Jeff Guthrie, Chief Sales & Marketing Officer at Moneris Solutions Corp. – Canada’s largest debit and credit card processor providing stored-value gift card and loyalty programs for tens of thousands of merchant locations – told Loyalty 360 that speed and convenience are the two biggest selling points for virtual gift cards.
Guthrie says Moneris launched a pilot Passbook service program with Kernels Popcorn’s gift loyalty card program earlier this month in more than 70 locations across Canada. He said his company’s gift and loyalty program for medium-to-large businesses is now compatible with Apple’s Passbook application.
Merchants can now provide cardholders with the ability to digitize their physical gift or loyalty cards into the Passbook application.
Passbook allows users to virtually store such content as airline boarding passes, coupons, and loyalty and gift cards. To use the Passbook gift or loyalty card, a user simply opens the mobile application at a participating merchant's point-of-sale, who then keys in or scans the card number. The card account balance updates instantly on Passbook.
“When we talk to customers about gift cards, one of the biggest problems we hear is when a person gets to the store he or she realizes they don’t have the card,” Guthrie explains. “We wanted to make gift cards virtual so people can put them on their phones and they’re easily accessible because people might forget many things when they leave the house, but they’re not forgetting their phones. There’s nothing more frustrating than having a gift card and not being able to use it when you want.”
One of Passbook’s biggest challenges had been the slow uptake in point-of-sale (POS) acceptance by merchants, Guthrie explains. The Passbook application is pre-loaded onto all Apple® iPhone and iPod touch devices using iOS 6 or 7.
Virtual wallets are becoming increasingly popular, Guthrie says. According to a 2012 Affinion Loyalty group study, 61% of consumers prefer virtual over physical cards.
People can continue to use plastic cards if they choose, Guthrie says.
“This doesn’t erase one form or the other,” he says. “From a loyalty point of view, merchants want to sell gift cards because they want customers to come in and experience their stores. It helps to complete the whole cycle around why gift cards are popular in the first place. Merchants love it because it drives customers back to their stores. Putting those gift cards in a phone brings convenience for all parties and brings loyalty.”
Too often, Guthrie says, gift cards are given and then forgotten. Passbook will give out users their current balances. He says next year Moneris plans to target small businesses with the Passbook service program.
“Many of them are reluctant to buy into loyalty programs or gift cards,” he says. “For large chains, it’s very easy to buy a card and send it to somebody. We believe gift cards will become more virtual. It’s just the direction everything is going.”
Guthrie’s biggest concern?
“People just don’t understand it enough,” he says. “Companies have to develop programs that work across a spectrum of users and technology as it changes. Do you bet on it now or try to figure out where I invest my money. You want customers to embrace and love it. We’re seeing that it’s very much becoming omnichannel where you have to online presence, store, and mobile, and the three have to marry together and provide a seamless experience and virtual gift cards can do that. It’s the ease of checkout that will drive it.”
For some, Guthrie says, people have to see them in friends’ wallets first and “that’s how these apps and virtual products start to spin off.”