Today’s prepaid card products have evolved far beyond simple gift cards, helping businesses to drive consumer spending while nurturing brand loyalty and building long-term customer relationships.
Despite the ongoing shift towards digital formats, many people still rely on physical gift cards. These individuals and businesses surprisingly visit storefronts to purchase gift cards, often buying hundreds of cards at a time. However, it's becoming increasingly clear that transitioning these bulk purchases to a digital distribution model can be simpler and more cost-effective.
With the rise of digital formats, the power now lies with the consumer
Currently, 40% of consumers are expected to receive some form of incentive card this year. Yet many buyers still distribute physical cards, even though a majority of their target group prefers digital.
Digital formats offer flexible integration into various distribution channels. Brands can use platforms to launch loyalty programs, rebates, specific product coupons, warranties, and customer appeasement. Plus, the gift card component remains, making it an enticing offer for consumers.
This digital transition isn't limited to gift cards or prepaid products – it extends to credit cards, library cards, and loyalty cards. There's now a growing trend for brands to create branded apps to drive customer engagement.
Brands are rethinking their customer engagement model
Physical storefronts are no longer the primary consumer engagement point. Brands now are bringing the in-store experience into a mobile environment to maintain personal engagement virtually. This not only drives convenience and value but also ensures that customers continue to interact with the brand's app.
In today’s digital society, our phones have essentially become our wallets. They carry not only our virtual cards but also our IDs, airline tickets, hotel reservations, and loyalty programs. Their omnipresence in our lives shows how much we've come to depend on digital convenience.
This is the future of payments, a future where everything is going digital.
To learn more, listen to the recent PaymentsJournal.com podcast The New Strategies Driving Digital Gift Cards. The discussion features Tom Niedbalski, VP Global Sales and Partnerships at Fiserv.
