Ecommerce titan Amazon has launched Amazon Birthday Gift, a new service that lets you and your friends chip in to give Facebook connections Amazon gift cards.

Amazon gift cards are popular for birthdays and holidays because they let people buy from Amazon’s humongous selection of stuff. It’s certainly more broad than giving someone a gift using a service like Facebook Gifts, which lets you send friends items like Target gift cards, Starbucks cards, coffee mugs, and more.

But perhaps the best part of Amazon Birthday Gift is that you can essentially “crowdfund” someone’s present. The app lets you and your friends put in money for the Amazon gift card. You can start collecting cash early for the gift card online, and it will not appear on the person’s Facebook Timeline until his or her birthday.

“Birthdays have always been social occasions, and sites like Facebook now make it possible for anyone around the world to send birthday wishes to friends – with Amazon Birthday Gift, those many individual messages can become a big gift,” Steve Shure, Amazon VP of traffic, said in a statement. “Whether it’s your best friend or your old high school teammate, Amazon Birthday Gift lets you join a social gift that will grow as more friends participate, which makes giving and receiving birthday messages on Facebook even more fun.”

Check out the video below for more on how it works.

Screenshot via Amazon/YouTube

Subway, the sandwich franchise, has not had a lot of luck with its point of sale computers. Shortly after two Romanian hackers were indicted for hacking into the systems, a the District Court of Massachusetts indicted another two hackers for stealing up to $40,000 from the company.

Shahin Abdollahi and Jeffrey Thomas Wilkinson allegedly went to great lengths to remotely log in to Subway point of sale systems, create fake gift cards totaling around $40,000, and use them or sell them on eBay. They supposedly did this by either installing remote access software on the systems or selling Subway point of sale computers that already had LogMeIn, a remote access tool, previously loaded.

That’s right, Abdollahi ran an entire point of sale system business and is also indicted for selling a number of these LogMeIn-ready machines to businesses. According to the indictment he allegedly sold these POS systems under the company name POS Doctor, to Subways in Massachusetts, Wyoming, and California.

From there, they would have hopped inside the system and electronically loaded the gift cards for use or sale.

Furthermore, the Abdollahi ran a number of his own Subway franchises in Southern California, according to the indictment, to learn the point of sale systems. Seems like a lot of effort for $40,000 in gift cards, but it could have been that the two were setting up infrastructure for a bigger scheme, if the allegations are true.

Check out the indictment below:

hat tip Ars Technica; Subway image via pat00139/Flickr

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

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

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Streaming music startup Spotify has started offering physical gift cards at Target, a sign the service is serious about obtaining mass market exposure in the vein of iTunes.

Gift cards are available in denominations of $10, $30, and $60. With the cheapest Spotify subscription costing $5 per month, a $60 card could get your loved one a full year of service. Spotify’s top tier runs $10 a month, so the cheapest gift card would cover that. The cards can be redeemed for new or current Spotify premium subscriptions, and they are only available at Target stores.

While this is a small step for Spotify, it’s also a smart one. Apple’s iTunes service has become so popular and pervasive not only because it’s easy to use, but also because you can easily buy people an iTunes gift card for birthdays and holidays. Now Spotify can join that club.

Stockholm, Sweden-based Spotify has raised around $188 million in funding. It now has more than 4 million paying subscribers around the world, and 15 million total active monthly users.

Photo credit: Spotify

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Good news for people who have no interest in putting thought into a birthday present for their tech savvy, anti-Apple friends: Google officially announced that it’ll start selling Google Play gift cards in a handful of retail stores.

Along with the recently released Google-branded Nexus 7 tablet, the new gift cards are likely part of the search giants’ strategy to boost digital media sales via the Google Play store, which directly competes with Amazon and Apple’s iTunes store.

Photos of the gift cards leaked online last week, as VentureBeat previously reported. The company is releasing the cards in increments of $15, $25, and $50, which will be available at Target, GameStop, and Radio Shack retail chains across the country. However, I’d imagine we’ll start to see the new gift cards in other stores prior to the holiday shopping season.

And much like other gift cards, the full amount can be added to a Google Play account, where you can then purchase things like ebooks, music, apps, and games. Unfortunately, you can’t use Google Play for magazine and other Android app subscriptions, according to the company.

Via Engadget

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

With Google continuing its push into digital media sales, it was only a matter of time before Google Play made its way to retail stores’ gift card racks.

The search giant will offer Google Play gift cards in $10 and $25 increments, according to the photos obtained by Android Central (as shown in the image above). The latest Google Play Store app update’s code also contains references to support for gift cards as well as wish lists, reports Android Police.

The move is probably related to the recent success Google had in Google Play sales after gifting $25 to anyone that purchased a new Nexus 7 tablet. That said, giving someone a Google Play gift card would also help boost digital media sales through the Google Play store.

The gift card packaging lists movies, music, books, apps, and “more” along the bottom. I did find it a bit odd that it didn’t mention games, since mobile gaming is rapidly becoming a very lucrative area of digital media sales. Then again, if Google is trying to pair the new gift cards with its new Nexus 7 Google-branded tablet, it might make more sense to focus on passive media consumption.

The gift cards will probably function much like Apple’s iTunes gift cards that allow users to add the full value of the card to an account, which you can then use to purchase things. We don’t know which retail store chains will start selling the Google Play gift cards when they officially debut, but anywhere that currently features iTunes or Amazon gift cards for sale is a safe bet.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

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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After finding success in Sweden and across Europe for its effort to revitalize the gift card industry, Wrapp is finally launching in the U.S. today. And to prove it’s serious, the company has more than 25 retailers signed up to use the service, including Gap, H&M, and Sephora.

Wrapp’s mobile and web service allows you to buy gift cards for friends through Facebook, which can be redeemed via the Wrapp mobile app in stores. The company offers a few unique twists on the gift card paradigm: Once a gift card is purchased, your Facebook friends can easily add more funds to it, and Wrapp also offers free gift cards as part of targeted retailer campaigns. Wrapp gift cards can only be redeemed via smartphones, but that also means you’ll never really lose them either.

Not surprisingly, the U.S. has been Wrapp’s No. 1 target since it launched, CEO Hjalmar Winbladh told VentureBeat in an interview a few weeks ago. He pointed to a few unique aspects of U.S. consumer culture that makes Wrapp a perfect fit: We have the most mature Facebook market, significant smartphone penetration, and a general acceptance (and in many cases, preference) for gift cards as presents. In some European and Asian countries, gift cards can seem a bit too impersonal.

The company currently has 165,000 active users who have given out 1.6 million gift cards. Wrapp users send cards to their friends once a week on average, Winbladh said. The company also reports that participating merchants saw average sales of four to six times the value of the free gift cards sent out.

I’ve been following Wrapp for months now, but now that it has landed in the U.S., the company is also revealing itself as a sort of anti-Groupon. Unlike the daily deals service, Wrapp allows retailers to target specific consumer demographics with free gift card deals, and it also has a more personal touch than Groupons since Wrapp cards come from your friends. Groupons tend to attract dealhounds who may never visit a store again, something that irks retailers, and in some cases has also killed businesses.

Wrapp helps retailers “avoid the bottomfeeders,” Winbladh said. The service is appealing to merchants in other ways as well: they only have to pay up when a Wrapp card is redeemed, they can target exactly the sort of customer they want, and they get the added bonus of friend endorsements.

The company offered up one case study of how its service helps: European retailer Clas Ohlson used Wrapp to push traffic for a new store. The company sent out promotions for free Wrapp cards worth $15 to loyalty card members, 11 percent of which started using Wrapp, and one sixth of those customers redeemed the cards in-store within three days.

For consumers, the deal is pretty sweet as well. With Wrapp, you’ll never forget about a gift card again, and since the service hooks into your Facebook account, it can alert you of friend birthdays and easily lets you send a gift.

Stockholm, Sweden-based Wrapp has raised $10.5 million so far to bring its service to the U.S., and also saw a big legitimacy boost with the support of LinkedIn founder Reid Hoffman, who joined the company’s board in the latest round.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

In a sign that we are living in a truly mobile world, mobile gift cards are taking off like crazy.

During the holidays, grocery store clerks cheered whenever Chris Sweis, the chief mobile officer at JunoWallet, showed up to buy gift cards. That was because he gave the stores some huge business, buying every single iTunes card on the racks in the store.

He took them back to the office so employees, like Abel Jimenez pictured right, could literally swim in a sea of gift cards. The team had to scratch off the gift cards, get the access codes, and put them into the company’s database so JunoWallet could give away an electronic version of the card.

Sweis’ company has turned plastic gift cards into electronic gift cards. Instead of storing them in your physical wallet, you can put them in a virtual one on your iPhone or Android device. JunoWallet created a popular mobile app that will let you store all your gift card information in one place and access it right when you need it. It’s like a mobile wallet that connects you with just about every merchant in the world.

For consumers, the JunoWallet is a simple iOS or Android app that can securely store the numbers and pins for existing gift cards from businesses such as Starbucks, Apple, or The Gap. You can redeem those gift cards directly from the device, which means you no longer have to carry a bunch of plastic in your wallet or purse. It also means you will have the gift card information when you need it, as it’s easy to forget gift cards at home.

I met Sweis on the plane coming home from the Consumer Electronics Show; he was happily exhausted from being so busy. He laughed about how he and his team had to work around the clock to keep up with demand, which started taking off around Dec. 17, just before the holidays. In the last 30 days, the JunoWallet app has had more than 220,000 installs.

Sweis had to charge the grocery store sales to his corporate debit card. Once, the first time he did this, he was only able to charge $800 worth at a time. And after a few times, the bank turned the spigot off. Sweis had to call and explain that his business was taking off like crazy. That was just a couple of months ago, but now the whole process has been made electronic, where the gift card makers can send codes over in digital form.

“We definitely are not going to the grocery store anymore,” Sweis said. “Those were exhausting days, when we were doing 14,000 cards a day back then. We are doing significantly more business now. If we had to go to the grocery store still, I’d probably go crazy.”

JunoWallet also lets you obtain promotional certificates that can be used for a variety of products and services. That means you can essentially get free money from JunoWallet through various promotions. Users have been able to convert check-ins, for instance, into points that can be redeemed for gift cards. You can buy gift cards directly from within the app, as well as give cards and certificates to friends. Or you can get bonus gift cards and discounts when you make gift card purchases.

The free app has taken off like crazy. JunoWallet is at No. 5 in the finance category in the App Store. The company has also just launched an Asian-friendly wallet, dubbed BambooWallet, which is at No. 21. The BambooWallet is a companion app to JunoWallet, where you can connect different accounts.

Along the way, JunoWallet has added some interesting innovations that keep the cycle of card giving going. Last year, the company set up JunoPoints, where users can get 20 JunoPoints every time they log into a location. One JunoPoint was worth a penny, and the threshold for redemption was 10,000 JunoPoints, or $100. The company set up a JunoPoints reward system with Foursquare for a limited time last year and will relaunch it across the board later. The experiment was positive but Sweis said the company pulled the JunoPoints system down for now.

Some places will give away bulk JunoCredits, or a virtual currency,  just to get people in the door. Users can trade around different points related to specific prizes (you may need four points to get a free product), so the JunoCredits are a kind of currency that encourages social interaction. The app has an “earn gifts” tab that lets you generate JunoCredits that you can then use to shop. Some companies can use the gift cards as promotions to drive new business into their doors. They can, for instance, get consumers to install apps through incentives such as issuing JunoCredits.

If someone installs an app or uses it a bunch of times, the consumer can be rewarded with gift cards sent straight to the mobile device. This cost-per-action model generates money for JunoWallet. The advertisers are happy because the user actions include things that help the brand, like getting on a company’s mailing list, becoming a fan on its Facebook page, taking a survey, calling a call center to hear a sales pitch, or an instant gathering of people communicating via text message. Sweis said there is a lot more opportunity to grow the business.

“We are incentivizing actions in what is called cost-per-action ad units,” Sweis said.

Sweis said his team plans to offer $10,000 in iTunes gift cards to be offered in return for certain mobile tasks to be done at the Macworld Expo next week in San Francisco.

Sweis, a self-described serial entrepreneur with failures under his belt, started the company in Chicago in 2009. He started with a vision and interviewed a bunch of programmers for the job. He was about to hire a team from India when he ran into Raghu Sastry (left), who became the company’s chief architect, who then introduced Sweis to his friend Jae Hoon Kim (right), who became chief applications officer. They started on Christmas Day. The company has relocated from Chicago to San Jose, Calif. Buddy Sastry helped create the security for the company.

“We all realized we had something amazing together,” Sweis said.

On Facebook, JunoWallet has more than 46,000 fans. It has 13,000 Twitter followers. Advertisers are knocking on the door to use the platform. Rivals include players such as Wrapp, Swagg and Blackhawk’s GoWallet. So far, JunoWallet has angel investors. But it may need to raise money if its business keeps growing like crazy.

“We’re working as hard as we can to keep up with the demand now,” Sweis said. “It is really testing us.”

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Who says gift cards aren’t cool? After landing $5.5 million in a first round of funding last November, social gifting service Wrapp, which lets you easily send gift cards to friends through Facebook, today announced that it’s received an additional $5 million for the round led by Greylock Partners and international VC firm Atomico.

Adding even more cred to the company is LinkedIn founder Reid Hoffman, a partner at Greylock, who will be joining Wrapp’s board. He’ll be serving alongside Skype and Kazaa co-founder Niklas Zennström, who also co-founded Atomico.

The funding will help Wrapp accelerate its expansion into the U.S. and U.K. after finding success in its home country of Sweden over the past few months. The company says that in Sweden it sent over 250,000 gift cards in December, and it’s continuing to grow about 30 percent every week. As of the past three months, 2 percent of Sweden’s population of 9 million are active on the service.

“Our biggest issue right now is that we grow so quickly, we’re running out of [retail] campaigns,” said Wrapp CEO and co-founder Hjalmar Winbladh in an interview with VentureBeat. He went on to say that the company needed to arrange additional retail campaigns faster than it originally thought. Wrapp now has 30 major retailers in Sweden participating in its service, as well as hundreds of smaller retailers.

Wrapp connects to your Facebook account to let you know when friends and family have upcoming birthdays. After gifting a card to a friend through the Wrapp mobile or web app, other friends can see the card on the recipient’s Facebook account and chip in additional funds.

The gift card remains “wrapped” on the recipient’s Facebook page until the day of their birthday, which adds a nice bit of mystery to a traditionally boring gift card transaction. Wrapp’s cards can only be redeemed using its Android or iPhone app, which adds a nice viral element to the service, since every recipient instantly becomes an active Wrapp user.

Winbladh tells me that women between 22 and 35 are the most active users on the service. That’s a good thing, since they’re statistically the biggest shopping demographic worldwide. As for Wrapp’s U.S. strategy, Winbladh says the company will target large nationwide chains and then focus on more regional retailers.

Wrapp is particularly appealing for retailers since they don’t have to pay anything until someone redeems a gift card, and even then retailers using the service say that every redemption has been profitable. Since Wrapp relies on Facebook data, retailers can also use it to target specific consumers by age, gender, and location.

Stockholm, Sweden-based Wrapp also has offices in Silicon Valley. Thus far, it has raised a total of $10.5 million.

There’s certainly plenty of room to innovate in the gift card arena, and it’s also a lucrative market, accounting for $100 billion annual sales in the U.S. alone.

Using friend birthday data from your Facebook account, Wrapp’s mobile apps and website makes it easy to keep track of upcoming birthdays and send digital gift cards from participating brands. What makes Wrapp special is its focus on offering free gift cards, which retail partners are hoping you’ll top off with additional funds before you send them to friends.

After gifting a card to a friend, other friends can see the card on the recipient’s Facebook account and chip in additional funds. The gift card remains “wrapped” on the recipients Facebook page until the day of their birthday, which adds a nice bit of mystery to a traditionally boring gift card transaction. Wrapp’s cards can only be redeemed using its iOS or iPhone app

Wrapp was co-founded by founding Spotify CTO Andreas Ehn and Hjalmar Winbladh, founding CEO of the VoIP company Rebtel. “We were intrigued by the concept that gift giving is much nicer than gift buying,” Winbladh told VentureBeat in an interview months ago. “This is not discounting or daily deals. This is turbo-charged gift giving.”

The funding comes from Atomico, a venture capital firm founded by Skype and Kazaa co-founder Niklas Zennström (who is also joining Wrapp’s board), and existing investor Creandum, a Nordic venture firm.

CardPool makes money by buying gift cards off users at a discount, then reselling them. For example, if you’ve received a $50 gift card at a store that you’ll never shop at, you could sell it to CardPool for $40, then CardPool could sell it to someone else for $45. You can also trade in your gift card for an Amazon.com card.

So why would you want to receive payment in Facebook money (Credits are used in Facebook applications like FarmVille) rather than real cash?

Well, you might be a FarmVille addict. And even if you’re not, founder and chief executive Anson Tsai said Facebook Credits remove one of most annoying steps of the exchange process. With any other gift card, you’d have to mail it in to CardPool, then wait for the check. With this program, you just enter your gift card number in CardPool, and you get your Credits right away.

Tsai said he’d like to expand the “no mail” option to other payment types, but CardPool still needs to figure out how to avoid fraud.

“Facebook is a great start because we use Facebook Connect as a way to authenticate users and hopefully keep out the bad guys,” he said.

CardPool was incubated by Y Combinator and has raised funding from angel investors including StubHub founder Jeff Fluhr, PayPal cofounder Max Levchin, and Zappos chairman Alfred Lin.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

I’m not a particular fan of gift cards. There are few things worse than getting a gift card for Christmas to some store I’ve never heard of — or worse, one I hate. Hopefully that’s about to change with Plastic Jungle, a provider of a marketplace for trading and selling gift cards.

Plastic Jungle announced today that it has raised $10 million in its third round of funding led by Jafco Ventures to help consumers redeem $30 billion in unspent gift cards.

The company allows gift card recipients to sell those cards for up to 92 percent of the card’s value and get it back in cash. The average payout for gift cards to any given person is around $96, according to the web site. Gift cards have to have a minimum of a $25 balance to trade in. The amount of cash paid out is dependent on how much demand there is for the cards. For example, Target gift cards pay out 90 percent of their flat value, while cards to clothing retailer Macy’s pay out 80 percent of the card’s value.

Plastic Jungle users can also buy other gift cards on the market at discounts of up to 30 percent when compared to the costs in stores. Gift cards to Target are sold at a 4 percent discount, while gift cards to Apple’s iTunes store are sold at an 8 percent discount. The site reports that it saves its users an average of $68 when they shop using gift cards purchased through its marketplace.

The marketplace doesn’t just pay out in cash, either. It can pay out in credits at other e-commerce and social gaming sites. That includes Facebook Credits and cash that can be placed in a PayPal account.

The San Jose, Calif.-based company’s other investors include Shasta Ventures, Redpoint Ventures, Jafco Ventures, First Round Capital, Bay Partners, Harrison Metal and Western Technology Investment. The company has raised a total of $23.4 million, including a $6 million round led by Shasta Ventures and a $7.4 million round led by Redpoint Ventures.

Again, BankSimple is not a bank. It’s a provider that manages user experiences for banks. Chief executive Joshua Reich likened it to the way gift-card operators work.

The company partners with banks that are exclusively interested in the back-end parts of banking — managing treasuries and regulatory compliance — and outsource the consumer interface and customer service out to other companies.

Users of the service receive a BankSimple debit card — which allows for overdraft protection and free ATM usage. BankSimple also allows users to deposit checks with a smartphone, something USAA has done for some time now.

As payment for running its services, BankSimple receives a fraction of the income generated from the difference between each bank’s loan payment rates and savings interest rates. Reich wouldn’t disclose what percentage of the difference BankSimple receives.

BankSimple has not launched, but Reich said the company had attracted interest from 20,000 potential users. Reich also said the company had attracted interest from some banks that are interested in outsourcing their customer service, but declined to give specific names.

[Photo: alancleaver_2000]