Square Inc. Adds Smartphone Gift Cards to Wallet (Dec. 10, 2012)
Dec. 10, 2012
Small merchants that accept Square Wallet are hoping to get a holiday sales boost from Square Inc.’s introduction this week of digital gift cards. San Mateo-based Square’s latest offering enables smartphone users to purchase a gift card from 250,000 merchants participating in Square Wallet, and pay using any card. Consumers buying Square gift cards need only know the email address of a recipient to send gift cards in amounts from $10 to $1,000. Recipients receive an email notifying them of the gift card, which can be redeemed through Square Wallet, Apple Inc.’s Passbook wallet application or by printing out a QR code the recipient can show to a merchant at the point of sale.
Square founder Jack Dorsey announced the feature on Dec. 9 and within 24 hours he Tweeted about the convenience of touting “local favorite” businesses to friends via gift cards, in addition to Starbucks, whose 7,000 nationwide locations are part of Square Wallet through a partnership announced earlier this year. Dorsey sees the new gift card services as a boon for small businesses that previously could not afford to offer traditional gift cards. “Visa and MasterCard love it because people are using their credit cards to buy these gift cards,” Dorsey said in an interview today with the Wall Street Journal.
Observers say Square’s latest gambit is noteworthy because it may drive more awareness by encouraging consumers who receive a gift card through Square to download the Square Wallet app, exposing them to new merchants. The service is “a big deal for small merchants” seeking growth because it expands opportunities for them to reach new customers through gift cards and through mobile channels,” Todd Ablowitz, president of Double Diamond Group, tells Paybefore.