Prepaid card provider Blackhawk Network is expanding its digital-content payment offerings internationally at a time when services such as Apple Inc.’s iTunes and online-gaming websites gain more users, observers note.
Consumers in Australia, Canada, Ireland, Mexico, Sweden and the United Kingdom now may purchase closed-loop prepaid cards for such digital currency as Facebook Credits and Microsoft Corp. Xbox points, the Pleasanton, Calif.-based company announced Dec. 1. Consumers may redeem the digital currency online for digital items.
The cards are available at Blackhawk’s Gift Card Mall displays located inside supermarkets, malls and retailers such as Woolworths Ltd. in Australia. Blackhawk also has displays in other grocery chains such as UK-based Tesco PLC and pharmacy chain Boots UK Ltd.
The expansion “offers digital-content providers tremendous distribution opportunities,” Dan Dmochowski, Blackhawk’s international president, tells PaymentsSource.
Blackhawk is the first provider to bring Facebook Credit prepaid cards to European brick-and-mortar locations, he claims.
Chains such as Tesco see millions of consumers pass through their stores each week and are seeing Facebook cards for the first time, Dmochowski says. “What does that do for Facebook?” he asks rhetorically.
Blackhawk has aligned itself with popular brands to make a smoother digital-content entry into foreign markets. The company is offering “powerhouse brands” such as iTunes and digital currency for popular online games from South Korea-based developer and pushlisher Nexon Corp., Dmochowski says.
“If you [offer recognizable brands] and put that in high-traffic retail locations, that’s a pretty simple and effective formula” for selling a lot of content, Dmochowski adds.
Digital content, which Blackhawk defines as prepaid cards used in online entertainment environments, has sold well in the U.S. The digital-media segment, which includes iTunes cards and other music and prepaid video products, helped grow the digital-content category to $9.29 billion in loaded funds in 2009, up 15% from 8.08 billion in 2008, according to a recent Mercator Advisory Group report (see story).
Digital media accounted for $5.6 billion of the overall digital-content total, up 19.2% from $4.7 billion, despite a poor 2009 holiday shopping season.
Blackhawk believes a number of factors should lead to success with digital-content sales overseas.
Facebook Credits and iTunes are not only a gifting option because consumers also use them themselves, Dmochowski says. Digital content also is geared toward younger consumers who have more interaction with social-networking websites and own gadgets such as an iPod or video-game console, he adds.
Blackhawk also views the expansion into new markets as way to give cash users a method to purchase digital content. “It becomes a question of how [those consumers] conduct business online if they don’t have a credit card,” Dmochowski says. Mexico is one such market where credit card use is low, he adds.
Blackhawk is evaluating potential new markets as it continues its expansion internationally, Dmochowski says.
In related news, the company on Dec. 6 announced a new partnership with Ireland-based grocery chain Superquinn, a Select Retail Holdings Ltd. subsidiary. The agreement calls for Gift Card Malls to appear in 23 Superquinn locations nationwide.
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