10 Years of Digital

A decade of digital gift cards.

Date:Oct. 30, 2020

Let’s flash back to the summer of 2010. With online shopping starting to take root in the US – totaling just over 4% of retail sales – InComm Payments was helping many retailers expand online sales of physical gift cards. As the team worked on a project to improve the shopping experience for a major on-line retail partner, they were discussing the five to seven day delivery period and costly fulfillment logistics when a big idea hit – the partner could save time, space, labor and plastic if they could deliver the cards digitally. With that idea, digital gift cards were born.

 

The team pitched the idea of moving from physical to digital gift cards to another major retailer, who saw the benefits and potential. The first digital gift cards – for multiple wireless products – were rolled out on their e-commerce site in October 2010. While this was initially just a test run, any reservations were quickly quashed, as customer demand was immediately apparent. The delivery time for a digital gift card wasn’t instant yet – orders still took around an hour to process – but this was significantly faster than five-plus days for physical delivery. “Since we were experimenting, we left open the option for customers to order a physical or digital card,” said Karl Denzer, InComm Payments’ Senior Vice President of Emerging Technology. Customers spoke loudly, however, and the appeal of digital gift cards was overwhelming. “Within a few weeks, we went ahead removed the physical cards,” added Denzer. “Virtually all customers were choosing the convenience of digital gift cards.” 

 

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Mark Bellamy was a business leader for that major retail partner at that time. He, too, was unsure how customers would react to the new digital offerings. “There weren’t any comparables” said Bellamy. “But we quickly realized that consumers valued the simplicity and immediacy of this model, so we quickly set out to expand the program to cover all of the prepaid products we offered.” On the heels of this initial success, InComm Payments’ teams began working with brand partners to popularize digital gift cards.

 

First to Market, from Apple to Zenga

 

Consumers continued to prove that digital gift cards weren’t just a passing trend. Since first creating the products a decade ago, InComm Payments’ teams have led the way in helping brands and retailers create more revenue and meet customers’ evolving needs by providing a range of digital gift card options. Now a mainstay in virtual gifting, the first iTunes digital gift cards were launched online at Target.com in November 2012. Those innovative pioneers themselves, Apple, worked with InComm Payments to open new (figurative) doors with these cards. As a result of this and other digital innovations, Target named InComm Payments their Vendor of the Year in 2014.

 

Today, it seems impossible that digital gift cards weren’t widely available by the time everyone’s grandparents were on social media and smartphones were into their fourth generation. As digital gift cards continue to prove their worth for consumers, we’re doing our part to keep up with demand: InComm Payments’ B2C digital gift card programs now include over 35 merchants across 17 countries, with our teams constantly exploring avenues for brands and partners to efficiently and effectively add digital cards to their portfolios. And we’re continuously fine-tuning the process every step of the way. Here’s a quick snapshot comparing the digital gift card landscape then and now:

 

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The popularity of digital gift cards has steadily increased as their capabilities have continued to expand. Merchants are able to create online malls with no space limitations where customers can browse at their convenience, easily searching for and ordering the card that’s just right for their situation. Once they’re ready to purchase, customers benefit from nearly instant delivery, with no physical card to wait on or keep track of. Redemption has also been made easier with click to redeem and the ability to load to mobile wallets.  Click to redeem is a technology that InComm Payments brought to market in 2013 which enables consumers to simplify redemption; rather than manually inputting codes digit-by-digit or copy and pasting the information, this technology allows one-click redemptions to automatically apply the value of the card to a purchase.  

 

Digital cards have also had a significant environmental impact. In the last five years alone, InComm Payments’ B2C digital programs have saved over 925 tons of plastic.

 

What’s next

 

Ten years is a big milestone, but we’re more focused on the future than the past. Innovation is at our core, after all. Recent developments in digital gift cards have showcased even more convenient features that drive the in-store experience with personalized connections and omnichannel shopping. For example, through InComm Payments’ Shop Scan Pay platform, customers can use their phone to scan a QR code in-store and browse an online catalog of products, all of which can be paid for with a scan at checkout. Digital gift cards also provide avenues for customizable and personalized experiences, with offers that can be easily promoted, managed and executed. 

 

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These robust offers provide the most obvious, immediate room for expansion, with promotions able to be digitized and delivered at reduced cost. Promoting a digital card or reward as an incentive for making minimum or related purchases requires no additional inventory management or steps for customers to complete, just the automatic delivery of a digital gift card with qualifying purchases. For example, a gaming promotion can offer bonus in-game content with the purchase of a gaming gift card, or a digital content provider can offer an additional $10 in value when a customer makes a $100 gift card purchase. Cross-promotions are also in play – brands can partner to offer, say, a streaming music gift card with the purchase of headphones and a streaming account, or a $5 merchant gift card with the purchase of a bag of chips and twelve-pack of soda. It all leads to extremely flexible opportunities for brands and merchants – these digital promotions are limited only by their creativity.

 

“Being first to market with digital gift cards, the ‘click to redeem’ feature, and sales through mobile carrier platforms has helped InComm Payments reduce costs for brands and friction for consumers while expanding the global pre-paid market. We’re poised to continue innovating, keeping gift cards top-of-mind for consumers while bringing in more value for these products through promotions and new in-store digital programs.” – Karl Denzer, Senior Vice President of Emerging Technology, InComm Payments

 

It’s clear that digital gift cards aren’t going anywhere. Over the past ten years, the experience has only improved, and these cards have become even more valuable during the COVID-19 pandemic as consumers have reduced their physical interactions. Digital gift cards have helped people celebrate from afar, stave off boredom and reduce and consolidate trips to the store – all told, branded digital gift card purchases were up by 61% for the first two quarters of 2020. 

 

We created digital gift cards and have deep experience in helping merchants and brands launch their programs – our teams know how to plan, execute and promote these programs to maximize results. InComm Payments’ experts can help set up programs that drive in-store experiences and support e-commerce options, connecting consumers to the brands and retailers they love across all channels. The next ten years hold a lot of promise for digital gift cards, and we’re simultaneously innovating for then while delivering results now. 

 

Don’t wait another day to get your digital program up and running. Contact us below to learn more.