First Data, a leader in payment technology and services solutions, has taken a key step to provide consumers with spending flexibility and help businesses grow through the acquisition of Gyft Inc., the Silicon Valley-based company that entered the $100 billion gift card market in 2012 and pioneered the concept of a mobile wallet for gift cards. Gyft is a digital platform that enables consumers to buy, send, manage, and redeem gift cards using mobile devices. Financial terms of the deal were not disclosed. The transaction is expected to close next month pending Gyft shareholders’ approval.
The power of Gyft is in the mutual benefit it provides to both consumers and merchants. As more consumers upload gift cards into mobile wallets on smartphones to check balances or receive offers and merchants seek new ways to nurture customer engagement, the gift card has been born again, digitally, through Gyft.
With more than 200 of the most recognized retailers on its digital gift card platform, Gyft is a mobile wallet accessible by website and as a free app on iPhone and Android devices. The company brings an active and loyal user base of demographic groups such as Millennials, who increasingly expect a highly personalized customer experience. Now, First Data’s clients, including its more than 300 national retail prepaid clients, will have access to this new and growing distribution channel to adopt the next level of gifting, expand their gift card footprint, and programs and add choice for consumers. In addition, to bring these new tools to small business owners who have adopted First Data’s Clover Station, an elegant touchscreen point-of-sale solution, Gyft for SMBs will be added to the Clover App Marketplace.
Virtual and mobile cards are gaining share rapidly in the near $100 billion U.S. gift card market. Retailers reported that, on average, loads onto digital cards tripled from 2012 to 2013, according to Mercator Advisory Group’s annual survey of retailers. First Data’s research shows that electronic gift card sales grew 71 percent from 2012 to 2013.
“Retailers need to begin tapping into digital distribution channels to be responsive to early-adopter customers and stay competitive for the long term,” says Ben Jackson, director of Mercator’s prepaid advisory service.
“Gyft, with its mobile gifting platform, and First Data, with its global scale and distribution network, together will accelerate the growth of virtual prepaid with powerful new tools for merchants of all sizes to deepen their relationships with their customers,” says Guy Chiarello, president of First Data. “This means that the same robust toolset deployed by big box retailers will be coming soon to small- to mid-sized businesses, perfectly synched with our mission to offer innovative solutions to help our clients grow.”
“We are joining First Data to accelerate our growth and significantly improve the gift card experience for both customers and retailers,” says Vinny Lingham, cofounder and chief executive officer of Gyft. “As a part of First Data’s suite of innovation-powered products, Gyft will be added to a portfolio of technology-driven gift solutions that link advanced consumer-engagement technology with point-of-sale business solutions.”
Gyft’s capabilities combined with First Data’s prepaid solutions creates a distinct combination in a rapidly growing market for virtual gift cards. Data analytics and management tools enable gift card merchants to send targeted, cost-effective, flexible campaigns directly to new demographic groups, opening new markets that were previously not easily accessible. Gyft’s social media platforms offer retailers meaningful customer interaction and real-time promotions that will drive revenue, encourage social sharing, and build brand awareness. Additionally, Gyft operates as a comprehensive engine for bulk gift card sales that can be used for incentive marketing and promotions by employers and businesses.