Prepaid Vets’ New Gifting Play Targets Underserved Merchants
With retailers of all sizes seeking to harness the power of omnichannel gift cards to drive revenue and engage customers, a pair of prepaid industry veterans have formed a new company aimed at helping midsize merchants expand gift cards sales. Dubbed nthCard, the company is the brainchild of Wayne Chatham—a serial prepaid entrepreneur who most recently served as CEO of Card Compliant—and fellow industry veteran John Bechard. Chatham, who remains on Card Compliant’s board, is the firm’s chairman, while Bechard serves as CEO and president. Dave Witt has joined Salt Lake City-based nthCard as chief technical officer.
nthCard’s target market is midsize merchants, such as regional chains, e-commerce businesses and multiple-location retailers with low per-store gift card sales. Such merchants often are underserved by third-party gift card distribution providers, and thus can’t grow their gift offerings beyond their own brick-and-mortar and online presence—putting them at a “huge disadvantage” against larger chains, according to Chatham.
What’s more, those retailers are forced to work with multiple partners, leading to operational inefficiencies. “Either way, they’re forgoing the full value of incremental sales their gift card programs could potentially generate,” Chatham said. “What we’re saying to these underserved middle market retailers is, ‘Work with us to get the additional distribution points you need to sell more physical and digital gift cards to make your programs more profitable,’” he noted. “Our value proposition really is that simple.”
A recent study by Mercator Advisory Group found that $293 billion was loaded onto prepaid gift cards in the U.S. in 2015. Meanwhile, consumer habits around gift cards are changing, including the rise of digital gift cards and consumers purchasing more cards for self-use—creating more opportunity for retailers to use gift cards to increase sales and traffic and strengthen customer engagement.