Hallmark Cards sells prepaid business to InComm
Hallmark Cards, better known for its greeting cards, has decided to sell its payment card subsidiary, Hallmark Business Connections, to InComm.
Minneapolis, Minn.-based Hallmark Business Connections provides offerings to boost employee engagement through incentive programs built around physical and digital gift cards. The company's clients represent a wide range of industries such as health care, banking and hospitality. Terms of the deal were not disclosed.
"Hallmark Business Connections has built on the iconic Hallmark greeting card brand to empower companies with the means to create personalized incentive programs that recognize employees for dedication to their organization," stated Brooks Smith, CEO of InComm, in a press release.
Hallmark Business Connections offers an online prepaid card mall for one-off purchases, a managed program for medium-sized businesses that make more frequent purchases as well as a full-service solution that caters to large corporations. In addition to gift cards, not surprisingly, Hallmark Business Connections also provides customized greeting cards to commemorate special events such as service anniversaries, promotions and more.
There has been more investment activity around the business of selling prepaid cards to businesses for employee motivation and customer engagement. Last year FTV Capital paid $35 million in private equity funds for a slice of digital gift card provider Tango Card because of its focus on the employer rewards and incentives prepaid segment.
In 2014 First Data, acquired digital gift card provider Gyft. Then in 2017 Blackhawk Network acquired CashStar, InComm purchased American Express’ prepaid business and First Data attempted to create a prepaid joint venture with Fleetcor, which they later abandoned.
Hallmark’s exit from the gift card business comes at a time when the prepaid industry has been experiencing significant change in how consumers buy gift cards and what type they buy. Consumers are more frequently buying digital gift cards from online prepaid purveyor,s as opposed to buying a physical card from a display rack. It’s reached the point where digital gift card purchases are almost at parity with physical cards. According to First Data’s 2018 Prepaid Study, consumers purchased almost as many digital gift cards as they did physical gift cards — 6.1 and 6.5 cards per capita, respectively.