eCommLink strengthens virtual value chain
n December 2007, Discover Financial Services selected eCommlink Inc. for processing Discover's eGift Cards. The virtual gift cards can be purchased online or over the phone at all U.S. merchant locations that accept Discover cards.
According to Victor Newsom, Senior Vice President of Operations at eCommlink, the exciting thing about virtual gift cards is the ease with which the cards can be bought and received. "Just with a simple link to a Web site and you're there," he said.
EGift cards are purchased in denominations of $20 to $500 and can be sent almost instantaneously via e-mail to recipients.
"And the e-gift card represents real U.S. dollars, just like buying a plastic gift card at a store, except there is no plastic here," Newsom said. "You get an online only card and it is processed by merchants just like you would take your Discover card and process it."
The network-branded open loop virtual cards can be redeemed online anywhere Discover cards are accepted or printed and taken into brick and mortar stores where the numbers are keyed in at the POS and processed like any other electronic transaction.
Value unchained
From the merchant's perspective, the Discover eGift Card has many benefits, Newsom said. First, virtual cards are easy to distribute since the distribution of the physical plastic cards is eliminated.
"And it's a very low cost of entry to the merchant," Newsom said. "In fact, merchant acquirers can very easily set up a card program distributor relationship with one of my clients."
Merchant acquirers that strike deals with Discover can have their merchants quickly set up with virtual gift cards, Newsom added. In short order, those merchants can be sending out $5 gift cards to their customers via e-mail.
The Las Vegas-based processor also provides a short message service mobile text messaging feature that allows eGift Card purchasers to receive text message notifications when the gift recipients receive their virtual cards. Also, eCommlink facilitates instant, personalized e-mails to virtual card recipients, alerting them of their gifts.
"Certainly the more higher margin merchants could use [the eGift Card] all the day long," Newsom said. "The car industry has been using gift cards for test drives for quite some time. And they have a fairly high cost of inventory and distribution. So there's all sorts of things we can provide in the prepaid space to really help their marketing efforts and customer awards programs, as well as the consumer product itself as a prepaid card."
ECommLink recognizes the incredible service flexibility of prepaid cards and bundles additional services above and beyond the main features of cards. Take, for instance, travel cards.
"ECommLink can attach roadside assistance for a travel card," Newsom said. "And anywhere your car breaks down, you get roadside assistance. It's tied to the card. So eCommLink can bundle things that could make the card attractive as a product in its own right, not just as an enabler for goods and services that you would normally get with a credit card."
Chain gangs
Newsom sees the benefit of gift cards as loyalty tools to help merchants retain customers as well. Repeat customers who reach a certain spending threshold can be rewarded with $25 gift cards, with very little overhead cost to the merchant. EcommLink offers loyalty programs tied to merchant networks - collections of businesses that offer gift cards redeemable at any one of those select retailers.
Unlike some of its competitors, eCommLink is not an acquirer-processor; it is only a processor, Newsom said. "We consult with our clients to put the best programs out there, and then we process the heck out of them." Thus, the company partners with merchant acquiring ISOs to process merchants in niche markets.
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