Raleigh-based Gift Card XPRESS is betting that the $100 billion market for gift cards will continue to grow and mature. This holiday season, they’ve launched a new service designed to give gift-givers and gift-recepients even more control on how gift card dollars are spent.
The company’s new platform, launched recently, allows gift-givers to send money as a gift through a secure transfer, and gives recipients more than 470 vendor gift cards to select from. And, if a recipient doesn’t want to redeem a gift card, they can gift that money to someone else.
All this according to company founder and CEO Jim Wear. The company, which competes with bank-issued gift cards, according to Wear, is aiming to reduce friction on both sides of the gift-giving equation, as well as reducing fees associated with the entire bank-issued gift card industry.
According to data from CardHub, the Visa gift card is the most popular gift card, yet remains the most expensive card for the gift giver. These cards often charge purchase fees ranging from $3.95 to $6.95, said Wear, whereas only four percent of store-issued cards charge an issue fee.
Gift Card XPRESS will tackle these major players by reducing the transaction fees for the gift-giver. The company generates its revenue by charging transaction fees when a user adds money to their balance, and also charges users an annual subscription fee for premium services, whose benefits largely include a reduction in fees when adding money to an account balance, said Wear. The company never charges to send or receive a gift, said Wear.
Beyond the individual market, the company is targeting businesses, particularly ones that run incentive programs that then reward employees with gift cards. The Gift Card XPRESS platform would give employers an easy way to ensure that employees can redeem their incentives for gift cards they would actually use, said Wear. The company is negotiating with one such employer, a Triangle-area hospital, said Wear, which may implement the platform through its HR department.
The company has raised money from a small group of private investors and was incorporated in January 2014. Their beta platform tested the concept between October 2014 and July 2015. It’s prime gift-giving season, so the company expects a dramatic increase in user adoption. The company plans to raise an additional round of seed funding in the next three to six months, said Wear, in order to continue to grow the platform’s user base.