The world of banking is evolving at an unprecedented pace, and open banking, in particular, is altering the way we engage with financial services. Amidst these changes lies an untapped potential waiting to be harnessed, you guessed it, digital gift cards.
Digital e-gift cards are powerful tools that can motivate and reward, influencing consumer behavior in the new banking landscape. In this blog post, we’re going to delve into the cost-effectiveness and desirability of digital gift cards, unlocking the opportunities they present in open banking.
Open banking has been steadily gaining momentum, transforming the financial services industry by increasing competition and innovation. While the concept is centered around giving consumers more control over their financial data, which was traditionally held by their bank, the full potential of open banking extends beyond just banking services, opening the door to a more integrated, consumer-centric financial ecosystem.
By allowing for the creation of new financial products and services that can provide more choice and better experiences for consumers and allowing data to flow more freely among banks, fintech companies, and other financial service providers, open banking promotes a culture of innovation where businesses are incentivized to improve their offerings to meet consumer needs and preferences.
While the benefits of open banking are clear to see, consumer awareness and trust remain critical issues and are two of the main barriers to wide-scale adoption. Fortunately, digital gift cards may just be a potential solution.
Digital gift cards are potent incentives. They can influence customer behavior, encourage transactions, and promote engagement - making them an ideal way for businesses to generate hype and interest around new open banking initiatives.
A recent study revealed that the latest projection for the worldwide gift card market could see it reaching $440.7 billion by the end of 2027. Given that 59% of consumers who use gift cards as a payment method end up spending more than the card's value, this makes the gift card sector incredibly valuable to retailers as well as to businesses using them as rewards and incentives.
Beyond their potential as incentives, digital gift cards also offer economic advantages over cash-based incentives. Digital gift cards can be purchased at a discount, making them a cost-effective solution for businesses looking to save on acquisition and loyalty.
Furthermore, their inherent desirability makes them a popular choice among customers. According to a 2020 report, 17% of Americans would want to receive a gift card for the holidays, indicating their continued popularity, and with sales of open-loop gift cards rising by 31.5% amid the COVID-19 pandemic, there’s clearly growing demand.
As the open banking landscape continues to evolve, the opportunities for using digital gift cards as powerful incentives will only grow. By harnessing their potential, businesses can unlock new revenue streams and foster stronger customer relationships leading to increased loyalty and long-term sustainable and profitable growth.
To learn more about how digital gift cards can supercharge your business growth in the open banking ecosystem, get in touch with Tillo today.