In the current era of escalating inflation, prepaid cards have evolved into multifaceted tools that provide benefits to consumers and issuers alike. Alongside enabling financial transactions, prepaid cards now pave the way for retailers to foster lasting relationships and customer loyalty.
Advantages from all angles
Fiserv data shows that revenue growth is about 15% to 25% greater when customers are engaged in a merchant’s loyalty program. The reasons for business to offer strong prepaid card programs are many:
- Prepaid cards offer a more cost-efficient route to customer acquisition compared to other advertising or marketing channels, often converting consumers into staunch advocates who then bring their own social network into the program.
- Loyalty programs help capture valuable data related to demographics, engagement patterns, and purchasing behavior — data for merchants to understand what's working, what's not, and where they need to focus their efforts.
- Prepaid cards also prove to be a more cost-effective payment method, driving top-line growth and bottom-line savings. Merchants can use the upfront cash generated by prepaid card sales in a variety of ways. Moreover, consumers often end up spending more than the face value of the card, increasing revenue for the business.
Beyond gifts
The term “gift card” can be misleading. In today’s market environment, it's not just about persuading people to buy a gift — it's about encouraging them to buy for themselves, be more engaged, earn points, rewards, and build loyalty.
To learn more, listen to the recent PaymentsJournal.com podcast featuring Sam Lituchy, VP and Head of Gift Solutions at Fiserv.
