Virtual gift card provider CashStar Inc. says that it plans to offer a mobile phone application that would let users buy closed-loop gift cards from merchants using rewards points from banks. The application would let users receive the card on their phones.
Users can choose the brand they want. The app then generates a bar code that can be scanned at any of that brand’s stores. In cases where the merchant doesn’t have a scanner at checkout, the clerk can key in a 16-digit number that appears with the bar code.
The application could increase customer satisfaction with rewards programs in general. Financial institutions may now be a tougher sell because of the loss of revenues from the Durbin Amendment.