First Data’s Mobile Gifting Acquisition

First Data has given itself a gift that it hopes will keep on giving as it pursues the valuable gift card space.

The payments provider will acquire Silicon Valley-based start-up Gyft, which allows users to buy, manage, redeem and send gift cards and was a pioneer in developing the digital wallet for gift cards.

In 2013, such cards were the fastest growing part of the total pre-paid card market.

“We are joining First Data to accelerate our growth and significantly improve the gift card experience for both customers and retailers,” Vinny Lingham, co-founder and chief executive officer, Gyft, said in a statement. “As a part of First Data’s suite of innovation-powered products, Gyft will be added to a portfolio of technology-driven gift solutions that link advanced consumer-engagement technology with point-of-sale business solutions.”

First Data officials are hoping that this move will allow them to entice new demographic groups, opening new markets that were previously not easily accessible.

The theory is, that retailers could leverage Gyft’s social media to expand potential customer interactions. Gyft also functions as a comprehensive engine for bulk gift card sales, useful for institutional purchases.

“Gyft, with its mobile gifting platform, and First Data, with its global scale and distribution network, together will accelerate the growth of virtual prepaid with powerful new tools for merchants of all sizes to deepen their relationships with their customers,” said First Data President Guy Chiarello. “This means that the same robust toolset deployed by big box retailers will be coming soon to small- to mid-sized businesses, perfectly synched with our mission to offer innovative solutions to help our clients grow.”

The deal between First Data is set to close in the next few weeks, pending approval from Gyft’s board.  Financial details of the acquisition were not announced.

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