Acquisition fuels National Gift Card's digital renaissance

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Through its acquisition of digital payments and fundraising provider Benefit Mobile, the National Gift Card company is positioning itself to help charitable organizations grow and to strengthen the mobile offerings of retail merchants.

Mostly, the arrangement announced this week signals a graduation from the physical gift card mentality to one that helps an organization concentrate on mobile first and empowering far more digital interactions between an organization or merchant and its customers.

In the short term, it can offer a Starbucks-type mobile payment, loyalty and gifting program made available for any merchant. In the long term, merchants can view the incorporation of Benefit Mobile into National Gift Card as a way to fire back at the social media options that currently operate as P2P gift-giving channels.

"'Gift card' is one of the more limiting terms of a product when you think about it," said D.J. Asad, CEO of Benefit Mobile and now president of National Gift Card. "It started as using it as a gift to give someone, but it can be used as an underlying aspect to do a lot of revolutionary things."

It is easy to envision what can be done when considering what Starbucks did with its mobile application and what other "forward-thinking-type" companies are considering with mobile and loyalty platforms, Asad added.

Crystal Lake, Ill.-based National Gift Card supports more than 500 merchant brands and 2,000 corporate client buyers with a gift card API, sourcing, fulfillment and other technologies, while Chicago-based Benefit Mobile has concentrated on making charitable donations easier through mobile devices. In becoming part of National Gift Card, the focus for Benefit Mobile remains on philanthropy, but its technology provides much more.

"This is not about gift cards or being packaged as gift cards, this is about being packaged as a spending account and marketing platform," said Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC. "That is what Benefit Mobile has done and brings to the table — a benefit not just to philanthropy, but for merchant offers and other features."

Starbucks is the poster child of how an effective digital gift card and loyalty program can work in a mobile payment setup, Crone said. "Scaling e-gifting in a way that would allow a merchant to integrate with mobile payments and also address the competition of social payments is important."

Venmo, Facebook and Square have all had variations of P2P gifting in play, whether from individuals to individuals, or individuals supporting a charitable organization.

"The social feed is important to some organizations, in showing all of the followers on a Venmo or Facebook account that a person made a donation," Crone said. "But some people like to keep their donations private, and this is where NGC and Benefit Mobile could find users."

A goal that appeals to many merchants is to find more ways to be funded before a payment is made. This is the basic definition of a gift card, but it has taken on new meaning through the speed and flexibility of digital channels.

"Without giving away any secret sauce, the plan is to have NGC offer all of the things expected of a gift card company, but we have some aces up our sleeves for more revolutionary-type uses of the gift card in combination with our platform that can be really impactful," Asad said.

NGC says the acquisition also brings Benefit Mobile founders Darron Schall and Derik Lolli on board. Schall will be chief technology officer for the company, while Lolli has been named chief product officer.

"Our clients have trusted NGC for 15 years, and we will now offer forward-looking technology solutions to dramatically improve how their gift cards go to market," Eric Thiegs, chief revenue officer at NGC, said in a company release about the acquisition.

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Debit cards Prepaid cards M&A Digital payments Loyalty and rewards