Gift cards are here to stay – according to 2017 statistics from the National Retail Federation (NRF), more than $130 billion was spent on gift cards, and they were the most requested gift for the eleventh year in a row. For those in the payments, cards, and associated processing industries, the growing popularity of gift cards impacts the way they do need to operate to keep pace with merchant and consumer needs. Here are some of the latest top trends that new technology is driving the gift card industry:
Digital Over Plastic
Gift cards as a whole continue to grow, but there’s a major preference in demand for digital gift cards over physical gift. Digital gift cards have grown 200% annual, compared to the 6% annual growth of physical gift cards. The benefits include saving on production costs and providing more opportunities for merchants to collect data, but also means that processors will need to be prepared to effectively distribute and troubleshoot issues that come with digital-only cards.
To further improve the sales of gift cards throughout the year, more merchants are offering incentives for customers who purchase gift cards. 78% of consumers surveyed they would be more likely to buy gift cards for themselves if they received a discount, according to 2016 research from Blackhawk Network. This has resulted in a growing need to process gift card transactions that include a bonus card, such as a free $5 gift card with the purchase of a $50 gift card. In turn, processing companies may have to be ready to use technology to automatically generate and carefully track these bundled transactions.
Gift cards have become a prime target for fraudsters. Due to the lost opportunity of more stringent financial regulations on large amounts of money and chip-enabled credit and debit cards, thieves are turning to gift cards to commit fraud, such as utilizing bots to scan for gift cards with balances, using payment information from stolen credit cards to purchase gift cards, or using gift cards for money laundering. Gift card processors will need to prioritize fraud detection as technology provides new opportunity for theft.
No matter the changing trends in the payments and cards industry, one best practice for success remains: hiring top talent to join your team. Find the most qualified candidates by working with a recruiting firm like IMPACT Payments Recruiting to target prospects and streamline the hiring process utilizing their industry backgrounds and network connections. Contact us today to learn more about our services.