All retailers, large and small, can now have access to the increasingly lucrative giftcard sector which, it is estimated, will account for £13 billion of retail spend in the UK by 2011. This is according to euroConex and Card Commerce who announced a partnership agreement today. The agreement will see Card Commerce’s PayPlus OnDemand giftcard service made available to euroConex’s network of merchants across Europe.
euroConex is one of Europe’s leading providers of card payment solutions. In addition to the retail sector, euroConex’s network also includes hotel, restaurant, petrol and tourism sectors.
The deployment of PayPlus OnDemand will allow merchants using euroConex point of sale card terminals through their banking partner, to sell and redeem giftcards and other types of prepaid debit card. The system will initially be available through Alliance & Leicester Commercial Bank and Bank of Ireland, euroConex’s partner banks in the UK and Ireland, before being rolled out into the broader European network in 2007.
Today’s announcement means that all retailers, from large multi-national retailers to small single outlet stores, can enjoy the benefits and increased sales of having their own uniquely branded giftcard system.
A plastic card based alternative to traditional paper vouchers, giftcard schemes have proven to increase retail sales by an average of 20%. In the US, giftcards currently make up 5% of total retail spend. euroConex and Card Commerce believe that the roll out of this system in 2006 will result in giftcards accounting for £13 billion of annual retail spend within the next five years.
Currently in the UK giftcards account for less than 1% of total spend however this figure is expected to grow quickly in 2007. In addition to increasing sales when compared to paper vouchers, giftcards also allow retailers to cut costs in the areas of loss through fraud, secure distribution and production.
Card Commerce is the Irish-based international provider of prepaid debit card solutions. The company’s Marketing Director, Scott McInnes said today, "The giftcard market in the US has really taken off in the past ten years and currently accounts for 5% of total retail spend. In the UK and the rest of Europe, the demand has been a lot slower, however a 400 per cent growth in the number of gift card programs in Europe is predicted in 2007 as retailers start to see the benefits."
"The fact that Europe has been slower to respond is not down to consumers, but rather that giftcard schemes, up until now, have been costly to install and to manage and, as a result, were only available to the largest retailers. However by making PayPlus OnDemand available over euroConex’s merchant network, and by offering a standard, ‘giftcard-in-a-box’ package of point-of-sale merchandising and cards, every retailer from the smallest shop to the largest retail chain will be able to offer a complete giftcard service to their customers and avail of the same benefits".
"euroConex recognises the growing opportunities in the Giftcard and prepaid debit card markets" said Jaime Domingo, Head of Sales and Marketing, euroConex. "The Card Commerce relationship will enhance euroConex’s extensive portfolio of payment and value added solutions, increasing our competitiveness in this rapidly changing market."