Payment platforms and fintech businesses are acquiring gift card platforms to drive growth

Payment platforms and fintech businesses are acquiring gift card platforms to drive growth

Payment platforms and fintech businesses are acquiring gift card platforms to drive growth

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Most consumers are always looking for instant gratification and gift cards are the ultimate tool that several fintechs are banking on to see an increase in sales. With this technology at their fingertips, payment and fintech platforms are strategizing to acquire gift card platforms to witness business growth. For instance,

  • In October 2022, a payments technology company, InComm Payments, announced the acquisition of an Australian gift card provider, The Card Network (TCN). Since The Card Network specializes in creatively themed, multi-brand gift cards, InComm Payments strategized to acquire it to enter into the personalized gift card products space to attract more customers.

Notably, personalized gift cards are highly demanded by customers, which TCN had been delivering to both the gift giver and their recipient since 2019. Consequently, InComm Payments partnered with this multi-brand gift card platform to provide momentum to support its business growth.

TCN has designed its products in a very unique manner; its multi-brand gift card product aggregates major consumer brands in a single card, which offers greater flexibility and choice to the recipient. TCN’s gift card product line comprises multiple creative themes namely, The Active Card, The Home Card, and many more. While The Active Card can be redeemed at many sporting apparel retailers, The Home Card can be used at several homeware stores.

The Australian gift card provider not only sells gift cards online through their website but also through many retailers in the country. TCN has been attracting its customers through personalized gift card packages along with a customized photo or video messages. Together with consumer-facing products, TCN also offers other gift products for Australian companies such as for incentive purposes, loyalty and rewards-related programs, and also for business-to-business (B2B) gifting purposes. TCN, which has grown its client base for a long time, will now be accessed by InComm Payments and thus, will help in further growing its business in Australia. 

It is not the first time InComm Payments entered Australia. The firm had forged partnership with many brands in Australia and New Zealand since 2010. Consequently, PayNXT360 anticipates, this new strategy will further benefit the paytech platform by providing growth momentum over the longer run.

  • Another fintech platform, Pine Labs completed the merger deal with digital gift card start-up, Qwikcilver Solutions in September 2022. This merger, which was announced in 2019, has now finally completed the documentation work. Consequently, from now onwards, Qwikcilver will be considered the sole business entity of Pine Labs.

Post-merger, all the prepaid payment instruments (PPIs) of Qwikcilver will be issued by Pine Labs in Qwikcilver’s name while all of its products, programs platforms, etc. will continue to operate as usual. Qwikcilver has been operating in India, Southeast Asia, Australia, and the Middle East, as a prepaid and gift card provider and helped several companies to improve sales, retain customers, and thus drive growth in businesses. Consequently, PayNXT360 expects, this acquisition will enable Pine Labs to secure a strong position in the fintech space over the longer run.

High profitability, return on investment and long-term customer value of gift cards, when they’re used in loyalty programs are considered to be substantial. Generally, a consumer tends to spend more than the card’s value, and thus, promotions using prepaid cards or gift cards are more fruitful than promotions using discounts or coupons. Consequently, several gift card platforms are acquiring customer relationship management (CRM) marketing services firms to expand customer relationship management platforms. For instance,

  • In February 2022, a Toronto-based gift card platform for restaurant, and retail businesses, Givex, acquired Loyalty Lane, an online transaction processing and CRM marketing services firm.

Loyalty Lane is a SaaS-based platform that helps retailers elevate the customer experience by capturing point-of-sale data, at the same time gives the shoppers “rewards” for points or other promotions during their check-out. Consequently, this capability will now be used by Givex to serve its other sectors such as grocery, fuel pump, convenience store, and other consumer channels in the United States and Canada. Importantly, Loyalty Lane provides a CRM solution for groceries that Givex does not have at present. Furthermore, this acquisition will help it to offer additional services to the around 11 million consumers of Loyalty Lane over the longer run.

Givex’s offerings, at present are used in around 96,000 locations in about 100 countries. Thus, integration with Georgia-based Loyalty Lane will help Givex to increase overall merchant locations, and also revenue. Consequently, PayNXT360 anticipates, through Loyalty Lane’s capability, Givex will be able to generate significant revenue over the next four to eight quarters in the region.

  • In January 2022, a payment processing provider, Paystone, acquired CPS, a provider of merchant services, offering gift card and loyalty programs. Notably, Paystone, whose product ranges from customer loyalty solutions, gift card solutions, and automated payment processing, etc. claimed that this acquisition is the largest they have made to date.

According to Paystone, its technology is currently used at around 35,000 locations across Canada and the United States. Now, with this new integration, PayNXT360 expects Paystone will strengthen its position in the market fuelling further business expansions and acquisitions.

While several fintech platforms have been acquiring gift card platforms to get a share of the growing market, greeting card companies are also diving into the gift card space. For instance,

  • In May 2022, a United Kingdom-based greeting card company, Moonpig Group announced the acquisition of the entire issued share capital of the gifting platform, Buyagift for around US$156 million. Notably, this acquisition is Moonpig’s strategy to strengthen its position in the gift segment and digital delivery of gifts through gift cards, together with same-day delivery in the United Kingdom.

Importantly, post-acquisition, the 3.2 million customers of Buyagift, under its two brands, Buyagift and Red Letter, can now be accessed by Moonpig. On the other hand, Buyagift also sees itself reaping benefits from the significant potential of cross-selling to Moonpig Group’s customer base. Consequently, PayNXT360 expects this acquisition to be a win-win situation for both parties.

To know more and gain a deeper understanding of the global gift card market, click here.

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