Has the Age of Plastic Gift Cards Ended?

by Ben Jackson 0

The last holiday season may have been thetipping point for virtual gift cards. InComm, a prepaiddistribution company, said that the gift card issuers it partnerswith saw digital gift card sales outpace physical gift cards,according to a report in CSP magazine.

Citing numbers from the Portland, Ore.,company Giftango that InComm acquired last year, [Matt Merker,InComm’s national sales director] said that for the first timeever, the purchase of digital gift cards over the Dec. 2013 holidaytime frame outpaced physical cards 57% to 43% among Giftango cardissuers. It’s a trend that will only continue to gain momentum, hesaid.
Granted, InComm’s issuers are a subset of the whole industry, butMercator Advisory Group has expected that virtual cards would reacha tipping point once enough gift givers began to take advantage oftheir convenience and speed of delivery. The question remains,though, was 2013 really a tipping point for virtual cards?

To answer this question and more general questions about the growthof the closed-loop prepaid market in 2013, Mercator Advisory Grouphas begun its annual survey of issuers.

Recognizing that the one thing that every gift card manager cravesis information, Mercator is reaching out to closed-loop issuers tocreate a market size estimate and learn about the volume that flowsthrough different distribution channels and form factors.

The goals of the research, as always, are to provide you withinformation to help you be successful and to give the industry asense of the big picture.

This year Mercator has made some changes in our approach to thissurvey to make it easier to complete.

1. The survey is shorter-only seven dataquestions.
2. To give value back to the respondents, we will hold a Webinarfor everyone who responds so that they can see and discuss theresults of the survey.

As always, confidentiality is our highest priority, and the datacollected will only be used to produce aggregate numbers.Individual issuer data will not be revealed by Mercator AdvisoryGroup.

In the past, retailers have expressed concern about the security ofthe survey. We are using an online survey at the following link: https://www.surveygizmo.com/s3/1187309/2014-U-S-Closed-Loop-Issuers-Survey-Calendar-Year-2013

To protect the data, Mercator is working with a third-party surveycompany to host the survey. The following security measures are inplace.

HTTPS means there is a secure socket layer protecting the data.Survey Gizmo, the site provider, has the following security inplace:

1. PCI Compliance
2. Advanced Encryption Standard-256 bit encryption
3. MySQL database cluster
4. Reviewed by Applied Trust (a third-party), scanned by McAfee andHackerSafe for viruses and rootkits
5. Servers managed by Via West in Denver in securefacility

The questions on this survey are designed to answer questions thatMercator Advisory Group has been asked by the industry. Thesequestions will help issuers find the answers they need for businessplanning, educating clients and partners, and communicating withthe media and the government.

The plan is to gather all the responses by March 1, 2014 andpresent the analysis to respondents by mid-March.

Please contact me, Ben Jackson, with any suggestions, complaints,or questions! My direct line is 781-419-1706.

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