When Shopkick Inc. this week chose Giftango Corp. as its delivery engine for digital gift cards, it represented a union made in cyberspace.
Both companies since their inceptions have concentrated on developing technology to deliver merchant rewards and loyalty points to consumers’ mobile phones.
Since its launch in August 2010, Palo Alto, Calif.-based Shopkick reports it has secured more than 3 million active users and has surpassed 1 billion in-application deals or offers viewed.
It is no wonder Giftango CEO David Nelsen considers the June 6 announcement of the Shopkick and Giftango arrangement as a key development for his company.
The Portland, Ore.-based digital gift card delivery service will send digital gift cards to Shopkick users who redeem their earned “kicks” for merchant gift cards. Consumers accumulate the “kicks,” or loyalty points, through various actions at stores accepting Shopkick, Nelsen tells PaymentsSource.
“We love Shopkick because they were one of the first to develop rewards and incentives for consumers using mobile devices,” Nelsen says. “Both of our companies really care about the mobile space.”
Shopkick concentrates on how to reward consumers in different ways through a mobile-phone application, while Giftango focuses on being the “engine” to drive those rewards from the merchants to the consumers, Nelsen says.
The companies communicate with each other through application program interface connections when issuing a digital gift card, Nelsen explains.
Through the Shopkick application on a consumer’s smartphone, the consumer can earn “kicks” in some cases simply by walking into a store, Nelsen notes. When that consumer decides to redeem a certain number of “kicks” for a gift card from Lowe’s or Nike, for example, Shopkick contacts Giftango through the application connection to provide information about which card is requested and where to send it, Nelsen says.
In turn, Giftango communicates with the merchant’s bank to access funds to place in the digital gift card account before sending the card to the consumer, he adds.
It’s been nearly a year since Giftango first introduced its Mobile Wallet Conversion Platform for converting closed-loop plastic gift cards into a digital format through a smartphone camera (
Since then, Giftango has grown to the point it is now connected to many brands of gift cards and has converted more than $2 billion in plastic-card value to a digital format for delivery through either email, Facebook messages, text messages or a mobile application, Nelsen notes.
Giftango does not charge merchants to put the barcodes on the cards or for the initial card-balance and transaction-history service. Nelsen did not share the company pricing structure, but indicated in the past that Giftango would charge merchants for the plastic-to-digital conversion, regifting the funds on the card and for a promotional interface.
Partnerships with companies such as Shopkick allow Giftango to position itself as a key element in development of mobile wallets, Nelsen contends. All of the mobile-wallet developers are going to want or need a method for delivering digital gift cards to their users, he believes.
“If you are an active consumer, you may use 20 or 30 different gift cards during the course of the year,” Nelsen says. “You may be more inclined to use those in a mobile wallet rather than your credit cards.”
As such, digital gift cards represent “an avenue for major engagement between a consumer and a wallet on his smartphone,” Nelsen suggests.
Consumers redeem digital gift cards either by printing them from a computer or by displaying them on the mobile phone screen for scanning, Nelsen says. Because Shopkick is a smartphone-based application, all of those gift card deliveries will be through a mobile phone application, he adds.
“Shopkick is truly mobile–from earning rewards to cashing them in. So it’s important that gift cards can be delivered and redeemed right from the mobile device,” Shopkick CEO Cyriac Roeding stated in a press release. “With Giftango we have a one-stop shop for gift card redemption that provides Shopkick users with a wide variety of reward options.”
The agreement between Shopkick and Giftango reinforces Nelsen’s vision of a mobile shopping experience, Ben Jackson, a senior analyst at Mercator Advisory Service, tells PaymentsSource.
“He has always had his eye on mobile from day one,” Jackson says of Giftango’s CEO. “He didn’t want to start on the Web and then go to mobile; he wanted to go to mobile right away.”
While the combination of Shopkick and Giftango “fits nicely,” the challenge with mobile shopping and rewards programs remains educating consumers and keeping them engaged, Jackson says.
“People do tend to sign up for loyalty programs and then they either lose the card or forget about it,” he contends. “With a mobile program, at least it’s far more interactive and people will see it in front of them on a consistent basis.”
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