In a move that solidifies the importance of the commercial prepaid space and the continuing shifts to digital platforms and payments, Blackhawk Network announced its intended acquisition of Tango Card, a pioneer in the digital incentives space. BHN CEO and President Talbott Roche noted the existing partnership when announcing the purchase:
“‘Tango pioneered the digital-first reward experience through its powerful API, coupled with world-class service and exceptional breadth of global content, making it the perfect complement to BHN’s global product portfolio,’ said Talbott Roche, CEO & president, BHN. ‘We have been a longtime partner to Tango and were also an early investor. We are thrilled with the opportunity to combine the best of BHN with the best of Tango to provide leading, global, scalable solutions and innovation to the rewards and incentives industry.’”
The move comes as the two pillars of Tango’s business model—incentives and digital—factor into significant growth areas in the prepaid market. BHN, which already had invested considerably in digital channels at the consumer and bulk levels, signifies to the market that continued investments in digital products will drive future business. This is consistent with Javelin’s 2024 Trends & Predictions: Prepaid Payments report, which predicted a movement to from the current approximate 70/30 physical; to digital split to an eventual 50/50 split by the end of the current decade.
While some of the movement comes from the need to be more environmentally conscious and decrease the use of plastics, the larger opportunity come from the buyer and user opportunity to digitize as much of the experience as possible. Focusing on digital card programs feeds into the growing consumer classes, led by digitally native consumer and creates other implicit benefits for sponsoring programs and consumers. As an incentive, a digital card eases the distribution to multiple recipients and also creates a better relationship between the end recipient, the incentive giver and the incentive card itself. For instance, a digital card attached to a loyalty program creates a linked relationship between both parties, allowing for better promotion, rewards, and messaging rather than a simple anonymous transaction. This remains true for gifts and self-use.
The combination of BHN and Tango also signifies the growth opportunity in the incentives market. The press release highlighted Tango’s 800% growth since equity investor FTV Capital invested in 2018. Javelin shares in the belief of continued incentive market growth. Both closed-loop and open-loop incentive markets shine as growth engines in the industry. The Javelin Prepaid Practice will provide more details in the upcoming U.S. Commercial Prepaid Market Forecast in February. Javelin believes that both consumer and employee incentives show better than average growth opportunities, with slightly better growth rates for consumer incentives as the employment marketplace continues to recon with economic challenges and functional issues such as return-to-office.
