Published on March 6, 2014
Managing Gift Card Operational Complexity and Enabling a Mobile Channel Platform March 2014
Managing Gift Card Operational Complexity and Enabling a Mobile Channel Platform In new research, Managing Gift Card Operational Complexity and Enabling a Mobile Channel Platform, Mercator Advisory Group discusses how to avoid the bottlenecks that will delay mobile deployment for many merchant organizations and provides a map for the development of a mobile channel platform. Preparing a mobile channel platform requires forethought and planning, and this report will assist merchants in that process. 2014 Mercator Advisory Group
Managing Gift Card Operational Complexity and Enabling a Mobile Channel Platform Merchants have a huge opportunity to deploy their mobile apps directly into the hands of consumers through partners. An airline with a mobile app can embed apps from other merchants located in the airport gate area. A restaurant, an electronics store, a coffee shop, or any merchant from a wide range of categories, all represent categories the consumer may be interested in while preparing to leave on a flight. The level of integration can be as simple as enabling a location service within the gate area or more complex, from an incentive offer for a visit, to an offer to download the full mobile gift card payment solution. This capability was described by Mercator Advisory Group in its session at the ATM, Debit & Prepaid conference held in October 2013 in Phoenix. 2014 Mercator Advisory Group
Tim Sloane VP Client Services / Director, Prepaid Advisory Mercator Advisory Group “Merchant gift card program managers tend to be significantly understaffed relative to the dollar volume flowing through multiple channels and through multiple third-party partners, which all need special settlement arrangements and to be monitored and managed properly,” stated Tim Sloane, the Director of the Mercator Advisory Group Prepaid Service and author of this report. “Third-party distribution partners, e-commerce partners, virtual card partners, business-to-business (B2B) partners, and new mobile app technology partners all have different goals, different reporting needs, different settlement reporting times and datasets, so it’s no wonder that gift card program managers find it difficult to implement appropriate governance over an operation that can account for up to 10% or more of a merchant’s cash flow.” 2014 Mercator Advisory Group
Managing Gift Card Operational Complexity and Enabling a Mobile Channel Platform Process maps are provided in the report that can be adapted by merchant issuers to document existing resources and identify areas that require improvement. They include: • In-Store Gift Card Activation and Reload • In Store Gift Card Redemption and Reload • B2B and Third-Party Distribution Channels • E-Commerce and Virtual Card Channel • Mobile Channel Platform 2014 Mercator Advisory Group
Highlights of the full report • A review of third-party channel activity that creates complexity within the merchant’s gift card operations • Process maps that can be adapted by merchants to identify opportunities for simplification and where activities are currently properly governed • A process for merchants to follow to quantify the opportunity for mobile channel platform so that investments in building the platform are aligned with the size of the opportunity • A process map that identifies how a mobile channel platform is implemented on top of the existing gift card platform 2014 Mercator Advisory Group
Figure 4: Channel Activity: Overview IN-STORE E-COMMERCE MOBILE VIRTUAL GIFT CARD THIRD PARTY B2B Partner A Partner B Partner C Partner A Partner B Partner D Partner A Partner E Partner F Partner A Partner D Partner G Partner A Partner B Partner H Partner A Partner B Partner I Purchase, Activate, Deliver, Redeem, and Reload. Purchase, Activate, Ship, Register, Reload, Auto-reload. SOLD IN-STORE SOLD VIA WEBSITE Purchase, Activate, Deliver, Redeem InStore, Reload, Auto-Reload, M-Gift. SOLD VIA MOBILE Key Business Drivers • • • • • Purchase, Activate, Deliver, Redeem In-Store. Sell Gift Card at Retail Outlets SOLD VIA WEBSITE Key Cardholder Drivers Increase gift card sales Increase loyalty program Brand recognition Increased card volumes Lower interchange (For small average ticket) • Increased issuer efficiencies • • • • • • Increased store visits and sales Increased average ticket Decreased store costs Guest ease of use Guest speed Guest perceived gains Source: Mercator Advisory Group 2014 Mercator Advisory Group Sell Gift Card for Incentives, Promotions
About the Full Report This Research Report is 31 pages long and has 14 exhibits. Members of Mercator Advisory Group’s Prepaid Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. Please visit us online at www.mercatoradvisorygroup.com. For more information and media inquiries, please call Mercator Advisory Group's main line: (781) 419-1700, send e-mail to email@example.com. For free industry news, opinions, research, company information and more visit us at www.PaymentsJournal.com. Follow us on Twitter @ http://twitter.com/MercatorAdvisor. 2014 Mercator Advisory Group
About Mercator Advisory Group Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com. 2014 Mercator Advisory Group
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