Payments

With $8.52 Million in funding, Openbucks takes gift cards online

Openbucks was established in 2010 by Marc Rochman (CEO). The startup has been able to accrue $8.52 Mn of investment from venture capitalists and angel investors such as Jerry Yang, Co-founder of Yahoo, Greycroft partners, Clearstone Ventures, Morado Ventures, Novel TMT Ventures, Inspiration Ventures, CrunchFund, SV Angel and TiE Angels.

Openbucks seeks to help brands to do indirect marketing, increase the footfalls and revenue. Gift cards of CVS Pharmacy, Subway, Burger King, Circle-K, CITGO and Shell are a part of the Openbucks Network. The gift cards act as a form of payment at thousands of online e-commerce websites.

User’s interested in picking up the gift cards can pay cash and get them from any of the above mentioned outlets. Post which the companies, retail stores, online gaming portals who are in association with Openbucks gift card payment system would enable a user to pay for buying goods or services online.

Through this business model, Openbucks allows the unbanked to shop online and pay for it offline. This model allows online merchants to increase their customer base and revenue. Openbucks claims that such model allows retail stores to track the buying pattern, measure customer loyalty, give away gift vouchers and customize marketing campaigns. Online merchants pay an undisclosed fee to Openbucks for each gift card transaction.

Xsolla, a leader in Global, in-game payment optimization partnered with Openbucks in August 2012. “You can get a subway gift card almost anywhere in North America, it’s so convenient. What a great way [paying via Openbucks] for our customers to pay for in-game purchases,” says Alexander Agapitov, CEO of Xsolla.The Gift card payment network is integrated with Xsolla to create a new payment option to North American gamers. Users can purchase cards eligible for online use via Openbucks.  Openbucks has also partnered with many of global leading game publishers, such as Aeria Games, Valve (Steam), Gameforge, S2 Games, Bigpoint, Wargaming.net etc.

 Openbucks’ offering is similar to the Subway Card and Walmart Card. The Walmart MoneyCards is a reloadable card that can be used for card purchases (wherever VISA is accepted), bill payments (power, cable, water, etc.) and direct deposit feature (employees without a bank account can use their Walmart MoneyCards to have their salaries added to the card). Money can be loaded onto the account by cash or check at Walmart stores.

LTP View: By eliminating the need for a credit card, Openbucks empowers people of any age with the ability to buy goods or services online. The idea behind their business has been in place for a while. Such a business model empowers unbanked and even teenagers who just have $5 in their pocket to pay online for subscription games, in-game items etc. Online games, especially MMORPG’s due to in-built marketplace see large numbers of players spending money online for items, offers and bonuses in-game. Openbucks may have a significant potential to tap in the vast majority of the unbanked shoppers (especially gamers) in U.S.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

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