Digital gift cards have been available for many years, along with the ability to purchase gift cards via a website or smartphone app. What is different, is the ability to purchase a gift card directly from your account at a financial institution especially via a mobile app.
Chase checking account holders can now send digital gift cards for more than 60 top retailers through the Chase.com website or Chase Mobile app. The service allows users to send electronic gift payments of between $5 and $100 for free, using only the recipient’s email address, according to a press release. Chase said retailers and restaurants including Starbucks, The Home Depot, Panera and AMC Theaters are participating.
Financial Institutions will continuing to seek new product innovations for their client base, primarily as a form of customer retention. Not to say that products are not enhanced to attract new customers, but in this situation it is primarily a retention play. With that said, existing clients will appreciate the added convenience of being able to pay with the funds in their account, rather than a credit card or in-person using a debit card or cash.
“This was a new experience that we built for customers,” spokesperson Emily Schaefer told Mobile Payments Today via email. “We saw that a lot of transactions through QuickPay with Zelle had a memo indicating that the transaction was being used as a gift. “Schaefer said many of the memos in the Zelle payments included memos that said “congratulations” or “happy birthday.” Additionally, customers wanted a feature that would allow them to track scheduled gift payments and past transactions, prompting the bank to make digital gift cards available.
In this scenario the new person-to person (P2P) payment system offered by Zelle or Venmo – the first innovation, led to another – noticing that persons who use a P2P app send money not only to reimburse a friend, but for gifts and/or celebrations. I particularly like the idea of being able to schedule gift card purchases in advance, so as not to miss an important event.
Overview by Sue Brown, Director, Prepaid Advisory Service at Mercator Advisory Group
