A group of investors led by Yahoo co-founder Jerry Yang has agreed to invest $4.8 million in a Redwood City, Calif., payments network that lets use retailers' gift cards to buy goods and services from other merchants.
Established late last year, the Openbucks Gift Card Payment Network targets consumers who do not have credit cards or debit cards, or who prefer not to use those cards to make online purchases. Openbucks allows consumers to use cards from participating retailers, including Subway, Sports Authority, Shell Oil, Burger King, CITGO, Circle K and Hess, to buy goods and services from other merchants.
"The Openbucks Gift Card Payment Network taps into a whole new market of consumers that either by choice or due to limited resources may not have been able to previously buy goods online," said Jerry Yang. "Openbucks stands at the forefront of the future of online payments as it provides a simple solution to the 25% of U.S. households and most U.S. teens who have no or very limited access to credit cards along with the many consumers that are leery of providing their financial information online."
Aside from Yang, investors include former Yahoo Chairman and Chief Executive Terry Semel and at least nine venture-capital firms.