June 19, 2015
Gyft, a First Data subsidiary which is an online platform for digital gift cards, has partnered with Chain, a bitcoin API developer, to bring gift cards on the bitcoin blockchain. The new project is called Gift Cards 2.0.
Gyft has a bitcoin-friendly history. Users can upload different digital cards on a single mobile platform with the help of Gyft’s app. Customers can purchase, send and use gift cards from renowned US retailers such as Amazon, Target, Starbucks, etc. from a digital wallet. To purchase the cards, a variety of methods can be used, including credit cards and PayPal. However, if a customer uses bitcoin for the purpose of purchasing gift cards, he gets 3% as cashback.
Gyft embraced the blockchain technology so that it can offer its small businesses secure, cheap and fast solutions. Chain Founder Adam Ludwin explains, In this new model, a typical gift card will only cost a few cents over its lifetime, an order-of-magnitude cheaper than traditional gift cards. One of the reasons behind cost reduction is that plain text codes can easily be stolen as opposed to multi-signature private keys securing the digital asset itself.
Based on the numbers we have, 95% of small businesses that have point-of-sale systems do not have gift card programs, whereas something like 99% of the large merchants we currently stock all have gift card programs, says Vinny Lingham, CEO of Gyft, a company which works with 300 large retailers, which he defined as national or regional multi-store companies. The reason for that is the cost — it’s expensive to offer gift card programs.
The partnership of Gyft with Chain will help the company in integrating the blockchain technology to digital gift cards. As a result, Gyft will offer a new USD-denominated gift card secured and transferred over the blockchain. These gift cards can be used at any small and medium-sized businesses that are using Clover terminals.
Consumers can redeem different forms of digital value in a single transaction. For example, a consumer can buy a cup of coffee by combining a gift card, a branded reward point and a coupon, since all blockchain-based digital assets operate on the same open standards, says Vinny Lingham, CEO of Gyft.
What’s exciting about this announcement is that it’s really the first real-world blockchain-based product that’s not bitcoin that people will experience and understand since everyone understands what a gift card is, says Adam Ludwin, CEO of Chain.