Prepaid Cards Use Tokenization, New Form Factors in Pursuit of Better CX

We never knew how cool — and extremely useful — payments options could be until we began to have so many to choose from. That’s putting customer experience into the frame more than ever as people decide on their preferred payment methods and providers vie for top-of-wallet status.

With nearly two-thirds of consumers willing to take their business elsewhere if their preferred payment method isn’t available, retailers need to rethink their checkout experiences.

For the most part, though, merchants are still working on elevating the payments experience, Blackhawk Network Chief Product Officer Cory Gaines told PYMNTS. The prepaid card sector is doing its part by streamlining an evergreen payments product, making it more convenient for consumers regardless of what channel they’re shopping in.

“Think about Uber, where you’re consuming, and the payment is an afterthought,” Gaines said while reflecting on how payments changed leading up to and during the pandemic. “It’s either done beforehand or done invisibly. Retailers are going to be faced with the same things.”

It’s all about establishing context, he said, and making payments a seamless part of it. For Blackhawk, that’s going down the path of tokenization and creating eGift cards that are touchless, can be emailed to the recipient, and activated and used through the coveted seamless flow being sought by all.

“If it’s a gifting experience, why not make it really easy to download a couple of Giphys or even record yourself as an opener to receiving that gift card?” he said. “Or maybe have the gift card, on the first transaction, kick back ‘thank you’ notifications further connecting the giver and the receiver to a meaningful and memorable experience.”

Noting that Blackhawk responded to new pandemic demands with these and other features, like new card delivery and provisioning offerings, he said that savvy retailers are one step ahead of the game when it comes to leveraging digital trends to create a better experience.

See also: Blackhawk Expands Partnership With Kroger for More B2B Gift Cards

Asia Sets the Example

With the Great Resignation, wage growth and inflation all coming as added pressure for employers, 2022 is a year when gift cards can streamline relationships, not just transactions. Employers are using prepaid gift cards more to recognize and reward employees in a way that delights recipients and is easy to manage from an administrative standpoint.

“Consumers as employees need to get rewarded for good work done,” Gaines said. “Using stored value products to incent and reward behavior and drive loyalty — these are time-honored aspects of the payment business.”

It still leaves the question of expanding prepaid and gift card programs to be more convenient and more touchless — and to generate as much convenience and ease as consumers now demand. For inspiration, Gaines turned to Asia, where prepaid cards are a key financial instrument.

“If you look to the east, in markets like Hong Kong, Singapore, Indonesia and India, where self-use is much stronger than in the United States or [in the west], people are committed to these products, and they’re trying to find ways to use them over and over again,” he said.

That’s opening new use cases for prepaid cards in regions where they’re much more widely used — in some cases, preferred — method of payment, gifting and even budgeting. Expansion of prepaid cards is tracking with other payments tech, and in some regions, that means more social commerce, where digital prepaid cards are part of the mix at checkout.

“A lot of commerce happens over social and some of the networks in these areas,” Gaines said. “QR codes in retail is another thing that they’ve really leaned into, particularly in Indonesia. It’s really bringing digital into a physical environment.”

Read also: Blackhawk Network Buys Stake in Singapore’s Wogi

The Greening of Prepaid

As 2022 progresses, Blackhawk continues innovating along trendlines that resonate with more consumers that are socially conscious and picking their products by those lights. Saying the company is “spending a lot more time” on environmental, social and governance (ESG) considerations in product development, Gaines described a greening of gift cards.

With a nod to the fact that companies are community members with ESG obligations, he said, “We’re looking at how we keep down the level of plastic that we put onto J-hooks. We’re looking at our communications, looking at our data centers.”

Overall, the question Blackhawk is tackling is the ESG dilemma of all companies now. Because physical payment cards remain the predominant form of payment, Blackhawk is rethinking the tactile appeal of cards versus the environmental impacts of plastic.

“It’s making sure that we retain that feel but do it an environmentally-friendly way,” he said, adding that “the continued tokenization of our products into digital form factors is going to make it easier.”

See also: Carrefour Taps Blackhawk Network for Branded Gift Cards