience that includes unwrapping something, and you can do that with a physical gift card.”

“But when time gets short or when distance is a factor, digital becomes the gift of choice,” he said. “It fills a need when you can’t be there in person or they’ve just run out at the store, or you can’t get to the store. We also see that impacts the value of these cards. From 2024 to 2025, physical card loads on average went up $11; digital went up $15. When you don’t have to package it, mail it, and all those costs involved, you can say ‘I can spend $4 or $5 more.’”

In addition to the shift toward digital, the value loaded onto both physical and digital gift cards continues to rise. The average total gift card value reached $236 last year, up from $209 in 2024. Beyond this initial spend, gift cards also present a meaningful opportunity for merchants once they reach the recipient.

“What’s interesting is the fact that then I’m going to take that card and I’m going to overspend at the place of purchase, whether it’s a restaurant, whether it’s a store, or whether it’s a service I’m getting done,” Kositzke said. “On average, people spent about $108 over the value of the cards that they received.”

“And people on average—so this has stayed the same—have received about three cards,” she said. “We’re not seeing a huge shift in the number of cards, which means the value of each is going up.”

Generational Gaps in Loyalty and AI

In addition to spending trends, one of the most closely watched aspects of this shopping season was the impact of artificial intelligence. While overall AI usage increased among all consumers, a growing generational divide is emerging: nearly three-quarters of younger consumers used AI for holiday shopping, compared to roughly 31% of older consumers.

What’s more, the number of Gen Z and millennial consumers using AI grew 8% year-over-year, compared to just 1% for Gen X and Baby Boomer shoppers. This overall rise in AI adoption is likely to have lasting effects.

“We saw a lot of people using it for looking for promotions, they’re looking for the best cost, or they’re looking to try to figure out the most creative gift ideas,” Kositzke said. “Especially if it’s somebody who they’ve been gifting to a long time and they just need some new fruitful ideas of, ‘What could I bring?’”

Understanding this growing preference for digital and AI-driven solutions is critical for merchants and gift card issuers seeking to develop deeper engagement with the new generation of consumers.

In addition to AI integration, younger consumers are increasing motivated by rewards and are willing to adjust their shopping behaviors to maximize value.

“The loyalty era is here,” Kositzke said. “People are looking to exchange any points that they have, wherever those programs might be for gifts. We found that younger consumers, about three-quarters, exchanged loyalty points for gifts, compared to 57% of older consumers.”

“What kind of gift did they exchange it for?” she said. “Almost half exchanged for gift cards, some exchanged for physical gifts, and about 10% exchanged for some sort of experience. So, loyalty points and programs can provide the gamut of what people are looking for, especially dependent upon who that end recipient is. It’s important to add these programs into any sort of messaging or ties that you have.”

Diversifying Marketing Channels

Another important consideration for merchants is the evolving array of channels through which consumers seek guidance and make purchases.

“Those traditional channels—whether it’s emails, word of mouth, maybe it’s a print in-store flyer—those are all still heavily leveraged,” Kositzke said. “However, we find that they’re more so leveraged by older generations. Nearly two-thirds are seeking those sources compared to only maybe about half of younger shoppers.”

“Younger people are looking for these promotional deals across their Cash Apps, any sort of shopping discount channels that they might be on,” she said. “There are some programs out there where you can input information about your purchases and you’re then earning power there as well, which goes back to that whole points and exchange for gift cards as part of a program.”

This diversity of channels makes it essential for merchants to diversify their marketing and promotional strategies. For example, retailers should expand their approach to include price comparison tools like Google Shopping and deal forums like Slickdeals and Reddit.

To stay relevant, merchants must also continually reevaluate the impact of social media channels.

“TikTok Shop is really driving purchases,” Hirschfield said. “In my N=1 study of my Gen Z daughter, the number of times I hear her mention TikTok Shop purchases for her or her friends, it’s really one of their main sources of purchases. My daughter is a freshman in college, there are 400 young women living in her dorm, and I guarantee you that she is not alone.”

“These are significant populations of people who are using things like TikTok Shop rather than a traditional retail outlet,” he said. “So, utilizing TikTok and things like that where these younger generations are gathering to be influenced to find deals, it’s a meaningful driver of business and you have to be hyper-aware of what’s next—beyond what you might be comfortable with for the people who are making these business decisions.”

Watching Your Consumer

In addition to these impactful consumer trends, gift cards remain a dominant choice. Last year, roughly 65% of employees received a gift from their employer, and nearly nine out of 10 of these gifts were gift cards.

This highlights the increasing prevalence of gift cards—not just during the holidays. Leveraging promotions, integrating AI, bolstering loyalty programs, and diversifying marketing efforts are all critical lessons from the holiday season that can be applied year-round.

“What I would say is, going into 2026, really watch where your consumer is,” Kositzke said. “Watch where they’re researching, watch the way in which they’re speaking to AI about what it is that they’re looking for, and find a way to be present. We talked about TikTok, YouTube, Cash App, and all these different sites. It’s making sure you’re staying relevant where the consumer is, that’s going to be very important in 2026.”

To learn more, check out BHN’s 2025 post-holiday gift card report infographic, How holiday shoppers adapted to affordability challenges. Just click here.

The post The Gift Card Shift: From Convenience to Core Shopping Strategy appeared first on PaymentsJournal.

As National Use Your Gift Card Day approaches, many retailers are developing strategies to encourage consumers to spend the unredeemed gift cards they received over the holidays.

The spending power significant: U.S. consumers are estimated to be holding roughly $23 billion in unused prepaid cards. This latest demand, combined with traditionally slower January sales, led to the creation of National Use Your Gift Card Day seven years ago.

“Gift cards fill a need that no other gift can give, and that means that a lot of U.S. consumers are sitting on gift cards they got in the past month from the holidays,” said Jordan Hirschfield, Director of Prepaid Javelin Strategy & Research. “Most of those are probably retailer-specific, but you have some open-loop gift cards too, and both need redemption.”

“It’s always the most popular gift both as a recipient and to give, but givers generally prefer those retail, single-vendor gift cards because it seems a little more personal, even though recipients marginally prefer the Visa, Mastercard, or American Express open-loop cards,” he said.

Preparing for Repeat Customers

Encouraging consumers to use their gift cards can deliver dramatic benefits for merchants. According to Javelin, over two-thirds of consumers received a gift card this holiday season, and roughly a quarter of those cards carry higher balances than the previous year.

“That means retailers that are preparing to accept those gift cards should be ready,” Hirschfield said. “The date of January 17 makes sense because the majority of recipients of gift cards will use them within a month. Not only will they spend it within a month, they will spend more than the value of that card. For retailers, if it’s a $50 gift card and they’re spending $75, you’re getting uplift of spend that maybe they weren’t intending to buy, and they’re buying more profitable items.”

Beyond the immediate revenue opportunity, gift card redemption gives merchants a chance to build long-term customer relationships.

“Roughly half will become a repeat customer of that brand when they get a gift card and they use it,” Hirschfield said. “Four out of 10 will join the loyalty program; another four out of 10 will download that app. Especially when you think about popular gifts that people getting as gift cards—quick-serve and fast food, coffee shops, mass retailers like your Walmarts and Amazons—all those have easy to utilize and frequently utilized apps.”

“You can incentivize people by offering a bonus or different things like that,” he said. “But they’re going to download that app, and about 20% are going to refer that retailer to another friend or family.”

The Redemption Pattern

All these benefits stem from the simple act of receiving a holiday gift card. Although many retailers focus heavily on driving gift card purchases, redemption is often even more critical, because it represents a self-use choice.

For merchants, National Use Your Gift Card Day can provide a valuable lift during an otherwise slow first quarter. However, effective prepaid strategies should stretch far further than a single day.

“We have Father’s Day, Mother’s Day, and graduation—all the May and June holidays,” Hirschfield said. “Birthdays are the number one reason people get gift cards, and birthdays happen 365 days a year—366 some years. You’ve got thank you gifts, house warmings, religious occasions, births, weddings, and all these things.”

“Valentine’s Day is coming up and people don’t think that it’s a great gift card occasion, but I might send my kids $10 to show them I care about them while they’re off at college,” he said. “These are all micro-events that will not top the fourth-quarter explosion of sales, but all are additive. How the redemption pattern went in January is critical to how the redemption pattern will go all year round.”

The post The Best Time for Consumers to Spend Holiday Gift Cards? Now appeared first on PaymentsJournal.

In the post-COVID era of remote work, organizations often struggle to find meaningful ways to recognize their top performers. In-person celebrations are not always possible, and traditional physical gifts can sometimes feel impersonal or difficult to deliver effectively.

In this context, digital gifting platforms have risen dramatically as a powerful tool to celebrate achievements, boost morale, and drive sales performance. Beyond their versatility, digital gift cards also provide several behind-the-scenes benefits—from streamlining the gifting process to offering measurable insights into their impact.

“If you have a dispersed and virtual workforce, clearly a digital gift card’s going to be the best option,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “There’s no mailing, but even though everyone is in separate locations, it can be sent automatically and systematically to arrive at the same time.”

Immediate Rewards

Only around one in five employees receives any type of incentive, even though research published by the National Library of Medicine confirms that immediate rewards have the strongest motivational effects on employees.

“That immediate reward really makes people feel good,” said Hirschfield. “You can go out and treat yourself to something because you hit a goal.”

Organizations that have implemented digital gift cards have discovered a wide range of strategic uses that support various aspects of the business. When used as incentives for sales teams, rewards can be tied to specific results, such as closing a deal or meeting quotas. Additionally, digital gift cards generate analytics that can inform future incentive and rewards planning.

These cards can also recognize achievements of all kinds, from birthdays to sales milestones to team accomplishments. Immediate, on-the-spot rewards help boost employee satisfaction, enhance retention, and strengthen an organization’s competitive culture. According to research from Javelin, 83% of prepaid card recipients report that incentives increase their satisfaction—particularly in remote work environments where teams cannot celebrate successes together in person.

“Even though the long-term effects of COVID from a business standpoint are starting to fade, the learnings we had and the tools that were developed are going to stay,” said Hirschfield. “COVID accelerated the development of some of these tools, and now the industry can run with it for long-term gain, not just their immediate short-term needs.”

Behind-the-Scenes Benefits

Efficient and easy to use, these digital gift cards offer a wide range of operational benefits. They can support everything from individual or small team incentives to large-scale rewards programs. Flexible delivery options allow organizations to schedule cards well in advance for milestones, birthdays, or link them to KPIs for performance-based bonuses. Moreover, they can be personalized for each employee, reflecting their accomplishments and providing rewards tailored to their preference.

“You might have a wellness program where if a person hits their 10,000 steps, they get a $5 credit,” said Hirschfield. “It also allows a recipient to select the gift cards they want. Electronic delivery is the best way to provide those multiple options, so they can go through the catalog of choices and choose the one that suits them the best.”

Organization can also customize these gift cards with their own branding at a lower cost than personalizing physical cards. This includes adding company logos, colors, fonts, and word marks. Some advanced providers, such as Prezzee, even allow the inclusion of video messages to enhance the personalization.

Distribution is straightforward, even for large or widely dispersed teams. For department- or organization-wide programs, cards can be bulk-sent via CSV upload. Unlike store-bought gift cards, which are increasing subject to tampering and fraud, digital gift cards remain secure and reliable.

On the back end, digital gift cards provide measurable impact in ways that traditional rewards can’t. They offer real-time tracking of redemptions, giving HR departments a way to ensure cards are being used as intended. Their performance can also to the performance of the rewarded employees, allowing management to assess their effect on sales and overall performance.

Advantages for Issuers

There are benefits for issuers as well. Employees who receive an incentive are more likely to try a new brand or sign up for a loyalty program. If a recipient becomes a member of a rewards community, that the incentive shifts from being a one-time tool that serves the employer’s needs into a long-term benefit that strengthens the relationship between the employee and the card issuer.

An experienced digital gift card partner like Prezzee  can help an employer address all these needs. A trusted expert can manage the various elements of these incentive programs, which have the potential to transform an organization’s workforce.

“Not only are the employees more satisfied, but they are more likely to be an advocate for their employer if they feel like they are being treated well,” said Hirschfield. “These are really simple tools that have big-time payoff.”

The post Present and Accounted For: Digital Gift Cards in Incentive Programs appeared first on PaymentsJournal.

Roughly $23 billion in gift cards go unused in the U.S. after the holiday season, and consumers now have more options for spending this unexpected windfall.

Gift cards have become a top choice for shoppers, offering a personal touch from the giver while letting recipients select exactly what they want. This prepaid trend fueled significant holiday spending—according to data from National Use Your Gift Card Day—U.S. shoppers were projected to spend around $29 billion on prepaid cards.

In this gift card frenzy, there is always a chance that a card ends up tucked away at the bottom of a drawer or a purse, waiting to be rediscovered.

“While Javelin research shows that the majority of consumers will use their gift cards quickly and in full, there will always be a small segment that sit on their card values,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “We are seeing positive trends for retailers who are able to digitize their physical cards which enables easier ongoing redemptions and potential reloads.”

Donating the Balance

Another emerging prepaid trend is the use of gift cards for charitable donations. When consumer don’t want to shop at the retailer on a branded card—or still have an unused balance—they can donate the funds to charitable organizations such as St. Jude Children’s Research Hospital, GiftCards4Change, or Donate Your Card.

“A key fact is that donations do not need to just be with currencies,” Hirschfield said. “Gift cards act as a currency replacement and can be incredibly useful to organizations of all types and also retain the tax benefits of a donation.”

Beyond donation acceptance, gift cards have become a pivotal part of many nonprofit disbursement operations. These organizations often rely on manual processes and traditional payment methods like paper checks. Conversely, gift cards are faster to deliver, can be digital or physical, and put purchasing power directly into the hands of those in need.

Self-Use Synergy

Aside from the benefits for nonprofits, organizations of all types are beefing up their prepaid programs. Gift cards and stored-value accounts—such as the balances shoppers keep at Starbucks or Amazon—can integrate seamlessly with loyalty and engagement programs.

This highlights one of the most important trends in prepaid: the increasing frequency of self-use. This trend is likely to continue growing as consumers have more options to buy and spend gift cards, potentially reducing the number of unused balances.

The post Unused Gift Card Balances Surge After Holiday Season appeared first on PaymentsJournal.

Some shoppers have purchased gift cards, loaded the balances, and later discovered that the funds disappeared before the intended recipient ever used them. This scenario is often the result of gift card draining scams, in which bad actors steal gift card data or tamper with cards before returning them to store displays.

Once a consumer activates and loads a compromised cards, a bot alerts the criminals, who immediately drain the funds.

These scams escalated enough to draw the attention of the Department of Homeland Security (DHS) last year. Their investigation revealed that many of these operations are run by large overseas threat actor groups, which have collectively reportedly cost U.S. consumers more than $1 billion over the past two years.

Working to Curtail

Because gift card draining networks pose substantial risks, many organizations have moved to create defenses against this scam.

“These sophisticated crime networks have tried to find a vulnerability in the card supply chain, but it should be noted that industry and regulatory bodies are working to curtail these activities,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research.

“Major brands and their card and security partners have continually strengthened their packaging to show signs of tampering, as well as other security measures—such as to use tamper-evident seals and labels over key card information,” he said.

Gift Card Awareness

Consumer education is a critical part of fraud prevention, and informing customers about gift card scams is especially important as the holiday season approaches. Gift cards have become popular holiday gifts because they give recipients the flexibility to choose something they really want.

To ensure their gift stays secure, consumers can take a few simple steps to protect themselves this season.

“If a consumer is choosing a card off a display and not in tamper-proof packaging, they should browse several cards and ensure that the labels covering the account numbers are identical,” Hirschfield said. “These labels are generally difficult to reproduce if removed.”

Although gift card purchases may require a heightened awareness, the threat shouldn’t be blown out of proportion.

“Consumers should feel safe buying gift cards,” Hirschfield said. “While these crimes do occur and shouldn’t be minimized, Javelin research shows that very few consumers have ever purchased a gift card that was skimmed.”

The post Gift Card Draining Fraud Could Diminish Holiday Cheer appeared first on PaymentsJournal.

Consumers are loading account balances, whether to buy a cup of coffee or to purchase a toll pass. Although a gift card may be the traditional form factor of prepaid products, these stored-value accounts are essentially a gift card purchased for self-use. This concept is revolutionizing the prepaid industry.

As Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, detailed in the 22nd Annual U.S. Closed-Loop Prepaid Card Market Forecast, 2025-2029 report, the trend toward stored-value accounts is not the only factor driving the rapid growth of prepaid products. New segments and use cases are emerging that will drive consumers and businesses to load balances for years to come.

Thriving Amid Uncertainty

One of the chief recent concerns with prepaid, and payments at large, has been that economic conditions could affect consumer spending. However, the prepaid market has continued to thrive amid high inflation and interest rates. This is partly because prepaid products afford a modicum of security in trying times.

“I think where gift cards come in is they give you some certainty,” Hirschfield said. “When you look at incentives—be it consumer incentives, where you’re getting them either for participating in research or as a rebate for buying tires—those incentives come in handy because they are providing you something that these companies know you want and maybe you can add to your budget a little bit.

“It’s the same thing with employer incentives, where if the employer can say, ‘Hey, you did a great job, here’s $25 for coffee,’ that’s a great growth market. To employers, it’s $25 regardless—inflation doesn’t play into the amount they’re going to spend—and it amplifies the spending power for that end user.”

In addition to spending certainty, other economic factors are keeping the prepaid landscape robust. For example, the recent drive for employees to return to work has increased the usage of prepaid products in toll payments.

“People are back in their cars; they are going to the office on a more regular basis,” Hirschfield said. “You’re seeing highway traffic pick up, you’re seeing toll traffic pick up, and tolls have become almost entirely closed-loop. The idea of a tollbooth is essentially nonexistent at this point. It’s all electrically metered—they have the devices in your cars or other options—but that’s creating a significant growth market for the management of those stored-value accounts.”

An Umbrella Product

Prepaid use in toll payments underscores another important trend: self-use. As more merchants and prepaid providers identify this preference, the stored-value trend could significantly affect the retail experience.

“I don’t want to say gift card is a bad term, but we’re expanding the term from gift cards to stored value because you’re seeing a whole lot of self-use,” Hirschfield said. “We’re in holiday season now; it’s all about gifts, and that’s great. But when you get to January, it’s redeeming those gifts. How do you get people to refresh the balance on that gift card or make it change from a gift card to what is now a self-use stored-value account? That’s driving a lot of the growth.”

Another factor driving this trend is the emergence of digital payments, and digital gift cards have similarly surged in popularity. Due to this success, there has been speculation that one of the hallmarks of prepaid, the physical gift card, could be declining.

However, physical cards remain in strong demand, as many givers feel it adds a more personal touch. Additionally, many consumers still need or prefer to pay with a physical card.

What users increasingly desire is flexibility. For example, they may purchase a physical card, but they still want the capability to digitize it or easily reload balances online.

“It’s one umbrella product with multiple form factors,” Hirschfield said. “The stored-value account is the product, and the form factors are a physical card or your wallet on your phone or maybe even on your computer. Those are the areas that are helping to drive a lot of that growth.”

Betting on Prepaid

Within the overall growth trend of the prepaid market, certain closed-loop products are experiencing demonstrable growth. One of the standout segments is digital gaming and gambling, which has experienced double-digit growth in the past few years. However, this surge likely isn’t sustainable.

“It will slow slightly because we’re starting to get to critical mass in terms of legislative approval,” Hirschfield said. “I believe Missouri might be the only new state adding digital gambling this year. That puts us in the 30s, but we’re to a critical mass. In certain states, it’s going to be a tough path to ever get it passed, but the market is growing partly because you just keep getting more legislative freedom to do it.”

Some of the luster around the nascent gambling sector has been tarnished by recent betting scandals across the NBA, MLB, and other professional sports organizations. However, Hirschfield expects any blowback from these scandals to be short-lived unless game manipulation is exposed on a massive scale.

There could be restrictions imposed on the sector, either by lawmakers or sports leagues. While these moves may cap betting amounts or limit certain types of bets, they are unlikely to significantly affect the gaming and gambling market.

“It’s incredibly accessible to the players because it’s on your phone or your computer,” Hirschfield said. “It’s store $25 bucks at a time, and there’s a lot of incentive play as well. You upload $20 and they might give you $20, or if you win your first bet, you might get $100 in play money.

“They understand how you engender loyalty with rewards and with loyalty points to say, ‘Use my platform, not someone else’s.’ It’s a fascinating market. We’ve just started covering it last year, and we’re going to continue to cover more as it matures.”

Taking a Step Back

While some prepaid segments are surging, others are taking a step back. Some of these downtrends, such as in prepaid petroleum or telecom cards, are long-term trends driven by shifting consumer preferences.

Conversely, prepaid transit passes are a strong market now but could be due for a cooldown.

“I think it’s going to shrink overall because the market is moving away from getting your transit pass loaded up with however many rides or dollars,” Hirschfield said. “It’s moving to true tap-to-pay where you tap your debit or credit card and walk in the gate. That’s one where you’re going to continue to see some movement from prepaid to postpaid in the next five years.”

One of the most important segments that could experience turbulence is nutritional assistance. Although programs like SNAP had short-term funding issues during the recent U.S. government shutdown, these programs could face longer-term challenges.

“Recent legislation has started to gut nutritional assistance, so that’s one fairly large load-value area that is definitely going to struggle, and it could end up fully declining,” Hirschfield said. “We haven’t predicted that yet because we need to see over time, but nutritional assistance is the big alert right now.

“If there are electoral changes, you could start to see some of that money getting clawed back, but it’s too soon to tell. It’s going to be an interesting one to watch because it’s critical and it’s got a mature network surrounding it from a closed-loop provider perspective—but it’s dependent on government funding.”

A True Relationship Builder

Despite these areas of concern, the functionality of prepaid payments and their ever-widening scope means the sector will continue its upward trajectory in the next few years. More than ever, an industry that had largely been associated with birthday or holiday gifts has become an all-year product.

Accordingly, retailers and gift card providers should view a gift card purchase as the first step in a long-term customer relationship. As more organizations leverage this model,  more use cases and greater utility will emerge.

“I don’t see any stopping growth in all the different form factors of stored value, be it individual consumer purchases—which is in-store and digital gifting—or your consumer and employee incentives,” Hirschfield said. “Those are all on a true continued growth plan because they are so tied in with loyalty and rewards and your phone and all the things that make it a deep and true relationship builder.”

The post How Stored-Value Accounts Are the Next Iteration of Prepaid Payments appeared first on PaymentsJournal.

Once a humble piece of plastic tied to a single merchant, gift cards have evolved into flexible ecosystems that sit at the forefront of many brands. A major driver of this transformation has been digital gift cards, which have reshaped the way the industry views prepaid products.

Today, gift cards are not only central to loyalty programs and employee engagement efforts but also remain consumers’ go-to choice for gifting. Yet, the evolution of the gift card industry is far from over. In fact, 2026 is shaping up to be a pivotal year for sustaining the continued momentum of this dynamic market.

A Level of Stability

One of the challenges shoppers face is a macroeconomic environment where inflation and interest rates have tightened budgets and increased credit card debt. As a result, many consumers are becoming more tactical in their shopping and payment decisions.

“With the macroeconomic environment, gift cards offer a sense of stability,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy and Research. “They are—and broader than the term gift cards—stored value, the ability to have that money that’s either budgeted out or stable. The price of an item can change, but the value of that gift card is going to be the same, so that really creates a level of stability.”

Beyond economic conditions, another driver of growth is the rise of e-commerce and the adoption of digital payment methods. This trend has fueled widespread use of mobile wallets and stored-value accounts across retailers of all sizes.

Additionally, there has been a substantial increase in the corporate use of gift cards. More employers are incorporating prepaid products into their employee appreciation programs, offering gift cards as bonuses, holiday gifts, or rewards.

Prepaid rewards can make a meaningful impact with employees for the same reason gift cards have become the most popular gift overall: they provide the recipient with the flexibility to choose what they truly want.

What’s more, gift cards have also become a common way for consumers to treat themselves.

“When I talk about stored value—and this goes to really the umbrella over everything—it’s that shift in mentality from gift cards and gifting to self-use,” Hirschfield said. “Self-use is on the rise due to things like incentives, which is I’m going to take advantage of a consumer offer. I might buy my tires because I’m getting a $100 gift card back, and that’s a self-use choice.”

Loading Up the Account

The evolution of the gift card industry—particularly the rise of stored-value accounts with self-use potential—is impacting consumer behavior, even when shoppers may not fully realize it.

“Often, people don’t put loading up their account for their favorite coffee shop or fast-food restaurant in the gift card bucket,” Hirschfield said. “Food services is big into this because when you’re giving your kids a budget where, ‘You want to go get your chicken sandwich and your milkshake, here’s how much you get a month,’ and it’s all in their stored-value account, that is all in the realm of what has been considered gift cards.”

“It’s moving to stored value, and that hits at that self-use motivation and it all ties into things that affect behaviors,” he said. “It affects reward behavior and loyalty behavior. The more loyalty points I get, the more rewards I get, the more I can take a part in that and maybe get that extra free item.”

These loyalty-driven features boost engagement, as many consumers are first introduced to new brands through gift cards. Additionally, recipients often sign up for loyalty programs and maintain ongoing interactions with an issuing organization after using a gift card.

Perhaps more importantly, consumers frequently use gift cards to make larger purchases, spending beyond the card’s initial value.

All these factors are not only influencing consumer behavior but also transforming how organizations approach and leverage gift cards.

“Companies were working to say, ‘We’ll get a little bit of breakage, we’ll take those pennies that are left over and we’ll count that as revenue.’” Hirschfield said. “That’s not the target of the gift card industry anymore. Now it’s reload, it’s consistent turnover of that money and reload of that money to increase volume and increase spend, those are the important things.”

The Digital Paradigm

Another factor shifting the perception of gift cards is the rise of digital gift cards. While some buyers may still prefer a physical card for certain occasions, digital gift cards are gaining popularity for several reasons.

First, digital gift cards are more convenient to purchase and use. They can be sent instantly via email, text, or other platforms, making them easy to give and receive.

They also offer greater flexibility because they can be integrated with mobile wallets and used either in-store or online. In addition, they allow for personalization, with options to include messages, themes, music, or videos.

Digital gift cards also give consumers more control. Users can swap, split, and manage balances across multiple brands in real-time, all while benefiting from enhanced security features.

Overall, digital gift cards present a powerful opportunity for businesses to build stronger, longer-term relationships with their customers.

“When that account is tied to you, you can check your balance,” Hirschfield said. “But also, it ties into that data collection opportunity where it’s mutually beneficial in loyalty and rewards. It’s making sure that you’re getting the items that you want. ‘Hey, would you like to repeat your order, and would you like to use your gift card balance to pay for that?’ Those are all things that come from that digital.”

Understanding the Value Chain

The shift in consumer preferences, coupled with advances in technology, suggests that digital gift cards are poised to capture a larger share of the gift card market next year. At the same time, the broader prepaid market continues to experience strong growth.

“Growth is really strong, we have it at 7.5% to 8% compounded growth rate—others in the industry have very similar numbers—and that leaves a lot of opportunity to go beyond that,” Hirschfield said. “Some segments of the industry are shrinking, some are growing, but it’s really a matter of understanding where you sit in that value chain of gifting versus self-use.”

Once brands understand how to strategically leverage digital gift cards, they will look to companies like Prezzee, which are driving the shift toward a more digital experience.

“To me, it’s about understanding that marketplace of who the user is and who the buyer is,” Hirschfield said. “In the end, everyone’s a self-user when they get the card, but how do you load that value is the first step in understanding that. That—to me—is a driving trend of 2026.”

The post How the Gift Card Revolution Will Accelerate Next Year appeared first on PaymentsJournal.

Gift cards have evolved from being a thoughtful, last-minute birthday gift into a mature industry that’s helping companies build loyalty both inside and outside their organizations. Their use cases are expanding rapidly, offering innovative ways for business to not only reward employees but also strengthen their bottom line.

In a PaymentsJournal Podcast, Samara Swenson, U.S. Senior Marketing Manager at Prezzee, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed how businesses can tap into this dynamic new landscape for prepaid cards.

A Strong and Growing Market

According to Javelin, the prepaid market was worth more than $300 billion in 2024 and is expected to grow over 8% annually over the next five years. That figure reflects just the closed loop segment; the open loop side adds an additional $40 to $50 billion, with a similar expected growth rate. Altogether, the industry is projected to reach at least $500 billion by the end of the decade.

The B2B segments that Prezzee specializes in are also gaining strength. They account for roughly 15% of the total market, with a comparable 7% to 8% compounded growth rate. Crucially, the B2B segment could expand beyond the current projections as more companies adopt the emerging use cases that are taking shape.

Aligning Objectives

A full-service gift card program can help organizations align their gifting strategies with specific business objectives, whether that’s employee recognition, customer acquisition, loyalty programs, or incentivizing sales teams.

Each objective requires a slightly different approach. For example, for employee engagement, HR leaders can offer highly personalized and meaningful rewards that recognize key milestones, accomplishments, and contributions. For customer acquisition, a prepaid program enables marketing leaders to execute impactful promotions, referral programs, and loyalty initiatives. Sales leaders can use gift cards to motivate teams and reward performance, ultimately driving higher productivity and sales outcomes.

New Frontiers in Employee Incentives

One of the key areas where gift cards are already very popular is employee incentives. Gifting employees helps them feel recognized and appreciated, and companies that do this often see increased motivation, loyalty, and overall productivity.

“What many organizations might not realize is that this positive internal atmosphere naturally extends outward,” said Swenson. “Engaged employees are often a company’s best advocate, allowing companies to channel this energy into external marketing campaigns, customer facing initiatives and sales programs.”

Javelin is also beginning to track how many people receive sales incentive through a prepaid program, and early data is showing strong signs of growth.

“That’s been a bit untouched in employee incentives, but there are so many great opportunities to go multimodal—maybe have some that is cash, some that might be stock, but also an immediate reward. ‘Hey, you can go out and treat yourself to something because you hit a goal,’” Hirschfield said.

“It’s not like you’re sitting and waiting,” he said. “You don’t have to do anything except load it in your wallet or go to a store and say, ‘I’m going to use that.’”

Employees who receive incentives are generally happier with their employer. But beyond supporting loyalty at work, card issuers have found that gift cards also foster loyalty among recipients. Javelin data shows that consumers who receive a gift card are more likely to join loyalty programs, become repeat visitors, and even advocate for the brand to friends and family. As a result, these incentives go beyond providing an immediate reward—they can spark long-term relationships.

Digital vs. Physical Cards

As an electronic gift card platform, Prezzee offers plastic-free gift cards that help companies reduce their environmental footprint, supporting broader corporate ESG commitments. By replacing traditional plastic cards with digital alternatives, businesses can cut plastic waste while signaling their dedication to sustainability.

Hirschfield anticipates that digital and physical gift cards will reach an equilibrium by the end of the decade, with a roughly 50/50 split in volume. Gifting is likely to remain popular in physical form, as people often value the tangible experience and gratification of opening a present.

“When you have that ability to provide immediate access, you look at employers and employees, especially when they are remote,” said Hirschfield. “A lot of times, the person giving that reward is not sitting with them. That’s where digital factors thrive.”

Solving for Unused Balances

One emerging and valuable benefit thatPrezzee offers is the ability for businesses to reclaim any unused or unactivated gift card balances, ensuring that no budget goes to waste. Unlike traditional providers, companies only pay for activated gift cards and can also set expiration dates to encourage timely redemption.

“From a broad perspective, unused funds (tend to accumulate) at what I call the edges of the value: either at full value or down to the last pennies on the card,” said Hirschfield. “These are mostly the scenarios where someone just forgets to use their card. When you eliminate that fully unused portion, you can provide better bang for the buck for that incentive provider and reduce those pressures on the brand. You don’t have that excess liability on the back end.”

Prezzee also provides reporting and analysis tools, enabling businesses to track gift card usage and redemption rates. This data allows companies to continuously refine their strategies, reallocating funds to maximize impact. The combination of transparency and flexibility ensures that every dollar invested in gifting delivers tangible results and measurable returns.

“We’ve seen some truly innovative and impactful applications,” said Swenson. “In emergency response situations, Prezzee has enabled organizations to rapidly distribute funds directly to those affected by crisis. Following natural disasters, our partners have provided essential resources to communities within 24 hours.

The post From Gift to Growth Engine: Exploring the Gift Card Evolution appeared first on PaymentsJournal.

Gift cards are the go-to gift when you’re out of time, out of ideas, or just want to keep it simple. But what actually drives people to buy them? New data shows that while holidays and birthdays remain the most common reasons, other occasions—from graduations to “just because” moments—are nearly as popular. In fact, gift card spending trends reveal a lot about how we celebrate, how we show appreciation, and how we avoid picking the wrong size.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Javelin Strategy & Research’s Report: 2025 Prepaid Holiday Preview: Gift Cards Could Provide Safe Harbor

Percent of People Who Definitely Buy Gift Cards by Occasion

• 59% – Graduation
• 52% – Holidays
• 52% – Valentine’s Day
• 50% – Birthday
• 46% – Just Because
• 40% – Mother’s Day / Father’s Day

Source: Javelin Strategy & Research

About Report

Holiday retail forecasts for 2025 remain uncertain, with tariffs and ongoing economic volatility casting a shadow over consumer spending. Despite strong performance in the 2024 season, retailers are entering the new year with mixed expectations. Planning for the end-of-year rush is already underway, even as summer temperatures linger. Economic shifts in early 2025 could lead to unpredictable consumer behavior, including delayed or last-minute purchasing decisions. These shifts may ultimately favor the gift card market, as shoppers lean into flexible, future-facing gift options instead of physical goods—especially in an environment with fewer discounts and tighter budgets. The full gift card supply chain—from issuers and retailers to digital wallet providers—will need to be agile and ready to capture demand as it evolves.

Gift cards remain a consistently favored choice among both givers and recipients, across both open-loop and closed-loop formats. According to Javelin’s findings, the opportunity to position gift cards as a smarter alternative to tangible presents—or even competing card options—is still strong. Long-term success depends not only on the initial sale but also on the post-purchase experience. To build loyalty and brand affinity, gift card programs must deliver an engaging experience for the recipient that feels personal and rewarding.

The post Which Events Drive the Most Gift Card Purchases? appeared first on PaymentsJournal.

For the 18th year running, gift cards topped wish lists as the most requested holiday present—solidifying their role as a cornerstone of seasonal giving¹. With more occasions to gift than ever before, demand is surging, and retailers can’t afford to miss the opportunity.

Insights from the 2025 Best Digital Gift Card Programs, Consumer Experience Benchmark Report, conducted by NAPCO research in partnership with Blackhawk Network (BHN), look at the trends behind this booming market, exploring who’s buying and why, and the retailers that are staying ahead of the curve. In this PaymentsJournal Podcast, BHN’s Sarah Kositzke, Global Research Lead and Hilary Spidaliere, Director of Product Marketing, as well as Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research discussed what leading brands are doing to keep their gift cards front and center with consumers—and how they’re using them as a powerful growth engine for their businesses.

The Gift Card Opportunity

By 2028, the gift card market is projected to hit roughly $267.3 billion, with the digital gift card segment expected to soar to $115.3 billion. Clearly, gift cards have evolved far beyond a holiday-only trend. Consumers are now snapping them up year-round, taking advantage of promotions, loyalty points, and rewards. When brands create loyalty programs that benefit both the buyer and the user, they transform gift cards into a 365-day opportunity for customer engagement.

Kositzke shared that while nearly every type of buyer purchases gift cards, the buyer demographic tends to skew male, with a strong presence among Gen Z and millennials. The findings also show that gift card purchases are more common among married individuals, or individuals in a relationship, with children at home, as well as Gen Z and millennials.

Physical cards still account for the majority of purchases, but it’s worth noting that nearly half of consumers are also buying digital gift cards.  

Research from this past holiday season shows that consumers received an average of about three gift cards, with a total combined value of just over $200. When the recipient isn’t nearby, digital cards are often the preferred choice. The report also found that nearly half of all gift card buyers are opting for digital formats, which are increasingly popular for smaller purchases.

“We are seeing more of what you might call micro gifting,” Spidaliere said. “Especially as more people are remote or hybrid or have friends and family across the country, you may want to send $5 to say thinking of you or congratulating them.”

Thinking about where consumers are buying their gift cards, Physical retailers who sell multiple gift card brands remain the leading point of purchase, closely followed by the brand’s own physical stores. However, there is one generational exception: among the youngest respondents—particularly Gen Z and Gen Alpha—physical stores are the clear favorite.

When it comes to digital gift cards, “We’ve seen a lot of parents who would prefer that their kids didn’t overcharge their credit card,” added Kositzke. “That lends itself to a digital platform, because the kids just want to be able to use the card online, whether it’s gaming or shopping or whatever it might be.”

When shopping for others, the average buyer purchases around four gift cards—typically one of which is digital. However, when buying gift cards for themselves, consumers choose digital formats more frequently, with two out of four being digital.

“I think that’s a really good indicator of the progression of the market,” said Hirschfield. “It was 70% physical a couple years ago, but we’re converging on this long lasting 50/50 equilibrium between digital and physical.”

About the Research

For the latest BHN survey, NAPCO research evaluated 100 U.S. merchants across 17 industries, including department stores, fashion, entertainment, home improvement, consumer electronics, and convenience stores. The study assessed more than 120 criteria, focusing on areas such as discoverability, purchaser flexibility, faceplate design options, and payment options.

Spidaliare noted that the research expanded to include the ability to send an e-gift card via messaging apps or text, in addition to evaluating the purchasing experience via email. While email remains the primary channel for driving engagement, shifting demographics suggest that may not last. Reaching audiences in the right format is becoming increasingly important, especially for those who are unlikely to open emails—or may not even use email at all. These consumers want to discover gifts quickly, whether they’re scrolling through text messages or browsing on social media.

“We see a lot of growth right now in SMS delivery and also direct into merchant app delivery, different ways of getting the gifts into their hands that are most accessible to that recipient,” said Hirschfield. “Some of that is about training the giver on how to get the card to the recipient in the best form factor. We’re seeing movement there, and I think it’s going to continue on a pretty rapid pace.”

Brand’s Own Gift Card: 2025 Results

Staples secured the top spot this year, followed by Amazon, while Best Buy, Sephora, and Target tied for third place. Staples expanded the reach of its B2B program and increased availability across several credit card rewards programs.

“Staples had great discoverability,” said Kositzke. “Across all different devices—on a desktop, in mobile apps and on the mobile web—we were able to find the Staples cards very easily. They had an excellent mobile experience and purchase flexibility, and just an enjoyable recipient experience.”

The top ten brands in the report generally ran more gift card promotions and explored new ways to amplify both brand and merchant visibility. One of the most notable areas of improvement was mobile web usage. Leading brands made it easier for consumers to find gift cards through their apps and provided multiple options for sending them.

“All of the top ten got high scores for their app experience,” said Spidaliere. “All ten had an app with their gift card program included there. Your most loyal customers are your app users, so it’s really important to make sure gift cards are prominently available there.”

Key Takeaways to Consider

The report focuses on specific details around how merchants can build and best leverage a digital gift card program for their brand. For merchants unsure of where to start—or how to grow their own gift card efforts—Spidaliere offered a few best practices to consider:

• Feature your gift card program prominently on your website and in your app, ensuring it’s easy for customers to find and access.
• Simplify the self-use purchase path by removing unnecessary steps for consumers who are purchasing for themselves.
• Allow credit card reward points to be redeemed for your brand’s digital gift cards to help expand the program’s reach and attract a new audience.
• Protect against gift card fraud by securing the digital gift card purchase and delivery process.

“We encourage merchants to conduct a benchmark of their own program, so we’d recommend you use the criteria from this year’s study as a framework,” Spidaliere said. “Go through your own purchase and recipient experience across all your devices, determine what’s working well and anything that you need to work on.”

To read the Consumer Experience Benchmark Report: 2025 Best Digital Gift Card Programs, conducted by NAPCO Research in partnership with BHN, or to watch the webinar, click HERE.

¹ NRF 2024 Holiday By the Numbers

The post The Gift Card Boom—and What’s Driving It appeared first on PaymentsJournal.

Across industries and companies—from small businesses to large enterprises—organizations are constantly searching for ways to improve corporate culture and boost employee engagement. However, in large, dispersed companies, providing employees with the personal touch needed to maintain motivation can be particularly challenging.

In a PaymentsJournal podcast, Julie Gu, Vice President of Sales and Marketing, North America, at Prezzee, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, examined key trends in employee incentive programs, the challenges organizations face, and how customized gift card program can effectively drive engagement.

Don’t Skimp on the RICE

Just as important as understanding what employees bring to the table at work is recognizing who they are as individuals. This is why organizations are increasingly interested in their employees’ hobbies, wellness, and inclusion interests.

As companies explore ways to boost employee engagement, there is an acronym—RICE—they should keep in mind.

“You know I’m Asian, so I never skimp on the rice,” Gu said. “What that means is that ‘R’ is for rewards and ‘I’ for incentives. ‘C’ is for celebrations—and that’s celebrating moments big and small, professional, and personal. Then, there is ‘E’ for engagement, which is making sure you’re forming a daily habit throughout, and that transcends all the aspects.”

Fostering engagement on a daily basis can be difficult in a busy office—and even more so in virtual or hybrid teams.

“We’re very virtual in our organization, so I joined a running group,” Hirschfield said. “I’m a poor runner, but it motivates me to run. Someone just ran a marathon, so it’s a great opportunity to celebrate that. With all these groups, we’re getting updates on coworkers who are having babies or weddings or things that humanize the organization. You don’t want to be an organization that’s robotic.”

Reinforcing the Right Behaviors

This shift toward interest groups is a key engagement trend. While many companies have already implemented enterprise resource groups (ERGs) to foster inclusion, interest groups can be more enjoyable and feel less obligatory than ERGs.

One of the most common types of interest groups is step challenges. However, many organizations are evolving past simple challenges like reaching 10,000 steps in a day. Micro-challenges, such as hitting 500 steps in a day, can be even more impactful.

“The micro-goals are important because that person who hasn’t been participating in an exercise program might be intimidated by 10,000 steps,” Hirschfield said. “I look at myself—I work at home, so I’m not walking from my car to the elevator, which adds a couple hundred steps here or there. Getting to 10,000 steps can be difficult for some people, but when you have attainable goals, they get that feedback and engagement.”

In addition to setting smaller goals, more companies are creating groups around shared experiences. As they organize these activities, organizations should ensure they support interests that positively impact their company.

“The first step is to think about what behaviors are already happening around the organization that you want to reward?” Gu said. “What do you want to continue to validate and celebrate? Who can you showcase as a great example of somebody who’s already living our core values who we can show as an ideal value ambassador? You want to reward those behaviors and make that a daily habit.”

Once organizations recognize existing behaviors, they can begin identifying the activities they want to incentivize. For instance, many employers emphasize mental health and wellness initiatives, as a healthier workforce tends to be happier and more productive.

“Think about which ways you want to reward versus incentivize, and from there,  cascade down to the snackable ways (you) can start, so you can start small,” Gu said. “It shouldn’t feel like this big three-year-long, road-map project that you have to tackle, because that’s where budget constraints and a lot of challenges start to happen.”

Closing the Feedback Loop

As companies refine their employee engagement plans, one of the most important aspects to consider is the employee themselves.

“I have three keywords—feedback, feedback, feedback,” Hirschfield said. “Employees want to feel like they’re being heard. Incentives are going to boost morale—Javelin has a lot of data that proves that—but what also boosts morale is giving employees what they want. That doesn’t mean you need to cater to their every whim of the employee; it means you’re listening to them.”

If employees see that even one program is introduced based on their feedback, it will make them feel that their voice matters and that they belong within the organization.

However, as organizations shift their incentive plans from being employer-driven to employee-driven, it’s important not to overlook the link between the two.

“People leave companies, but they stay for managers,” Gu said. “It’s critical to empower managers when we talk about employee rewards and engagement and incentives. It’s about how do we make sure that employees’ direct support every day is empowered. It makes them feel that they have a sense of community, and that they have this closed feedback loop and can feel heard.”

This community isn’t possible if the manager themselves doesn’t feel equipped with the tools or support needed to reward their teams effectively. One simple, turnkey way to empower managers in driving employee engagement is by enabling them to deliver gift card rewards.

Many companies have adopted this approach using small-denomination gift cards. For example, a manager could send a $5 gift card to recognize a team member for excelling at a task or contributing in a meeting—an appreciation that can have a greater impact than a simple kudos.

“A $5 card when it came from my manager probably feels a lot better than $25 coming from some generic HR inbox or a person who I’ve never met,” Hirschfield said. “The opportunity to make that connection is a huge step. If it’s an HR department that controls these budgets, it may be empowering managers to have access to it and make it easy for them to personally provide those rewards. It’s critical in terms of making that human-to-human connection.”

Beyond Monetary Value

Personalized incentive programs that utilize gift cards are an integral way to create connections and make an employee feel appreciated. Not only are gift cards the most popular gift among recipients, but they can also be tailored to the employee in many ways.

“You can include additional messages so that when I send you that gift card—even though it’s only for $5—the message that I send is that I noticed that you are training for a marathon, so here’s $5 towards your training regime,” Gu said. “It’s not really the monetary value, it’s the fact that you feel heard, seen, noticed and appreciated—and you feel supported for something that’s a big task.”

When giving a gift card, a little extra thought goes a long way. If the employee is training for a marathon, they might appreciate a $5 gift card to Starbucks. However, a gift card to a Dick’s Sporting Goods along with a personal message could have a much stronger impact.

“When you personalize it, you provide that reward or incentive or celebration that speaks to what that employee is doing, so making sure those are choices available to the HR department or the manager who is providing that opportunity, those are key,” Hirschfield said.

A Means to an End

For many organizations, implementing a personalized engagement program that leverages gift cards can be a daunting task. However, companies like Prezzee offer solutions that tailor incentive plans to an organization’s specific needs.

“We make your goals our goals,” Gu said. “Where are you struggling to find engagement or retention? Are you having attrition issues? In terms of employee engagement, we are constantly thinking about it every single day, from our employees to your employees, and we think of the gift card as a delivery vehicle—and a means to an end.”

The post Personalized Gift Cards Are the Cornerstone of Employee Engagement Programs appeared first on PaymentsJournal.

Gift cards remain one of the most popular payment tools in the U.S., not just during the holidays but year-round. As consumer preferences shift and digital adoption grows, the types of gift cards people buy reveal larger trends in spending behavior. Categories like dining, retail, and entertainment continue to lead the pack, but newer segments are emerging as consumer priorities evolve. These patterns offer valuable insight into how and where people want to spend—and what brands are top of mind.

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Data for today’s episode is provided by Javelin Strategy & Research’s Report: 21st Annual U.S. Closed-Loop Prepaid Card Market Forecast, 2024-2028

Top Consumer Gift Card Purchase Categories

• 46% – Online-only merchandise retailers
• 45% – Mass merchandisers
• 31% – Coffee or specialty food shops
• 30% – Fast food restaurants/quick serve
• 24% – Department store retailers

Source: Javelin Strategy & Research

About Report

Javelin Strategy & Research’s latest report offers a fresh look at the current state of the closed-loop prepaid market, highlighting the forces shaping its growth and transformation. While the overall outlook remains steady, category-specific trends are unfolding. In-store gifting is expected to maintain solid momentum, while segments like transit show both strength and vulnerability to change. This year’s analysis also brings new attention to the surging demand in online gaming and gambling—a segment that now ranks among the largest and fastest-growing in prepaid.

Economic shifts are playing a significant role, with easing inflation creating tailwinds for some categories while tempering gains in others. U.S. consumers continue to embrace closed-loop cards as a key payment option, and Javelin’s findings point to a rebound in certain sectors, rising card load volumes, and untapped market potential—alongside a few areas that are losing ground.

The post Top 5 Gift Card Purchase Categories appeared first on PaymentsJournal.

On Me has signed a five-year deal with Mastercard and secured $1.7 million in venture capital to build out its personalized digital gift card platform.

Unlike the traditional single-store gift card model, On Me’s platform centers each gift card around a particular interest or hobby. For example, a recipient could use a “Running, On Me” gift card at a select group of retailers like Nike, Adidas, or Reebok.

The all-digital cards aim to replicate the customizable experience consumers get on social media, allowing users to enhance their gifts with videos, photos, and GIFs.

“The offering from On Me highlights the convergence of two emerging trends in gift carding,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “First, the shift to digital issuance, which Javelin projects will reach a 50/50 split with physical cards in the next four to six years. Second, the small but rapidly growing category of open-loop restricted authorization network cards.”

“These cards run through open-loop networks like Mastercard, but restrict use to a limited amount of redemption options,” he said. “In effect, the recipient gets a tailored gift card that can be used at a wider variety of options. Javelin projects the open-loop RAN segment to grow at a CAGR of 10% through 2028, as highlighted in my recent report.”

Recipient Satisfaction

The shift to digital cards can help reduce gift card fraud, which cost consumers $217 million last year, according to the Federal Trade Commission. On Me believes that using digital cards with two-factor authentication built in can mitigate some of these risks, and its platform will also leverage the on-device encryption used in mobile payments.

Gift cards are the most requested gift for a reason—they let recipients choose the gift they want. Expanding the number of retailers where a single gift card can be used is likely to enhance recipient satisfaction, as will the platform’s personalization features.

On Me currently offers over 70 interest-based digital gift cards, but the platform hopes to add new products centered around hobbies like skydiving, horseback riding, cooking, and wine tasting.

The post On Me Secures Mastercard Partnership for Tailored Digital Gift Card Platform appeared first on PaymentsJournal.

Gift cards have become a go-to solution for thoughtful and versatile gifting, offering recipients the freedom to choose something they truly want or need. Whether you’re celebrating a milestone, expressing gratitude, or simply looking for a convenient yet meaningful present, gift cards provide the perfect balance of practicality and personalization. From birthdays and holidays to corporate events and last-minute surprises, these little cards pack a big punch, making them suitable for a variety of occasions.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Javelin Strategy & Research’s Report: 2024 Prepaid Holiday Preview

Top Occasions for Consumers’ Purchase of a Gift Card for Someone Else

• 77% of Gift Card Purchases were for Birthdays.
• 63% of Gift Card Purchases were for Christmas/Hanukkah/Kwanzaa.
• 23% of Gift Card Purchases were for Graduation.
• 23% of Gift Card Purchases were for Mother’s Day/Father’s Day.
• 19% of Gift Card Purchases were for Just because, no particular occasion.

Source: Javelin Strategy & Research, 2024

About Report

As the retail industry gears up for the 2024 holiday season, lessons from recent years are shaping strategies to navigate its unpredictable nature. While 2023 showed signs of recovery from a challenging 2022, the dynamic interplay of economic factors and consumer behavior continues to underscore the importance of proactive planning. Retailers, gift card providers, and industry players are leveraging insights to fine-tune their approaches, aiming to effectively engage shoppers and optimize performance during this critical period.

Gift cards remain a cornerstone of holiday gifting, offering value to both buyers and recipients while presenting significant opportunities for businesses. Research shows that their enduring popularity not only drives revenue but also serves as a powerful tool to convert one-time transactions into lasting customer relationships. Beyond consumer gifting, gift cards are increasingly pivotal in commercial sales strategies, enabling businesses to expand their reach through recipient-driven channels. With the end-of-year period demanding a well-executed approach, early planning is essential to fully capitalize on these opportunities.

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 The holiday season is here, bringing with it a host of celebrations. From office parties to family gatherings, shoppers are navigating an evolving landscape of gift-giving traditions. In our latest podcast episode, we dive into how consumer trends, new technologies, and the timeless appeal of gift cards are shaping the way people are gifting this season.

In a recent PaymentsJournal podcast, Sarah Kositzke, Director of Research, and Jonathan Soffin, VP of Global Brand & Product Marketing at Blackhawk Network (BHN), chatted with Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. They discussed the results of BHN’s Holiday 2024 Shopper and Gift Card Insights, the trends driving holiday gift card purchasing, and the accelerating momentum of the prepaid industry.

Moments of Celebration

One of the most notable trends in recent years is that consumers are no longer buying gifts for just a single occasion. Instead, they’re shopping for multiple events throughout the holiday season, including school occasions, office parties, and get-togethers with friends and extended family.

“There are all these great moments of celebration throughout the holiday season that often require gifts,” Kositzke said. “One of the things that we’ve been tracking is how consumers determine what the right gift is for different people across different events. How are they going to figure out what’s the right thing to bring for grandma, their daughter, or a co-worker?”

According to BHN’s research, roughly half of consumers will directly ask recipients what they want, while others will source ideas from family and friends. Some shoppers even check social media to see the products or services the recipient has liked on Instagram or Pinterest.

An emerging tool for holiday shopping this year is artificial intelligence, with about half of younger consumers planning to use it for their gift shopping. The ways they’re leveraging AI range from finding deals to generating unique gift ideas.

 “I have twin teenage boys, and when it comes to Christmas presents, they want to make sure one doesn’t get a better gift than the other,” Soffin said. “I asked ChatGPT which gift I should get them, and it came back with fashion tech gadget [recommendations] like wireless earbuds, gaming accessories, and sports gear. At the top of the list was a gift card to a gaming platform or a streaming service. If I’m not sure what specific brand of tech or fashion they want, a gift card to their favorite store is a great option.”

Shopping Motivations

Holiday shoppers are starting earlier than ever to find the perfect gifts for everyone on their list. Budgets are now spread across a longer period, beginning even before September and extending through December. However, only about a quarter of consumers’ holiday budgets are spent at the start of this period, with the remainder concentrated from Black Friday through the end of the season.

Younger consumers, in particular, are motivated by promotions and sales events. The BHN report found that Gen Z encounters more seasonal sales events than older generations, which drives many to wait for Black Friday and Cyber Monday promotions. What’s more, many Gen Z consumers have tighter budgets, as they may be recently out of school or in their first jobs.

“For all ages, what gets people out of bed are the sales and deals and promotions,” Kositzke said. “There are still concerns about the economy and inflation, coupled with the sheer number of people that consumers want to buy gifts for. Sales and deals have become an important factor in holiday budgets.”

Another consideration is there are five fewer days in the holiday season this year. The condensed holiday season is driving many retailers to push early holiday promotions to bolster sales.

“The shorter timeline could also impact the transition to digital formats,” Hirschfield said. “Many last-minute shoppers might not have time to mail a physical card, or maybe it’s just a consumer is concerned about misrouting or mail theft. Gift cards are shifting towards digital delivery in general, because it offers consumers the ability to send their gift quickly and confidently.”

Online and In-Store

Given the growing digital preference among consumers, some retailers may be unsure whether their promotional funds are best spent online or in-store. However, all indications show that shoppers will use every avenue that’s available to them, shopping both in-store and online.

“The short answer is that it’s really a blend of both,” said Soffin. “Customers still prefer doing their holiday shopping in store, but online is closing the gap. Today, 85% of all consumers plan to shop in-store. When we ask consumers why they shop for physical cards, they say the convenience of already being at the store and completing their shopping all in one trip is the top reason.”

When dialing down on where consumers purchase gift cards, Javelin’s data indicates that the number one choice is a gift card mall at a retail store. The malls at grocery stores or drug stores give consumers a place to browse for the right gift card and pick up cards for various recipients at once.

The second most popular place to purchase gift cards is at a retailer’s physical store. Consumers may already be shopping for other gifts and decide to pick up a gift card while checking out. A retailer’s website ranks as the third most popular venue for buying gift cards.

It might be tempting for merchants to focus on in-store sales, but 49% of consumers also plan to buy a gift card online. There is a growing cohort of consumers who prefer online because it’s easier than fighting the crowds. The speed of ordering without leaving the house is almost second nature to younger generations, and many consumers still have health concerns about physical stores that are lingering from the pandemic.

A Reliable Bet

Regardless of where consumers buy gift cards, they plan to keep buying them. Data from the National Retail Federation found that gift cards are the number one requested gift for the 18th year in a row.

BHN’s research found that the average holiday spend will be $760, and consumers said they will spend roughly half of that budget on gift cards. Younger generations are leading the way, and they expect to spend 54% of their budget on gift cards.  

Consumers were left wanting more gift cards after last year’s holiday season, and 84% of consumers say they will buy an average of 17 gift cards. The accelerating adoption should put gift cards at the forefront of a positive holiday season.

“With gift cards, the buyer doesn’t have to worry about the right color, the right size, or the right fit,” Kositzke said. “They don’t have to worry about their gift being returned. Maybe the recipient wants a bigger-ticket item that the buyer can’t afford, but they can give a gift card that can go toward the larger purchase. All those reasons are why people say gift cards are a reliable bet.”

To learn more, check out the resources below from BHN:

• 2024 Outlook
• eBook: Holiday 2024 Shopper and Gift Card Insights
• eBook: Your 2024 Holiday Readiness Checklist
• Webinar Recording: Consumer Shopping Insights to Transform your Holiday Gift Card Business

The post During a Hectic Holiday Season, Gift Cards Continue to Be a Reliable Bet appeared first on PaymentsJournal.

Holiday gift cards have a meaningful impact on employees and their teams worldwide.

In fact, a recent survey from CleverCards, which polled 600 employees in Ireland, revealed that 84% of respondents said receiving a holiday gift card from their employer would boost their engagement and make them less likely to consider switching jobs.

The main reason employees were motivated by gift cards was their flexibility—they could be spent anywhere. Workers also noted that they would use the funds to treat themselves instead of covering essential expenses. Indeed, the study found that only around a quarter of respondents planned to use their incentive to pay bills.

“As it is in Ireland, it is in the United States,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “In Javelin’s U.S. survey, we asked employees if receiving a recognition benefit increases their satisfaction with their employer, and 83% said yes. Employees generally treat themselves with these incentives, and Javelin’s research shows that people will usually spend more than the value of that gift card.”

The Three Points

The rising popularity of gift cards as employee incentives creates powerful opportunities for retailers and gift card issuers. According to Hirschfield, when consumers receive a gift card from a new brand, 44% become repeat customers, and 41% join the company’s loyalty program.

Recognizing the benefits of employer incentive programs, more brands are now offering discounts on their business-to-business offerings to drive sales.

“The employers that participate in formal incentive purchase programs buy gift cards at a discount,” Hirschfield said. “That discount is worthwhile to the retailer because it can ramp up repeat purchases. Instead of offering a coupon, which is strictly money off, this is a slight discount which they then recoup by participating in these plans.”

“To link it back to the employers, their employees are more engaged and responsive, and they’re more likely to stick it out through the ups and downs of the workplace,” he said. “It’s a massively beneficial program for all three points that are involved: the employee, the employer, and the sponsor of the gift card.”

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It can be difficult to choose the perfect gift! This is just one reason why consumers are planning to purchase gift cards this year. Many believe that gift cards give recipients the freedom to choose what they really want—whether it’s a night out, a luxury item, or a grocery trip.

In a recent PaymentsJournal webinar, Sarah Kositzke, Director of Research and Jay Jaffin, Chief Marketing Officer at Blackhawk Network (BHN), along with Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed gift card purchasing and redemption trends, sustainability, year-round gifting and gift cards as incentives.

Economic Impacts and Key Trends

There are mixed messages in the macroeconomic environment. It appears that inflation is slowing, but prices are still 25% to 30% higher than just a few years ago. Consumer confidence is trending up, however, and retail sales are expected to rise by 3% year-over-year.

On the topic of omni-commerce, Kositzke noted that it has been redefined, and “it no longer means just a physical store and a website. It is evolving to include an entire ecosystem where consumers interact with brands from apps and social media to the influencers to the in-store experience.”

Continuing to trend this year is the shift to mobile payments. Around half of U.S. adults use mobile payments, which has, in turn, driven demand for digital gift cards. Buy-now-pay-later (BNPL), is also projected to grow by 50% next year. These emerging payment methods make it critical for merchants to offer multiple payment options at the point of sale.

Sustainability is also playing a larger role in purchasing decisions, with roughly two-thirds of consumers willing to pay a bit more for sustainable products.

“There is an opportunity here for the gift card industry,” Jaffin said. “They may seem like little pieces of plastic, but creating the raw materials for plastic gift cards takes about four times as much carbon as it does for durable paper stock gift cards. The reality is, it’s good for the planet, but it’s also good for business. Consumers want options like paper gift cards instead of plastic because they’re recyclable.”

Consumer Purchasing Habits

Not only do consumers spend the amount they receive on a gift card, but nearly six in 10 spend more than the value of the card.

“It’s really helping to increase the overall shopping basket, and also extending the brand beyond the traditional gift card value,” Kositzke said. “You get the chance to build a loyal customer, which often happens when they receive that initial gift card. About a quarter of people got a gift card to a new brand last holiday, which is a great opportunity for them to try something they never had on their radar.”

Thinking about where people are buying gift cards, consumers generally go to merchants they trust, both in-store or online. In-store gift card purchasing is often driven by convenience; the customer either happened to drive by or already had the stop scheduled along the way.

“In-store still dominates, but about half of consumers are buying cards online and it’s rising,” Kositzke said. “The key is putting your gift cards where people want to shop. A lot of folks use smartphones to make purchases and gift cards fall into that category, so optimizing that mobile strategy is important, especially as we see the demand for digital gift cards growing.”

Most digital gift cards are delivered by email, but SMS and messenger app delivery are increasing in popularity. That has been driven by preferences among younger consumers who expect a digital-first experience. For that reason, drop-to-wallet functionality will be critical going forward as more users adopt digital wallets.

Digital gift card growth will also accelerate due to the convenience factor. In many cases, a digital card might be the only option, like when the recipient lives far away or can only accept a digital card. Digital cards also offer more personalization options, where the sender can add a personalized video or picture.

“However, there is still room for improvement with digital gift cards,” Kositzke said. “There’s a demand for better digital delivery, because emails can be difficult to sift through. If the consumer can get a text message and upload the gift card seamlessly to a digital wallet, there’s a better chance they will use it. Today only about 45% of people are storing gift cards in wallets.”

Fraud Prevention

Financial crimes are an ongoing challenge, so a strong risk management and fraud prevention program is essential for protecting both your business, and your customers.

“Gift card fraud has gotten more attention lately, and, as an industry, it’s our responsibility to take on this challenge and protect our customers,” Jaffin said. “On the merchant end, businesses should report any suspicious activity to law enforcement immediately, because many times fraud is part of a larger operation.”

Another critical aspect of gift card fraud prevention is consumer education, especially around the holidays. Wherever consumers buy gift cards, there should be signage or e-mail communications directing customers to inspect the gift card’s packaging for tampering.

Year-Round Gifting

Birthdays are the number one occasion where gift cards are given, followed by the year-end holidays. However, gift cards are increasingly being given in all types of situations. In the workplace, for instance, they can be a powerful way to incentivize workers.

“It’s a great mechanism to motivate your teams,” Jaffin said. “For example, there is a platform that allows managers to deliver a gift card directly through Microsoft Teams in a team meeting. Not only do you get to recognize an employee, but the entire team gets to see it and it becomes an event.”

Many consumers are also using gift cards for personal spending. Prepaid and gift cards can be useful alternatives to high-interest credit cards in a tough economy. Many consumers report using prepaid cards to control their spending, and 19% said they use gift cards to manage their budget.

In the case of a customer dispute, merchants can offer a gift card as an appeasement, both resolving the issue and retaining the customer’s loyalty. Additionally, gift cards serve as a great reward for customers who have remained loyal to a brand.

“It’s really for any moment when you want to say thank you, whether it’s to the teachers, delivery drivers, or bus drivers,” Kositzke said. “It’s effective and it’s sought-after all year, so companies should have likewise have a gift card plan that stretches the entire year. From small moments to big moments, gift cards are given year-round.”

To learn more about U.S. shoppers’ attitudes toward gift cards, download BHN’s recent e-book, 2024 Could be a Shockingly New, Shockingly Normal Year for Gift Cards.

To learn more about what industry participants can do to mitigate gift card fraud, download BHN’s recent e-book, The Broad Report 2024, the State of Gift Card Fraud.

The post Exploring the Current Gift Cards Landscape appeared first on PaymentsJournal.

As digital commerce continues to grow, the use of gift cards has evolved, with online redemption becoming increasingly popular across various generations. While gift cards remain a convenient option for gifting, how different age groups redeem them is shifting. From tech-savvy Gen Z to digitally adept Millennials, and even Baby Boomers embracing online platforms, each generation has its own distinct approach to utilizing gift cards.

In particular, Gen Z and Millennials, who are highly accustomed to digital ecosystems, prefer the convenience of redeeming gift cards through online platforms and mobile apps, aligning with their broader shopping habits. Their comfort with technology drives demand for seamless, digital-first gift card experiences, often tied to e-commerce and social media integrations. Meanwhile, Baby Boomers, though traditionally associated with in-store gift card usage, are increasingly adapting to digital redemption options as they become more user-friendly and accessible. This shift not only reflects generational preferences but also points to a broader trend of digitization within the payments industry, where gift card providers are enhancing their offerings to meet the needs of a diverse consumer base.

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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Javelin Prepaid Consumer Sentiment: A Generational View

Gift Card Redemption Online by Generation in the Past 12 Months

• 76% of Gen Y / Millennial’s redeemed gift cards online.
• 68% of Gen Xer’s redeemed gift cards online.
• 67% of Gen Zer’s redeemed gift cards online.
• 61% of Baby Boomer’s redeemed gift cards online.

Source: Javelin Strategy & Research

About Report

Generational approaches to prepaid card usage highlight the potential for tailoring programs to meet the specific needs of different demographic groups. While the behavior of one generation may not always predict the habits of the next, valuable insights can still be gained by examining generational trends. These insights can help inform strategies that encourage new and innovative uses of prepaid cards.

The generational perspective also sheds light on the ongoing digital divide. As prepaid card programs expand into omnichannel and digital platforms, younger, tech-savvy generations like Millennials and Gen Z show distinct preferences in how they receive and use these cards. Meanwhile, Baby Boomers tend to maintain more traditional behaviors, with Generation X often positioned between the two, balancing both digital adoption and conventional redemption methods.

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With no relief from inflation in sight, consumers are bracing for an expensive holiday shopping season, especially with only 27 days between Thanksgiving and Christmas this year.

To stretch their budgets, consumers will leverage every available method, and merchants’ loyalty programs can save customers money while strengthening brand relationships. However, another key pillar of a merchant’s successful holiday strategy is its gift card program.

In a recent PaymentsJournal podcast, Tom Niedbalski, Vice President, Global Sales and Partnerships at Fiserv, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the convergence of gift cards, loyalty programs, and technology—and the opportunities this creates for merchants in the upcoming holiday season.

Shopping Strategies

Tighter budgets have driven consumers to shop earlier and spread out their purchases, a trend that retailers have encouraged with events like Prime Day. Consumers are also expected to take advantage of upcoming events like Black Friday and Cyber Monday.

Loyalty programs greatly influence where consumers shop during the holidays, as savvy customers use them to bolster their holiday spending. That’s why major retailers like Target, Walmart, and Amazon continuously drive engagement with their loyalty programs; it directly encourages consumers to participate in sales and promotions.

Gift cards should also be integrated into a merchant’s loyalty program. For example, a customer might receive a gift card for spending a certain amount or redeeming a specific number of reward points. However, a merchant’s gift card program takes on added importance during the holiday season.

“Gift cards have become the most popular gift,” Hirschfield said. “Roughly 63% of consumers say they will buy a gift card this holiday season, and 16% expect to spend more than last year. A loyalty program that is tied in with gift cards not only helps buyers purchase the items they need, but it’s also an inducement to purchase gift cards for others during the holiday season and beyond.”

Omnichannel Experience

Brands need to meet customers where they shop and pay, so merchants must invest significant time ensuring their mobile experience includes payments, loyalty, and gift cards in an omnichannel wallet.

“The digital experience not only allows the brand to interact with its consumers, but consumers can see the value of interacting with the brand,” Niedbalski said. “For years, I’ve been saying that stored value is the vehicle that drives transactions out of interactions and interactions out of transactions. It’s a two-way street.”

A digital wallet can also serve as the platform for merchants to offer innovative loyalty programs, such as product-specific promotions. For instance, if a customer buys a particular product, they might receive a gift card from the manufacturer to buy related accessories.

Another growing trend is self-use, and consumers who use gift cards for themselves are heavily influenced by loyalty programs.

“It creates a cycle of promotions, and it all links back to the phone,” Hirschfield said. “The mobile phone holds a customer’s stored value account and their payment methods. The physical gift card is still the top seller, but nearly a third of consumers will redeem a gift card in a mobile app. That number is only going to grow.”

Personalization vs. Privacy

Gift card personalization is a powerful way to connect with different demographics. With many faiths celebrating during the holidays, it’s important for merchants to cater to the diversity of their customer base.

Some brands have started offering print-on-demand gift cards. In the past decade, there has been a shift from traditional Christmas cards to postcards featuring personal images. This same concept is now applied to gift cards, allowing consumers to upload a family photo and include it with their gift.

“It connects with consumers, and these designs jump off the shelves, or the pegs, if you will,” Niedbalski said. “With e-commerce, there are a substantial amount of personalization options that give the gift a life of its own. Senders can include a written personal message, or they can send a voice message for friends and family in different areas.”

While personalization is a powerful tool, merchants should be cautious not to ask for too much personal data. Over half of consumers have distanced themselves from brands that request excessive information or send too many notifications.

“By nature, gift cards are incredibly private for the recipient—they can choose to utilize the card’s value without disclosing any personal information,” Hirschfield said. “That’s where merchants must strike a balance. They need to capture some customer data, but they don’t want to push too hard.”

Maximizing Visibility

With a wide range of products and services available in-store, many merchants can often struggle to boost gift card visibility. However, as the holiday season nears, in-store gift card displays can be highly effective. Equally important is catering to online shoppers—gift cards should be prominently featured in website banners, included in customer email campaigns, and promoted across social media channels.

Merchants should also ensure proper in-store placement and signage for gift cards, and maintain sufficient inventory to compensate for stockouts on other merchandise. Gift card displays don’t have to be limited to the point of purchase; there’s a growing trend of retailers offering themed gift cards in each department.

“Imagine a sporting goods store, and in the golf section you have golf-themed gift cards, and in the athletic shoe section you have shoe-themed gift cards,” Niedbalski said. “You’re giving the consumer multiple points of purchase. Maybe they can’t find the item they want, but instead of leaving the store, they purchase a gift card.”

Improving gift card visibility can also mitigate fraud and theft. Criminals often take gift cards off the rack, steal their data, and return them. If cards are in an unmonitored location, it creates risk for both consumers and merchants.

“This is a perfect time of year for merchants to retrain their staffs, especially if they are hiring temporary help,” Niedbalski said. “Employees should know how to spot suspicious behavior and check gift card packaging for tampering, even at the point of sale. Fraud is a threat in the gift card marketplace, but oftentimes it can be avoided if a merchant’s staff knows what to look for.”

Flawless Execution

Persistent inflation and the shortened holiday season make it critical for merchants to develop a holiday strategy now. That means establishing early holiday promotions and marketing them through appropriate channels.

“The key for all merchants is to create a plan early and execute it flawlessly,” Niedbalski said. “By running deeper promotions with longer promotional windows, it will not only encourage consumers to purchase gift cards for the financial benefits, but it’s also going to drive consumer loyalty. That will help merchants both retain existing customers and acquire new customers for their brand.”

The post Merging Loyalty and Gift Card Programs for an Optimal Holiday Shopping Season appeared first on PaymentsJournal.

Digital gift cards now account for over half (52%) of the UK gift card market share in what is being called a “pivotal shift” in the industry.

In the first half of the year, digital gift card sales increased by 17.1%, according to a report from the Gift Card & Voucher Association (GCVA). Over the past five years, this figure has grown by 30% as UK companies have increasingly incorporated digital gift cards into their loyalty and rewards programs.

“The surge in digital gifting in the UK is impressive and it is ahead of the pace in the U.S.,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “Javelin firmly believes that the U.S. will reach a 50/50 split between physical and digital gift cards by the end of the decade. That is driven by similar features of loyalty and rewards that link easily to consumers’ apps and stored value accounts.”

Getting Creative

The leisure and entertainment sector outperformed the retail sector in the UK gift card market, with sales of entertainment-oriented cards increasing by 15.5% year-over-year. However, digital gift card sales in the retail sector still saw a 23.2% year-over-year growth, with grocery stores being the most popular choice among consumers.

Retailers have continued to find creative ways to drive gift card sales. This includes offering a bonus gift card with a purchase or rewarding extra loyalty points to customers who make purchases using their stored value accounts.

A Landmark Moment

Digital gift cards can be a strong component of a loyalty program, driving both engagement with a company’s app and fueling greater spending—consumers typically spend more than the gift card’s value.

“The rise of digital gift cards is a landmark moment for our industry, highlighting the shifting preferences of both consumers and businesses,” said Hannah Shimko, Managing Director of the GCVA in a prepared statement. “This trend underscores the innovation and flexibility inherent in the gift card market, which continues to adapt and grow despite economic headwinds. As we approach the crucial Christmas period, it will be intriguing to see how these trends evolve and shape the future of the market.”

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Prepaid and gift cards have become increasingly popular as convenient financial tools and versatile gifting options. However, their widespread use comes with a distinct set of challenges and potential risks that consumers must consider. From vulnerabilities like theft and unauthorized usage to the complications of expiration dates and hidden fees, what are the issues consumers have to consider?

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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Mitigating Risk in Prepaid Card Programs

Top 3 Security Issues and Lost-Value Risks When Using Prepaid/Gift Cards

• 44% – Loss of funds due to expiration of card
• 43% – The card becoming lost or stolen
• 34% – Inability to access the prepaid balance at the time of use due to technical issues

About Report

Risk in any business is inevitable. Prepaid card programs start with risk as soon as the financial liability of a card appears on the balance sheet. From the time of issuance, all parties in the value chain must be aware of the many risks associated with that liability and understand how best to mitigate them, knowing that eliminating risk is an impossibility. 

The risks start with the seemingly simple task of understanding customer sentiments and managing their expectations. However, that is much more difficult than it appears. Other risks include store policies, theft scams, and fraud, the successful management of which compounds into ensuring customers feel secure in their purchases. Strong back-end technology and policies create an overlying, invisible shield that helps further reduce risk to acceptable levels.

The post Top 3 Concerning Security Issues Using Prepaid/Gift Cards appeared first on PaymentsJournal.

Prepaid cards continue to be the preferred gift for both recipients and givers, as retailers develop new ways to make them attractive to customers. This engagement extends revenue opportunities for merchants and can turn anonymous gift cards into distinct customer loyalty vehicles.

Retailers are already gearing up for the holiday shopping rush, making this the right time to look at trends that will affect gift card purchasing towards the end of the year. Nearly two-thirds of consumers who buy a gift card do so during the holiday season. In his report, 2024 Prepaid Holiday Preview, Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, looks at the trends likely to impact prepaid card purchases for the remainder of the year, considering factors from buying patterns to macroeconomic influences.

An Adaptable Solution

Retailers have devised creative ways to use their gift cards, spurring loyalty and encouraging consumers to expand their initial purchases. Some organizations now offer bonus gift cards—for example, buying a $50 card from Target might come with an additional card with $10 at no extra cost.

“It’s effectively a coupon except that it’s a coupon promising future benefit back to Target versus just straight money off,” said Hirschfield.

This additional bonus card can provide sizable benefits. Generally, people who use a gift card spend more than the card’s value, often purchasing more profitable, expensive items. By offering an incentive card with the purchase of another gift card or a general purchase, merchants not only improve their revenue but also foster customer loyalty.

Hirschfield contrasts gift cards with coupons, which have many similarities. “Couponing is such a simple transaction,” he said. “Here is a piece of paper or a code and you get X percent off and are encouraged to go back to the store.”

Gift cards enable retailers to be much more creative. For instance, if  Target has a department with slow sales, they can try to boost activity by offering a promotion such as an additional $10 card specific to the housewares department with the purchase of a $50 card. Alternatively, they could structure the card to encourage the consumer to bring a friend into the store. These innovative promotions not only drive sales but also engender loyalty.

Starbucks is another example of a merchant adding creativity to its gift card program. If a consumer makes a purchase at Starbucks using their card stored-value account, they receive twice the Star benefits compared to a regular payment. This approach builds customer loyalty while providing Starbucks with more data and analytics on their most dedicated customers.

One category that has seen a slight decline in usage is the general-purpose gift card, such as those from Visa, Mastercard or American Express. These cards remain the top choice for gift-giving, but many people have turned to peer-to-peer apps to give money to friends and family. The number of people listing general-purpose cards as their preferred gift slipped from 26% in 2023 to 23% this year. 

Macroeconomic Factors

Heading into the busy season, Hirschfield sees interest rates as a factor that might boost sales. The Federal Reserve has kept interest rates steady for the past year, but many observers expect rates to be cut before the holidays. If that happens, consumers could see their credit card interest rates go down, which would induce them to spend more. Gift cards would be a logical beneficiary of that additional spending.

Hirschfield describes gift cards as the “most resilient” of gifting options. His research shows that 16% of holiday card buyers are likely to spend more this year, while 83% are going to spend a similar amount, and only 2% intend to spend less. These numbers could improve further if the economy strengthens or if interest rates decrease.

“Gift cards still [seem to be] a segment in holiday spending where people will spend more in total than they did last year,” Hirschfield said. “Almost 100% of card buyers are likely to buy gift cards again for the holidays, so it’s incredibly resilient no matter what the economic conditions are. Any easing of spending pressure can only improve that more.”

One downside of gift card sales for retailers is that they don’t receive the revenue immediately. When a card is purchased, it becomes a liability on the store’s balance sheet. Unlike a direct sale, where the store gets that money right away, the funds from a gift card remain unclaimed until the card is redeemed.

However, the situation does have a silver lining. Often, gift cards are redeemed in the first quarter, which is typically a slower period for retailers. As a result, the redemption of these cards can help offset some of the seasonal dips in cash flow.

“The upside of more frequent visits, increased spending, buying more expensive items, and trying new brands and services often offset the downside of the financial liability,” Hirschfield said. “There’s so much opportunity to push more gifts out of that product.”

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In an era marked by rising inflation, prepaid cards have become more than mere financial tools. They are increasingly seen as strategic assets in managing the economic pressures felt by consumers and retailers alike. The benefits of gift cards extend beyond financial transactions, helping retailers build personal relationships and loyalty with their customers.

In a recent PaymentsJournal podcast, Sam Lituchy, Vice President and Head of Gift Solutions at Fiserv, spoke with Jordan Hirschfield, Director of Prepaid Payments at Javelin Strategy & Research, about how prepaid cards have evolved into multifaceted tools and how the benefits for consumers can also benefit the issuers.

Advantages from All Angles

The reasons for businesses to offer strong gift card programs are many. Fiserv data shows that revenue growth is about 15% to 25% greater when customers are engaged in a merchant’s loyalty offering or program. That tends to show up in a variety of ways, whether from increased frequency or greater average order value. 

On top of that, prepaid cards can provide a more cost-efficient customer acquisition tool than other competitive advertising or marketing channels. “A strong loyalty program can turn a traditional consumer or user of that program into a great advocate,” Lituchy said. “Once that happens, the user often starts a social recruitment journey, bringing in friends or family members into that program.”

Lastly, the data captured from these loyalty programs is extremely powerful. 

Merchants have an opportunity to leverage this data, gaining insights into demographics, engagement patterns, and purchasing behavior. It allows them to analyze what is working well, what is not, and what they should double down on.

“Customer acquisition costs are worth keeping an eye on here,” Hirschfield said. “What we see in our research is if you use incentives in concert with your loyalty program, you might get $20 savings to acquire a new customer. That’s pretty impactful, and all those benefits have a knock-on effect on spend.”

 There’s also a spending uplift when a retailer can rely on loyal customers. The small things you might do to bring customers into your loyalty program pay off time and again through not only the first customer but also the social aspect of getting more customers in.

More Than the Value

Prepaid cards can also be a more cost-effective payment method, driving top-line growth and bottom-line savings. Many merchants are unaware of the benefits of the upfront cash that a gift card sale can generate for merchants. Those funds can be invested in a variety of ways. 

Consumers tend to spend more than the face value of the card when they come in. They may come into a store with a $50 card and ultimately spend more than that. Javelin’s research indicates that 40% of gift card recipients will always or usually spend more than the value of a card. Another 25% splurge on a more expensive item than the card’s value, and 30% say they will visit the store more often. By getting people to come into their store and have that tactile experience, merchants might have another 20% that try a new brand or product or service. 

“The TV that my kids use for their video gaming went out,” Hirschfield said. “I used a gift card and ended up buying a more expensive TV than I was anticipating. It was a better brand than maybe I would have normally done for the less technical TV they play their video games on. Without really planning to, I maximized the value of that gift card that I had sitting here.”

The Self-Use Cycle

On the flip side, smaller balances do get left on cards. Those unused balances over time can continue to build and ultimately get recognized as revenue, which is obviously a benefit for the business. A few businesses have been able to build a lot of remaining balance, which increases revenue. 

The self-use cycle allows those stored values to always remain in the merchant’s account. That merchant can put that money to work while the consumer is waiting to use it. While those funds are a liability on the balance sheet against future use, they can be interest-bearing.

Consumers in the loyalty program provide more value to the retailer when they reload the card. It may have started as a gift, but the card becomes a cyclical self-use item if it’s constantly being decreased, never reaching zero but always providing continued benefits to the consumer and the merchant. That arms the merchant with much more powerful information and at a reduced cost rather than doing such research through a third party. These cost advantages become amplified because 80% of self-purchasers anticipate buying more cards for self-use in the coming year. 

Beyond Gifts

“Gift card” has become in many ways a misnomer because self-use is what drives the repeatable business for prepaid cards. When people buy a gift card for themselves, they’re doing it to earn rewards. Javelin’s research shows that among people buying prepaid cards for self-use, 40% do it to earn loyalty points, while 48% do it to take advantage of a promotion.

One of the least-known benefits of offering gift or stored-value cards is that payment processing fees are reduced. The total cost between a gift card sale and its subsequent usage tends to be lower than a traditional interchange driven payment. There are further savings when merchants can incentivize consumers into their first-party app or wallet, to continue bringing them into the merchant ecosystem. 

A handful of examples in the marketplace, like Starbucks and Walmart, have done an exemplary job of bringing consumers into their experience, keeping them involved in that ecosystem. That drives down the cost of acceptance for those merchants on each transaction. The most successful gift card programs will use synergy and consumer habits to bring advantages of all kinds to the issuers and the customers.

“I have been a loyal Delta flyer for years, and my Delta account is tied to my Starbucks account,” Hirschfield noted. “If I load up my card with $25, I get something like 250 miles.  If I load $100, it’s more like 2,000 miles, for money that I’m going to spend at Starbucks anyway. These programs not only reward regular use but can tie in like-minded partners to do so in ways that engage the consumer on multiple aspects to do a bigger initial purchase. And that $25 to $100 purchase at Starbucks reduces their cost, when you consider the average price of going to Starbucks is probably somewhere between $5 and $10 per person.”

Any well-run loyalty program combines all those advantages. It’s not just about enticing people to buy a gift; it’s getting them to also buy for themselves, to be more engaged, earn those points, earn those rewards, and build that loyalty. 

Learn More About Fiserv Stored Value and Loyalty.

The post It’s a Gift: The Hidden Benefits of Prepaid Cards appeared first on PaymentsJournal.

With gift card spend projected to reach $267.3 billion by 2028, it’s clear that gift cards  are an influential force in the market. And the rise of digital gift cards, a trend that continues to gain momentum, is opening up new avenues to engage younger generations.

During a recent PaymentsJournal podcast, Blackhawk Network’s (BHN) Sarah Kositzke, Director of Research and Hilary Spidaliere, Director of Product Marketing, as well as Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, explored, analyzed, and amplified the insights from this year’s Benchmark Report: 2024 Digital Gift Card Leaders, conducted by NAPCO research in partnership with BHN. This market-leading report on the gift card industry, which evaluated the digital gift card programs of 100 U.S. merchants, identifies best practices and opportunities for how retailers can optimize their own gift card programs.  

Gift Card Industry Trends

During the 2023 holiday season, the average individual received around three gift cards, totaling roughly $160 in value. However, when recipients made their purchases, they spent an average of $78 more than the card’s value¹. Leveraging a gift card to purchase a bigger-ticket item is commonplace and one of the reasons why gift cards are so valuable to retailers – driving that additional overspend and store visits.

“About a third of people said their favorite gift was a gift card,” Kositzke said. “Most people are still getting single-branded cards, like Starbucks or Amazon, which account for 75% of gift card buys. The Visa and Mastercard options and multi-branded cards are picking up steam though¹.”

According to BHN, 77% of purchases were physical cards, even when the transactions occurred online. Physical cards are considered more personal, especially when there’s an option to customize the card. Despite the increasing popularity of online shopping, most gift card transactions still happen in-store, making up 85% of purchases¹. But that is likely to change.

“Looking a little further out to 2030, digital cards are going to continue to gain ground,” Hirschfield said. “By the end of the decade, it’s likely to be a 50/50 split. That’s driven by Gen Z and Millennials, who are also significantly more likely to extend their purchases beyond the gifted amount. Digital options are going to be a great way to reach those generations.”

2024 Gift Card Benchmark Report Criteria

NAPCO Research, in partnership with BHN, examined the gift card programs of 100 U.S. merchants with a specific emphasis on the e-commerce gift card experience. NAPCO developed 130 criteria, across to four major categories.

“First and foremost is discoverability,” Spidaliere said. “How easy is it to find that brand’s gift card program? Next, they’re looking at personalization. Can I pick my own gift card design, or add a personal message? Third, they’re evaluating the checkout experience for efficiency and payment flexibility. Finally, they’re evaluating the recipient experience. Does the card feel like a gift? Is it easy to redeem?”

The end goal was to fully evaluate the purchase and recipient experience for each of the merchants across all platforms.

Speaking to the assessors who reviewed each gift card program, “They’re like a secret shopper,” Spidaliere said. “During the process, they capture hundreds of screenshots and use them to score each of the merchants across the established criteria. Then they crunch the numbers and not only come up with the rankings list, they also identify industry trends and best practices.”

Areas of Opportunity

One of the main takeaways from the study is there’s plenty of room for improvement—even for the companies that ranked in the top ten.

“Everybody across the board has something that can be fine-tuned,” Kositkze said. “These are opportunities to drive additional revenue. It could be the placement of cards  or making the most of the fact that 9 out of 10 people are buying other gifts are the same time they’re buying gift cards. That’s a perfect chance to build loyalty¹.”

The report found several common denominators among the bottom 20 companies. For one, they were less likely to sell cards across all their devices and channels. Lower-ranked companies were also less likely to support gift card purchases in their app, which is a missed opportunity with younger users especially. But that wasn’t the only issue.

“The most concerning thing with the bottom 20, in some cases the assessors just were not able to fulfill the purchase,” Kositzke said. “They tried several times, probably more times than a customer would, and it doesn’t go through. ”

Issues in the gift card experience can be costly because it can be a customers’ first impression of a company.

“A gift card often kicks off a customer’s relationship with your brand,” Hirschfield said. “It’s a challenging, but also an amazing opportunity, because many times the gift card leads to additional purchases of both your material items and more gift cards.”

Best Practices of Top Performers

One of the key differentiators for the top performers in the benchmark report was a dedicated gifting section on their website and app.

“All the top-performing brands had a clear path to gift cards,” Spidaliere said. “It was clear what customers needed to do, how to personalize, all the ways they could buy the card. The best-performing brands promoted their cards on multiple places on their site, and marketed their program outside of the website and app.”

Top-tier gift programs used social media and emails to attract new customers. Those merchants  also found innovative ways to offer personalization, like giving buyers the ability to upload a photo or video to accompany the card. Top-ranked programs also connected their gift card programs to their loyalty programs to incentivize gift card purchases.

“The recommendation here is to get creative,” Spidaliere said. “Align your promotions to what’s most important to your brand. The top performers had recipient experiences that were really thoughtful and considered both the recipient and the buyer. What’s meaningful to your customers? For instance, you could consider a partnership with other brands that are important to your customers and produce a co-branded promotion that leverages both audiences.”

Key Takeaways

The 2024 evaluation offers clear takeaways merchants can use to identify untapped opportunities for their gift card program –

Companies should continuously strive to raise awareness of their program, prioritize creating an optimal customer experience with a mobile-first approach, and consider offering options for gift card personalization.

Integrating loyalty programs with gift card programs is another best practice. Companies should explore opportunities to sell and redeem gift cards across all customer touchpoints.  A great gift card program also requires the ability to detect and prevent fraud `, often requiring a partnership with a third-party expert.

Finally, functionality should be the top priority. Companies should regularly evaluate their gift card programs through the eyes of the customer to ensure seamless processes. This approach not only ensures efficiency but also helps identify opportunities for improvement and ways to differentiate the program. Company websites should include site search keywords that make it easier for customers to find gift cards.

“Gift cards pay off,” Hirschfield said. “It’s an easy and low-cost way to turn someone from a stranger to your business into not only a loyal consumer, but an advocate for your brand.”

Source: ^1. BHN EQ Global Spring Gifting Study, n=2,019 US consumers 18+, Feb 2024

Learn more about  this year’s Benchmark Report: 2024 Digital Gift Card Leaders, conducted by NAPCO Research in partnership with BHN.

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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.

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 with consumers or employees. It tells the employee “we value you.” 

“Many buyers do not realize that there can be an economic benefit to buy through an aggregator, or through a brand’s website,” Niedbalski said. “In many cases, they will not only get a discount for that purchase but also build a strategic relationship with the brand, where there could be additional cobranded opportunities and synergies for the two companies to leverage.” 

Consumers Are Controlling Digital

According to the research, 40% of consumers will receive some sort of incentive this year. 

“When we look on the buyer side for the B2B side of the equation as opposed to the B2C side, that’s where the digital’s coming in,” Hirschfield said. “On the buyer side, 60% of purchases are digital, which makes sense, because around 70% of the recipients prefer that.” 

But the survey found that 39% of buyers are still giving out physical cards, even though 46% of them preferred digital. On the consumer side, the individual will control that relationship. 

Niedbalski noted that Fiserv is seeing use cases evolve because digital enables integration into various distribution vehicles. “Brands are now using this platform not only for loyalty but for rebates, for warranties, for specific product couponing, and for customer appeasement,” he said. “And of course you’ve got the foundation of a giftable program as well, where the card just remains a gift.”

Everything’s Digital

Everything seems to be moving to a digital format, whether it’s credit cards, library cards, gift cards, or loyalty cards. Wallets, like George Costanza’s in the famous Seinfeld episode, have gotten too stretched to carry around those cards in a physical format. 

“But even our digital wallets are also starting to get overcrowded in some sense,” Niedbalski said. “With Google Wallet and Apple Wallet, we’re seeing a lot more brands invest in their own vaulting solutions. They’re creating branded apps to drive consumer engagement. The convergence of all their payments along with their loyalty programs into a branded wallet could prove to be a pivotal point for adoption of digital both at the consumer level as well as the merchant level.”

Since the pandemic, brands have reprioritized their consumer engagement model. Although they still want foot traffic in their stores, they’re seeing a lot more traffic outside of their stores, whether it’s via curbside drive-through, delivery, or online shopping. How do you maintain personal engagement with a consumer virtually? 

Many brands are dealing with this by bringing the in-store experience into a mobile environment. “They need to provide enough value within their app to keep the customer clicking that icon on their mobile phone,” Niedbalski said. “A lot of these use cases are being integrated in a way that makes it easy for brands to connect with their buyers and with their consumers.  Along the way, it’s driving convenience and value.”

A virtual card has another value over a physical card: It is easier to use, even in impromptu shopping situations. “I’ve got a stack of probably 20 to 30 gift cards sitting at home on my on my office desk,” Niedbalski said. “Some of those gift cards are 20 years old and still have value on them. I’ve never redeemed them because I’ve got too many cards. I can’t carry these around with me every day. With digital, you are able to access your gift cards on demand anywhere, anytime, which helps drive that redemption of those gift cards.”

In modern society, our phones are always with us, which means that our digital wallets are always with us. For many people, their phone is their wallet. “Last week I was traveling, and when I got to the airport, I realized I forgot my wallet at home,” Niedbalski said. “I had no credit cards, no driver’s license, and I’m already trying to figure out how to get through airport security without an ID. Luckily, I was able to pull up my driver’s license through the DMV app for California. I was able to pay for my hotel and my meals using my Apple wallet and the credit cards that I had stored in there. Airline tickets, hotel reservations, loyalty programs, everything I needed was there. I would panic more not having my phone than not having my wallet.”

Learn More About Fiserv Stored Value and Loyalty.

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You’re given a gift card, but when you attempt to use it, you find it has zero balance. While you might be the butt of a bad joke, you and the card’s purchaser could be the victims of an increasingly prevalent form of gift card fraud called “card draining.”

Bad actors visit retailers and pilfer gift cards. They remove the packaging to access the card’s number and pin, which they either record or alter. Then they repackage the gift card and return it to the rack. When the card is legitimately purchased and loaded, fraudsters can easily siphon off the funds.

Initially considered to be a small-scale problem, card draining scams have spiraled into an epidemic that has drawn the attention of federal law enforcement. The U.S. Department of Homeland Security just launched a massive operation targeting a card draining ring with ties to Chinese organized crime. In the past 18 months, the Homeland Security task force has arrested 100 individuals involved in card draining. The agent in charge of the task force, Adam Parks, estimates there are still another 1,000 people involved. Parks speculated that scammers have drained hundreds of millions of dollars to date.

A Change in Regulations

As hard as it is to apprehend card drainers, it can be even harder to prosecute them. Jordan Hirschfield, Director of Prepaid for Javelin Strategy and Research, discussed those difficulties in his recent report, Mitigating Risk in Prepaid Card Programs. “Federal authorities utilize any existing statutes they can to investigate and prosecute organized criminal rings,” he noted. “These statutes are often adjacent to the actual payments, and fall under unauthorized computer access, once balances are drained online.”

That lack of relevant statutes is another stumbling block to shutting down card draining schemes.

A Steep Cost

One victory for the Homeland Security team came in late 2023, when a Canadian man was convicted for running a card draining scheme valued at $22 million. While it was a win for law enforcement, it underscores the massive dollar amounts card scammers have been able to drain.

Gift card fraud impacts both companies and consumers. Target leadership estimated that $300 million has been stolen from its customers in card draining scams. Walmart and Apple have both been sued after customers found their gift cards drained. Apple agreed to a $1.8 million settlement in January after a class-action lawsuit.

“Moving forward, regulations should be updated to reflect the technological advances of prepaid cards, both physical and digital, to keep up with criminal activity,” Hirschfield noted.

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The next big development for the gift card industry could well be online gaming. While retail and dining continue to dominate as the top two categories for gift cards, online gaming has emerged as a solid third contender and is poised for further growth. The vast majority of consumers who bought their first online cards this year said they plan to do more in this space.

That’s according to Clover’s Q1 Gift Card Gauge survey, which polled 1,000 U.S. consumers on their gift card purchasing patterns. Clover is the point-of-sale and business management platform from Fiserv.

Key Findings

In 2023, nearly a third of respondents bought gaming gift cards, surpassing both the health & wellness (25%) and hospitality (21%) industries for the first time. What’s more, a whopping 84% of those who bought online gaming gift cards for the first time last year said they plan to do so again.

The online gaming market seemed to reach an inflection point during the pandemic, particularly as many Americans began working from home. Gift card spending on gaming increased in both 2019 and 2020, with consumers who bought gaming gift cards purchasing 70% more gift cards per quarter compared to the previous year.

Retail stores and restaurants remain the most popular areas in this space, with 57% and 52% of respondents purchasing gift cards in these categories, respectively.  

Marking Milestones

Clover’s survey confirms that milestone events remain the biggest driver of gift card purchases. It revealed that 56% of consumers are planning to purchase a card in 2024 for milestone events. The most frequently cited events include weddings (36%), anniversaries (35%), and new family additions (31%).

The survey also found that digital wallets are an increasingly popular option, with 60% of respondents saying they plan to use them more in 2024. “The growth in digital wallets remains incredibly important given the industry and consumer trends,” said Jordan Hirschfield, Director, Prepaid Payments for Javelin Strategy & Research. “At Javelin we see a significant growth in moving from physical cards to digital cards, resulting in the market moving from 30% digital currently to 50% by the end of the decade.”

One counterintuitive result from the study was that consumers were slightly more likely to forget about using the balance on a virtual card than they are on a traditional one. While 41% of respondents said they had forgotten about a physical card, 39% said the same about a virtual card.

Hirschfield notes that there is an upside to this for the card issuers. “Unused balances highlight the opportunity to use balances and self-use stored-value accounts as constant touch points with consumers,” he said. “These allow for cyclical investment in prepaid stored-value accounts that rise from forgotten balances to revolving, loyal use items.” 

The post Online Gaming Is Driving the Gift Card Spend appeared first on PaymentsJournal.

Receiving gift cards spurs consumers to make purchases of higher value, exceeding the card’s initial worth. That’s one key finding from the State of the Nation 2024 research conducted by the UK’s Gift Card & Voucher Association (GCVA) and Global Data, further affirming the notion that gift cards encourage shoppers to spend more money.

The study reveals that more than two-thirds (68%) of respondents who redeemed their cards in the past 12 months ended up spending more than the card’s value. Specifically, 43% spent an average of £10 beyond the £30value of the gift card, an increase of 33%.

These gift card spending patterns have also taken hold in the U.S.

“The data that GVCA has collected on spending aligns with data Javelin collects in our annual survey of U.S. consumers,” said Jordan Hirschfield, Director of Prepaid in Javelin Strategy & Research. “Javelin shows that not only will card spending result in increased spend and splurges, but will also help draw consumers back into retail locations. The power of retail gift cards creates this triple threat of additional spending, more profitable spending and increased traffic.”

Bigger Spending Among the Young

The GCVA study broke down gift card spending patterns across different generations. Millennials ranked at the head of the pack when it comes to surpassing the value of their cards. Within this cohort, 36% spent an average of £10 more than the card’s value, while 34% spent at least an additional £30. The desire to spend beyond the card’s value was lowest among Baby Boomers, with only 17% of this group spending an additional £30 or more. Gen Z fell somewhat in the middle, with 24% making additional purchases.

This tracks with earlier findings that younger generations are more receptive to gift cards. Javelin research has found that among Gen Z and millennials, 20% of their total populations intended to buy more cards than they had in the previous 12 months. Only 9% and 6% of those in Gex X and Baby Boomer generations, respectively, intended to purchase more.

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Shell is facing a class action lawsuit in California, alleging its gas stations have charged customers using a prepaid Shell gift card the credit card price instead of the cash price. What the suit really asks is, are prepaid cards more akin to cash, or more akin to credit cards?

It is understandable that consumers might not see any difference between a gift card and cash. The California civil code requires that any gift card sold after January 1, 1997, can be redeemed for its cash value—and the law also stipulates that a gift card cannot contain a service fee.  California also requires that a gift certificate with a cash value of less than $10 is redeemable for cash.

Given that, the lawsuit claims that gift cards should be valid for the cash price at Shell gas stations. But the extra charges that some gas stations incur aren’t result of the “credit” part of the equation. They’re a result of the “card” part.

Swiping any type of card, whether it’s credit debit or prepaid, will always cost merchants extra. The cash discount arises from merchants trying to avoid those interchange fees. While the fees may be lower for debit or prepaid transactions, the station still has to pay them.

Other States Have Made This Clear

Other states have dealt with this issue more directly than California has. New Jersey law, for instance, states that a “retail dealer may sell similar fuels at different prices to cash and credit customers.” It also requires a “conspicuous sign … posting the price per gallon (or per gallon and per liter) reduction for cash purchases of fuels.”

A spokesperson for New Jersey Consumer Affairs clarified this practice to a reporter for NJ. Com. “Retailers often do not distinguish between debit or credit card purchases due to similar transactional processing fees, and therefore charge the credit card price on all such transactions,” she said. “N.J.A.C. 18:19-2.7 does not prohibit that practice.”

On the other hand, gas stations may benefit from a little sleight of hand in this area. Researchers have long known that issuers tend to see greater sales in stores where gift card purchases are eligible for rewards programs. In the specific case of Shell, holders of their credit cards also earn an immediate discount at the pump.

Customers may perceive that the stations are encouraging them to use gift cards, as opposed to cash. And given the consumer-friendly regulatory environment in California, it’s impossible to say the suit will fail. In the meantime, though, retailers that offer discounts for cash may wish to emphasize that it’s not credit cards that cost more—it’s cards of any kind.

The post Shell Lawsuit Asks: Is a Gift Card the Same as Cash? appeared first on PaymentsJournal.

Walmart’s fraud detection program, Redemption, has helped return $4 million from would-be gift card scammers since 2018. The proprietary technology anticipates when a gift card has been drained by a scammer, preventing a crime that is often impossible to otherwise rectify. But those proprietary concerns may prevent the program from being adopted or imitated by other retailers.

Redemption was developed after Walmart became aware of a trend of people being tricked into buying a Walmart gift card. The victims would typically get calls from scammers pretending to be a government agency or customer service representative. The victims were urged to load the cards with money, then divulge the PIN or gift card number.

Redemption uses an algorithm with “red flag” markers for gift card fraud and effectively stops those types of crimes during the transaction. Larry Lundeen, Senior Vice President of Global Security & Chief Security Officer at Walmart, told the Better Business Bureau that those flags are confidential to prevent scammers from figuring out how to beat them.

In most cases, it can be nearly impossible to recover the funds. But if Redemption intercepts the fraud, Walmart puts the funds into an escrow account. The U.S. Secret Service then works to return the funds to consumers through its Victim Witness Program. Calls to Walmart’s law enforcement response team are also down by more than half, according to Lundeen.

A Growing Problem

Walmart’s program arose after gift card scams threatened to spiral out of control a decade ago. According to the website TopClassActions.com, Walmart froze nearly $4 million in gift-card balances suspected to be part of fraudulent activity between 2016 and 2017. Last year, Walmart reported it was offering compensation of up to $4 million for affected customers who had bought a Walmart gift card between April 2016 and July 2017.

Walmart wants others in the industry to follow its lead, despite not sharing details of Redemption’s tactics. “This is not a competitive space with others,” Lundeen told BBB. “By collaborating with other retailers, law enforcement and associations, we are working to mitigate this industry-wide issue.” 

“Gift card scams represent a significant risk to consumers,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “Javelin research shows that nearly 20% of all U.S. consumers have been asked to buy a gift card as part of a victim-assisted fraud attempt, with 17% of those asked buying the card. What is staggering is the average value of those purchases, at $290 per person. Walmart’s program represents a positive step of retailers utilizing both technology and human capital to assist their customers in identifying these scams.”

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Disbursing funds in an efficient and accessible way is critical to a good customer experience. But new economic realities and mobile adoption have challenged organizations to evolve how they pay to meet consumer demands.

In a recent PaymentsJournal podcast, two experts from Blackhawk Network, Sarah Kositzke, Director of Research, and Scott Lapp, Director of Product Marketing and Incentives, along with Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the latest research on consumer payments preferences. The conversation focused on Blackhawk’s research into business-to-consumer disbursements.   

Defining the Terms

Disbursements are typically issued when a customer is owed a credit or refund. Examples include a property management company returning a security deposit, or an airline handing out compensation because a flight was canceled. Blackhawk wanted to better understand customers’ payment preferences, specifically in terms of their banking classification —whether unbanked, underbanked, or fully banked.

According to the FDIC¹, the fully banked—representing 80% of U.S. households—have established relationships with banks and use them for all types of services. About 5% of U.S. households are unbanked, meaning they do not have any established relationship with a bank. The remaining households are underbanked: They have a checking and/or savings account with a bank but also leverage other nonbank transactions, like those through rent-to-own services, payday loans, pawn shop loans, and tax refund anticipation loans. They are likely to be 34 and under, Black or Hispanic, have a high school education or less, and have a household income of $50,000 or less.  

Strong Feelings About Printed Checks

One of the strongest results from Blackhawk’s research was consumers’ antipathy toward physical checks. Nearly three-quarters of those in unbanked and underbanked households said they were frustrated by receiving a paper check. But nearly half (48%) of the fully banked households are also frustrated by receiving a paper check.   

Much of the frustration around checks is that they are a small but real burden.. “Even to deposit a check via mobile phone, you have to set aside time to do that,” Lapp said. “If you’re not using mobile banking, then you have to find a bank or an ATM. Sometimes the person needs to go to the issuing bank, and if there is no local branch, they may have to go to a check-cashing place, which means paying check-cashing fees. And depending on the size of the disbursement, there can be a hold time on those funds.”

According to Hirschfield, Javelin’s research shows that 92% of adults have a checking account. “But even with those checking accounts, most of the money is moved in a card-based or digital format,” Hirschfield said. “Even as they’re making payments, not just receiving payments, they want to use a non-paper-based method.”

Payments You Can Feel Good About

People are most excited about disbursement payments that are flexible and convenient—and that encourage them to splurge. The most popular methods include physical and digital gift cards; payments through vehicles like Venmo, PayPal, and Cash App; or directly deposited funds. 

“We asked people about their ‘emotional payment connections,’ which is not something usually under consideration when sending a payment,” Kositzke said. “When selecting a physical or digital prepaid card from Visa or Mastercard, or a merchant gift card, these are viewed as treats that allow people to splurge on things they want. It’s splurging for the new dress, shoes, books, a night out. Other payment types, like a paper check, direct deposit, Venmo or Cash App were seen as a way to pay for things they need, like rent.”

Blackhawk found that gift card recipients often plan to spend more than the value of the gift card. If they receive a card valued at $50, on average they will spend nearly $60 beyond the value. If they receive a card valued at $500, they will spend slightly more than $100 beyond the value on the card.

“We agree from our own research that gift cards prompt additional spending,” Hirschfield said. “About 40% of consumers will generally spend more than they typically would when using a gift card, and 25% will generally purchase a more expensive item than they normally purchase.” 

Physical or Digital

Blackhawk also asked customers whether they preferred a physical or digital disbursement. Fully banked customers split 50-50 on whether they would prefer a physical payment, but two-thirds of the unbanked and underbanked respondents preferred digital delivery. If the value of the payment is close to or more than $200, most people prefer digital delivery. Javelin’s research shows that although volumes are significantly lower on digital cards, which make up 28% of all cards, the average load values are significantly higher, at $115 versus $95 for physical cards. 

The least desired form of disbursement, according to Blackhawk’s research, is a bill credit. Bill credits are often viewed as simply a way to pay for things. If the person is not paying close attention to the monthly statement or credit card bill, the credit may not even be noticed.  

People were also surprisingly open to sacrificing some of the funds to receive their payment faster, especially among the underbanked population. Nearly a third of underbanked people were willing to give up between 1% and 3% of that payment to receive it faster. The fully banked were less enthusiastic, but 13% were willing to sacrifice at least 1% of those funds to get it faster.

Key Takeaways

Behavioral factors should never be dismissed by those working with disbursements. It’s critical to understand whether your payment is likely to be considered a reward or a treat, and those notions can be reinforced by issuing something like a prepaid gift card. People will likely splurge with that payment type, spending up to twice the card’s value.

It’s also important to consider the friction that printed checks cause, even for the fully banked. And keep in mind that bill credits are the least desired form of payment. “Emotional payment connections” may be largely overlooked factors in disbursements, but they can have a huge effect on how those payments are used once they are received.

¹Source: Federal Deposit Insurance Corporation (FDIC), 2021 FDIC National Survey of Unbanked and Under-banked Households (October 2022)

To learn more, download the eBook: B2C Payment Preferences: How people want to receive payments

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The post Digging Deep into Consumer Preferences for Disbursements appeared first on PaymentsJournal.

Apple agreed this week to settle a lawsuit that was filed in 2020 over its gift cards. One of the key issues was not just that consumers lost the value of their gift cards due to fraud, but that Apple offered minimal or nonexistent help to victims of the scam.

According to the Apple news site 9to5Mac, the criminals in the newly settled suit would pose as IRS agents when committing the fraud. In recent years, though, there have been many flavors of scams that have centered around Apple gift cards. Despite the resolution of this suit, there are reasons to think that Apple gift cards will continue to be problematic.  

In the world of gift card fraud, Apple stands out for many reasons. As a very well-known consumer brand that sells many big-ticket items, it’s a popular choice not just for holiday gift cards but cards with amounts in the $100 or $200 range. And Apple items are fairly easy to resell for significant amounts of money.

A Wide Variety of Scams

Some of the Apple scams include:

• Victims receive a call from someone claiming to work for the IRS and are told that they owe additional monies on their taxes. The victims are told they can pay off their debt with Apple gift cards.
• Scammers take photos or write down the card number from a gift card on a rack in a store. They use that number to purchase Apple goods. The person who ends up buying the card subsequently discovers that the balance has already been spent.
• Criminals have sent emails to Apple users saying that their Apple account has been suspended after the company “recently failed to validate your card information.” These phishing attacks attempt to retrieve gift card numbers from unsuspecting victims.

Compounding the problem, Apple has been accused of not doing enough to safeguard customers who have purchased compromised Apple gift cards in-store, or who have been scammed after a purchase. According to the lawsuit, Apple told scam victims that there was nothing the company could do once the money was spent, since it maintains a no-refund policy for gift cards. In June 2022, a judge rejected Apple’s appeal to dismiss the current suit, noting that the company had not done nearly enough to help the victims of gift card fraud.

No Relief

In one instance, a New Jersey man bought $500 worth of Apple gift cards at Target, only to find that all ten cards had been drained of funds. Apple said it could tell the cards had been compromised within five to 30 minutes after they had been activated at Target. But neither Apple nor Target was willing to reimburse the individual for the financial loss. Retailers often deny responsibility for reimbursing fraud victims, claiming that Apple is the responsible party.

Despite the settlement, there could be more claims against Apple in the offing, as gift cards become more popular. The Better Business Bureau revealed a 50% increase in gift card fraud reported to its BBB Scam Tracker over the previous year.

The post The Problems Aren’t Over for Apple Gift Cards appeared first on PaymentsJournal.

Retailers are learning that they can use prepaid cards as a personalized product, which opens up many opportunities for the issuers. That’s just one of the many trends Javelin Strategy & Research expects to unfold next year.

Gift cards are generally an anonymous product, but companies have learned that digitizing them can result in much more personalization. If issuers make a prepaid card digital, it can be the trigger point for much fuller engagement. Once you digitize that gift card, issuers can track where the funds are spent and what gets bought.

The Rise of Gift Cards

Retailers already know a lot about their customers through their loyalty accounts. They know if someone normally buys standard-priced items at Target but uses a gift card to buy a luxury item.

“People with gift cards often use them differently from standard payment methods,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research and the author of the recent 2024 Trends and Predictions: Prepaid Payments report. “There’s a great deal of data that stores can glean from that.”

There’s a similar dynamic at play with prepaid cards that aren’t retail-related, such as health savings account (HSA) or flexible savings account (FSA) cards. Digitizing them allows the issuer to know where and when that money is being spent and get greater interaction with the card’s constituency.

Building on that user engagement is a trend that is likely to take off. Javelin’s research shows that a little less than 30% of prepaid cards are digital right now, but that figure is expected to rise to 50% by the end of the decade.

“Our recommendation is that when you use prepaid to engage your audience, give them the incentive to digitize it to make it a more personal tool,” Hirschfield said. “Let’s say you’re at your local drugstore to buy a greeting card and the gift cards are right there. Right now, it’s so easy to put the gift card into the greeting card, but I think we’ll see new ways to digitize that. You might have a code to scan and then enter a phone number and email address, but it’s not going to be a physical card.”

Digitizing also helps with safety and security issues. When a card is digitized, it becomes much easier to protect from many of the current theft and fraud issues. Digitized cards are susceptible to large-scale IT security issues, but physical cards fall victim to a range of criminal activity, including organized crime and petty theft.

For HSA and FSA and other non-gift prepaid cards, lost card replacement becomes less of an issue when they’re digitized. Issuers can also save on the physical cost of producing and mailing the cards.

California came very close to banning plastic retail gift cards this year, simply to cut down on the environmental impact of all that single-use plastic. The governor vetoed the measure, over concerns about how it would affect small businesses. But that type of legislation is likely to come back at some point. Future prepaid cards could be constructed out of recycled materials or cardboard, but no one wants to start producing different stock of gift cards for different states to comply with local laws. Digital cards make a lot more sense.

Taking Advantage of Shifting Liability

Another trend Javelin anticipates concerns the back-end, technical methods of how gift cards are used. When a gift card is purchased, a liability is created from the retailer’s perspective. Its accounting statements have to reflect that it has a certain number of unused gift cards, totaling a certain dollar amount, on the market.

These cards are a liability until they’re used, at which point the transaction turns them into revenue. Until then, a card is simply a promise to pay. Some upstart groups have been taking on that liability, selling the gift card and holding the liability as a third party. This allows the merchant to enjoy the revenue from the gift cards without carrying the liability, which lets them employ different financial planning strategies for those assets.

Distressed retailers may want to assure their customers that if they buy a gift card, it will still have value even if the stores go under. When Bed Bath & Beyond entered Chapter 11 bankruptcy, its gift cards were unsecured liabilities and one of the first things that got wiped away in the bankruptcy. They were worthless.

It offers a great deal of financial flexibility if a retailer can say another company holds that liability. If the company goes under, you can transfer that credit, in a sense, to another organization.

Multi-Retailer Cards

Multi-retailer cards, which present great marketing opportunities, are another growing trend.

“There could be a dinner-and-a-movie card, combining a movie theater chain with a restaurant chain, and the buyer can use it at both,” Hirschfield said. “These themed cards match the desire of both givers and receivers and gift cards. According to our research, givers of gift cards enjoy retail gift cards because it feels more personal.”

But receivers of gift cards want Visa and Mastercard gift cards because they want to choose what they use the cards for. These multi-brand cards offer a more personal gift for the giver and more choice for the recipient. Hirschfield expects the multi-brand cards to grow at a stronger pace than the regular cards.

Prepaid is a payment sector that is battle-tested through any kind of economy. Some are up and down depending on how the economy goes, but overall, Hirschfield sees a resilient set of products designed to withstand any kind of turmoil.

“People are worried that inflation is going to stop people from shopping, and that will impact gift cards,” Hirschfield said. “But we have found that both gift cards and general shopping habits aren’t affected by inflationary pressures. Most people spend that gift card within 30 days. There’s a fallacy that gift cards sit unused for months, but in general, our research shows that people are going to spend more than that gift card is worth within one month and generally in one visit.

“That stability is going to be a benefit to really across the payments infrastructure because people will be able to plan better. Combined with strategies like digitizing and creating better loyalty platforms, issuers can make sure that people do use their cards in a less anonymous way.”

The post Digitization and Multi-Brand Cards: Prepaid Trends to Watch in 2024 appeared first on PaymentsJournal.