We spoke to attendees at Money 20/20 to ask them their views on payment trends, predictions for the coming year and what the ideal payments ecosystem looks like.
Here’s our interaction with Teri Llach, CMO at Blackhawk Network.
"We had this hypothesis that as physical and digital start to play together in a more cohesive manner, you can call it omnicommerce, unified commerce," Llach said. "I think the new term this morning was distributed commerce. All sorts of ways to talk about it. Everyone's looking for the next buzzword, I think."
"But the fundamental thing is both of these things are working in conjunction. Some people picking physical and some people picking digital. So our hypothesis was physical was more for gifting and digital was more for self-use because there are so many offers on cards," Llach said.
She pointed out results from a recent study on consumers who bought physical and digital gift cards. The study found that 60 percent of consumers shopping for physical gift cards would buy for gifting purposes, whereas 40 percent would buy for self-use. On the digital side, the study found about 37 percent of users shopping for gifting purposes.
"And I think what you will see a lot more in the next year is that distinction is going to get bigger and bigger. Where people on the gifting side want to stick something in an envelope or want to hand you something because they want that kind of connection with a thing," she said. "The e-code is less and less important to have that connection because if you get in on a discount with loyalty points or something like that."
On the digital front, consumers tend to trade gift cards or redeem loyalty points for getting discounts on buying gift cards, which is leading to making discounting and buying gift cards complimentary, she said. "You have this one side that can stay very, very robust for gifting — physical — and the other side is going to get more and more discount-focused for self-use and I will bet you when we recheck this at the end of next year it's going to be like 70-30 (digital). They are not going to disintermediate each other. They are going to complement each other," he said.
Wallets and Digital Gift Cards
"Gift cards are a great thing, but they can be something that you forget home, you don't know the balance. There are some pros and cons that make it really easy to buy them, not as easy necessarily to use it," Llach said. However, the amalgamation of digital gift cards and mobile wallets is the way people shop and use gift cards, she added.
While there has been rapid growth in digitization of gift cards and their introduction to mobile wallets, there are obstacles still hindering the growth — POS being the biggest one, she pointed out. "A lot of POS systems are old, a lot of these franchises under one retailer have different kinds of POS. So as soon as you start to get the redemption point — the more cohesive and accepting the technology, you'll see a greater consumer adoption," she said.
The Ideal Payments System
"Well, prepaid payments is where I sit, so I look at things from a prepaid card lens. Mobile is key for self-use gifting (gift cards) to keep it going. That's a behavior that's not going to change in the short run. You have this device in your hand and you are going to see all these great offers, and you are going to be able to execute them right on your phone and store them right in your wallet, whichever wallet you choose, basically, be able to redeem them. When those redemption points are really, really solid and you know exactly that you can scan it or tap or do whatever you need to do, then every body is going to use it. Then you wouldn't have to remember anything," Llach said.
Teri Llach works as the Chief Marketing Officer at Blackhawk Network. Llach co-founded the Pleaston, California-based company and led the company to go public in 2013. She currently leads all aspects of marketing for the multibillion dollar prepaid gift card and payments company.
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