Blackhawk Network is taking its Gift Card Mall, a common sight in retail stores, into the digital world.

The Pleasanton, Calif.-based provider of prepaid and gift cards for consumers and businesses this week announced the launch of Blackhawk Digital, an e-gifting platform for startups, e-commerce companies, payment companies and marketers.

Blackhawk Digital provides the support and applications to deliver digital versions of the network’s gift cards tied to national and local retailers, while also allowing companies to leverage consumers’ increasing use of social media and digital wallets through marketing and promotional functions, the company says.

“We are really excited about the growth in physical gift card sales, but this is an opportunity to expand that to mobile and online, while enhancing the consumer experience,” says Talbott Roche, Blackhawk Network’s president.

The cloud-based service provides companies with all of the application interfaces and functions it needs to sell prepaid and gift cards online, Roche says. Depending on each company’s preference, consumers can purchase physical gift cards or virtual cards, Roche says.

Companies using Blackhawk Digital would have access to the network’s GoWallet digital product, which allows consumers to register and manage multiple cards in one place, as well as receive real-time balance updates, make purchases through a mobile pay application or receive promotional offers, Roche says.

“Previously, a consumer would buy a physical gift card and walk out of the store, and the retailer would have no way of knowing who the customer was,” Roche says.

With a digital card registered to a mobile wallet, the retailer can continue interacting with the consumer. The consumer puts the card in that wallet “with an intention to spend,” so the retailer can convert that consumer back to the store with a geo-location message, Roche says.

“The retailer can remind the consumer that when he is in the store, he still has $20 to spend on the card and there is currently a good deal for a product,” Roche says.

Blackhawk can also support retail financial institutions entering the e-gift market, Roche says.

Essentially, Blackhawk provides a network to its partners that allows prepaid and gift card sales through digital channels, Roche says. In turn, those retailers provide Blackhawk with a commission on those sales.

While startup companies may find a digital platform for gift cards and prepaid cards beneficial, just about any company or financial institution could benefit from a support system such as Blackhawk Digital, says Madeline K. Aufseeser, senior analyst with Boston-based Aite Group.

“Virtual gift cards have been in the marketplace for a long time, but this is a great enhancement,” Aufseeser says. “Nowadays, there is more opportunity to go virtual than not.”

Blackhawk Network’s timing for the digital system support should bode well for the company and its customers, Aufseeser adds.

“There are huge opportunities in the digital gift card space,” she says.

At some point in the future, the digital card market could interact with the growing payroll and general-purpose reloadable debit markets, Aufseeser says.

Blackhawk Network operates as a unit of Safeway Inc., which recently announced it was planning an initial public offering of a minority stake in its Blackhawk Network Holdings Inc. business. 

Nearly two years ago, Blackhawk Network created a Facebook application that would allow numerous friends on the social network to contribute as a group to a single gift card account. 

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