Published: May 19, 2019

PayThink Digital stored-value cards are stuck in the past

PayThink Digital stored-value cards are stuck in the past


  • May 15 2019, 12:01am EDT

Last year, U.S. consumers spent big on stored value. Sales of bearer instruments like gift cards, lottery and event tickets alone exceeded $250 billion, with no expected slowdown in sight. Yet, as stored value continues its evolution to digital, the experience is leaving a lot on the table.

The conversion to e-gifting, iLottery, digital coupons and more should have been a transformative event in commerce: consumers sending gifts to loved ones, playing Powerball on their iPhones and sharing coupons with neighbors, all seamlessly integrated into their emoji-filled, selfie-obsessed, social sharing world. What a win that should have been for retailers, brands and consumers.

What we got instead were digital pictures of paper and plastic that are far less convenient, transferrable or expressive than their predecessors. Why? Because the conversation was based on the same thinking used to deliver paper and plastic in the first place.


Before discussing the future, it’s important to remember why stored-value instruments have become ubiquitous:

They’re easy to buy. There’s a reason most brick-and-mortar stored-value transactions take place near a door—convenience. Walk in. Pick. Pay. Go. It’s easy, anonymous and noninvasive.

They’re easy to share. Stick a gift card into an envelope. Hand a baseball ticket to a friend. Share a coupon with a neighbor. These simple, in-the-moment transactions occur naturally in our daily lives.

They’re easy to redeem. Pull it out of your wallet. Hand it to a cashier or ticket-taker. Enjoy the benefit.

It’s no overstatement to suggest that stored value plays a role in nearly all of our daily lives. This suggests that the digital transformation of these instruments should be life-changing. But that hasn’t happened—yet.

Unfortunately, when consumers started craving digital stored value, the organizations that provide these instruments did what large, established vendors tend to do: They implemented it in a way that was least disruptive to the established norms. The result has been a digital conversion gone tragically wrong: They added lengthy and invasive registrations in the name of authentication; They created an experience that’s as flat as paper and plastic; They completely ignored the powerful insight and analytics these instruments could provide.

Digital stored value 1.0 has been a failure, and it’s time to throw out the playbook.

Digital Stored Value 2.0: A New Playbook for Consumer-Centric Stored Value

It’s time to make digital stored value truly a digital experience.

How do we do this?

Return stored value to its bearer nature. Simplicity, anonymity and shareability are the keys to a great digital stored-value experience.

Integrate with how consumers actually communicate. Who enjoys giving or receiving a gift card that is bought online, printed, folded, then inserted in an envelope? Videos, GIFs, memes, audio files and other digital media are what they love to share today.

Tap into stored value’s marketing power. Anonymity and traceability are not mutually exclusive. In fact, you can learn about consumers, their preferences and spending patterns, without ever having a reason to know their name, or access any of their PII.

It’s time that we as an industry revisit the decisions that are driving the Digital Stored Value 1.0 conversion and rearchitect the experience to maximize its full potential.

I believe that most of you—being entrepreneurs, technologists and accomplished businesspeople—can envision the transformative effect of this evolution. For retailers, it’s a new way to improve the experience in their stores and their own branded applications. For brands, stored value becomes a transformative marketing channel with the opportunity to tailor content until, during and beyond the end of the transaction. Most important, for consumers, it’s an entirely new form of sharing and expression, with vastly untapped potential.

Chris Demetree

Chris Demetree is CEO of Lazlo 326.

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