Stripe for Gift Cards
I would like the community thoughts on this as we are in the secondary gift card space.We are "ATTEMPTING" to build a payment processing system similar to stripe but for gift cards where payment processors can augment their payment processing capabilities through the use of gift cards or merchants directly can integrate our service to accept gift cards as a form of payment. IE an end user can pay for an item or service say with a walmart or best buy gift cards. We already have the ability to do instant balance verification for gift cards. What do you guys think about this? 1. Why would I want my store to accept payment with someone else’s gift card? 2. What consumers want this? 3. How do you make money? 4. Balance verification seems a bit easier than balance transfer. The stores issuing gift cards make a fair amount of money in interest on those card balances. Cooperating with you and other stores might result in a loss of net interest income. 1. Why would I want my store to accept payment with someone else’s gift card? Maybe you are a high risk merchant that has trouble with CC processor such as gambling sites or adult related sites. Or you customer base is concerned about privacy and fraud. Accepting gift cards is also a great way to avoid chargebacks. 2. What consumers want this?
Consumers who are concerned about their privacy. 3. How do you make money?
We already make money by selling discounted gift cards to shoppers looking to save money on purchases from their favorite brands. 4. Balance verification seems a bit easier than balance transfer. The stores issuing gift cards make a fair amount of money in interest on those card balances. Cooperating with you and other stores might result in a loss of net interest income. Some brands love the secondary markets and other don't. But i would argue it may help increase brand sales since customers may buy gift cards solely for the purpose of privacy or other reasons. Beware of the use of the gift cards for credit card fraud. For example see https://news.ycombinator.com/item?id=7501821 (51 points | Mar 31, 2014 | 54 comments) Thanks we are aware of the huge fraud problem in the space. We have a way to fight against this currently so am not too worried about this.