July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Square may have just landed a massive deal with Starbucks, but that’s not stopping the company from innovating. Today Square launched gift cards on the latest version of its Wallet app for the iPhone and Android, allowing you to send and use gift cards without carrying around a piece of plastic, reports the Next Web.

Given that the gift card market is estimated to be worth $100 billion annually, according to figures from TowerGroup, CouponTrade, it makes sense for Square to take a stab at it. If anything, it’s surprising that it’s taken the company so long to do so.

Additionally, Square also updated its Register app for merchants to accept its gift cards, as well as those from printed QR codes (the 2-d barcodes that are become increasingly common), and Apple’s Passbook, the company’s digital wallet included in iOS 6.

Square, which announced last month that it’s processing $10 billion in payments annually, is joining companies like Wrapp who are trying to popularize the digital gift market. After all, plastic gift cards have a lot of problems: They’re easy to lose, it’s hard to determine their value, and many people never end up using them. At the same time, gift cards remain a popular gift option in the U.S. Digital gift cards could solve many of those issues.

With gift cards, Square will also have a viral way to grow its business. Many consumers who may have never considered using Square’s digital wallet will install the app if they get a Square gift card. And it could lead to more Square usage at merchants, which could convince other store owners to jump about the Square bandwagon.

Square continues to step away from its iconic credit card reader dongle, which allows anyone to take credit card payments on their phones. But it’s moving yet closer to the future of payments, an idea that Square founder and chief executive Jack Dorsey (above, with Starbucks CEO Howard Schultz) has reiterated time and again.

San Francisco-based Square has raised more than $341 million in funding so far. Investors include Kleiner Perkins Caufield & Byers, Sequoia Capital, Citi Ventures, Rizvi Traverse Management, CrunchFund, and Starbucks.

Apple’s introduction of Passbook in iOS 6, an app that gathers loyalty cards, boarding passes, event tickets and coupons into a single virtual home, is sure to expedite the growth of digital gift cards.

While the majority of the discussion in mobile payments swirling around banks, credit card companies, phone providers and web-centric or social web companies, the true keys to adoption will be found in coupling of consumer and merchant benefits associated with digital gifts.

The ability to deliver a gift card to a mobile device instantly and have it work from the phone is rapidly expanding the utility of the traditional gift card. What was once a solution for gifting is now frequently leveraged as promotional or incentives tools. Many of the hottest mobile applications launched in recent years leverage a digital gift card. Groupon’s “Now!”, Wrapp’s gifts, Viggle’s rewards and Shopkick’s “kicks” all rely on the digital delivery of a promotional card that can be redeemed at a merchant’s point of sale.

Allowing a promotional card to persist from the iPhone’s Passbook makes the user experience even that much more appealing. With millions of digital gift cards already in circulation, eGift Cards may be a gateway to full mobile payments.

But in order to see it happen, here are a few things that iOS developers must know as they prepare to deliver digital gift cards and pass them in to Apple’s Passbook:

1. Leveraging the functionality a consumer will expect, like checking a balance or reloading a gift card, requires a connection to the merchant’s gift card processing platform. Don’t count on Passbook for this.
2. The presentation of a digital card requires a merchant’s consent. Don’t count on being able to make it look any way you wish.
3. There are plenty of consumer protection laws to be aware of, most notably the need to clearly communicate terms and conditions.
4. If the card needs to work from more than an iPhone, consider SMS delivery, email delivery and changing look and feel of the card based on the device the card is being viewed from (i.e. allow a consumer to print a physical version of the card).

Smartphones have already replaced our point and shoot cameras, clunky GPS devices, and outdated restaurant review guides. Consider what they can do for our wallets.

A working version of a mobile wallet will someday lead to consumers leaving the physical version of their wallet at home. And with it a new ecosystem of services and opportunities will emerge.

David Nelsen is the CEO and founder of Giftango, which focuses on electronic gift card delivery. Giftango will also be participating in the Money2020 conference next month, which includes participation from Google, PayPal, American Express, and others.  

Photo: Heather Kelly/VentureBeat

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

You’ve likely never heard of Giftango, but the provider of a digital gift card platform for retailers and businesses is becoming an increasingly essential company for mobile shopping and e-commerce. Today the company announced that Shopkick, makers of the mobile shopping app that rewards you for walking into stores, has chosen Giftango to power its new digital gift card offering.

Giftango offers a streamlined way for companies to tap into retailer gift card programs — allowing them to access gift card data within apps and other services. Basically, Giftango is powering the move away from traditional gift cards, which can get lost or stolen, and towards gift cards within shopping apps and digital wallets.

With Shopkick, Giftango is going to allow consumers to both receive digital gift cards as rewards and redeem them right from the Shopkick app. Last year Shopkick drove $110 million worth of revenue to its retail partners — simplifying the rewards process will only make it more valuable.

“All of these merchants have different ideas, Giftango has realy been focused on creating a consistency and conformancy in the [gift card] marketplace,” said Giftango founder and CEO David Nelsen in an interview with VentureBeat. “We’ve been pushing one gift card platform across all retailers.”

Giftango’s launch with Shopkick includes retailers like Lowe’s, Chili’s, Papa John’s, and Fandango. The company expects another 14 partners in the coming weeks.

Nelsen tells me that Giftango supports 150 brands, or a “majority of the market,” with its platform, accounting for around $2 billion worth of gift cards. The company has also developed a simple way to convert existing physical gift cards into digital ones — something that could be useful to help retailers and consumers transition to digital.

Gift cards aren’t exactly a sexy topic, but the move towards digital shopping is making them more valuable than ever. We’ve covered the Swedish social gift card startup Wrapp extensively, which has built a successful business with its social gift card plan. As gift cards shed their plastic real-world shells and go entirely digital, they’ll become even more valuable to retailers and consumers alike.

Portland, Oregon-based Giftango was founded in 2005 and has raised $13 million so far. The company has 50 employees, but Nelsen tells me it plans to double that number within the next 8 to 10 months as it expands its international operations.

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