Tag Archives: holiday shopping

Mobile Gift Cards

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The Official Merchant Services Blog continues its ongoing coverage of the upcoming holiday shopping season and how it will impact the thriving E-Commerce industry. Yesterday’s blog took a look at some of the statistics revolving around 2010’s holiday shopping profits as well as detailing a trend among online shoppers to begin their holiday shopping in the summer months. We also promised that today’s blog would show how gift cards and gift certificates were being taken a step forward.

Mobile Gift Cards

Gift Cards are going digital this year, with the onslaught of a variety of providers who will give people purchasing power of gift cards sent directly to their mobile phones. This Fox News story touts mobile gift cards as the “cool” and “sophisticated” new gift giving idea. The article cites the success of coffee giant Starbucks this year with Mobile Gift Cards, and suggests that others are following that blueprint. Starbucks had some compelling numbers to underscore the success of their mobile gift card program according to the article:

“”Within nine weeks of the national launch of mobile payment, customers paid more than 3 million times using our mobile payment application in stores and this number continues to grow at a steady rate,” says Adam Brotman, senior vice president of digital ventures for Starbucks Coffee Co.”

A mobilesyrup article features the Mobile Gift Card for apps from Toronto-based Mobiroo. And a San Francisco Chronicle article looks at Giftly and its Mobile Gift Card product. It’s a new trend that looks to make a big splash in the 2011 holiday season.

How Do They Work?

2011 Holiday Season logoThe standard way Mobile Gift Cards are designed to work is: The card is sent via email, Facebook or text. The recipient is notified that he or she has a Gift Card, and can take their smartphone into the store and use it immediately. The store clerk simply scans a bar code from the recipient’s phone, and the card is applied to the balance.

Unfortunately, as has been pointed out by Host Merchant Services in previous posts about Mobile Payments not quite taking hold in the U.S., this standard process doesn’t always work out. Many retailers are not physically equipped to handle such a process. So if the bar code can’t be scanned, Mobile Gift Cards can still be used by consumers if they print out the coupon prior to going shopping, or if they input the gift card number at a website or point-of-sale terminal.

The obvious convenience of Mobile Gift Cards is that they work seamlessly with e-commerce and online shopping. You get a coupon code on your mobile device, and then can input that number at the website where you are shopping.

Follow the Leader

The Fox News article noted that Applebee’s, California Pizza Kitchen and Target all offered Mobile Gift Card options this year. The mobilesyrup article about Mobiroo cited the old school hook of the idea, stating that “Gift cards are a symbol of a bygone time when analog ruled and retailers yielded more to foot traffic than mouse clicks. But according to Mobiroo CEO Vinay Chopra, old is new again.”

Mobiroo, according to Chopra, sees Mobile Gift Cards having quite a lot of potential in the marketplace because of smartphones themselves, specifically the apps people use and purchase for their phones. But Mobiroo is still using a physical Gift Card, with a scratch-off area that gives a code to redeem for use in an App store, and Chopra sees this as a stocking stuffer item for the holiday shopping season.

Giftly, on the other hand, is following the example set by Starbucks and others, and makes a completely digital process available. According to the San Francisco Chronicle article: “When a Giftly card is purchased, the buyer’s credit card is charged. When the recipient opens the card on their mobile phone in the store, Giftly check their location. Once Giftly confirms that the recipient is at the right venue, the gift money is unlocked.  Giftly then send the money as a credit card reimbursement to the recipient. The recipient then purchases the product at the cash register per usual. The merchant doesn’t have to be told about the Giftly — the service is completely a location-based redemption. Unlike most gift cards, Giftly allows the buyer to select up to three venues where the recipient can spend the money.”

All Giftly cards are delivered via e-mail and redeemed on a mobile phone. They allow you to send gifts unbound by location. It adds convenience to the shopping process, which is a core element that is going to make it popular with consumers. By allowing consumers to digitally forward purchasing power to friends and family wherever they happen to be, the shopping process gets that much faster and easier, making mobile gift cards an attractive option for holiday shoppers.

Tomorrow we’ll touch on a topic brought up by this blog, taking a closer look at apps as gifts in the upcoming holiday season.

Getting Ready for Holiday Shopping

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The Official Merchant Services Blog would like to wish everyone a very happy Halloween. As we speed our way into the last stretch of 2011, the holidays are going to zoom into view. Holiday shopping season officially tends to start on Black Friday. But in recent years, the boom in online shopping has holiday shoppers no longer traditionally adhering to the official shopping season trends. A 2010 survey conducted by Google and OTX found that 35% of internet users start their holiday shopping prior to the end of summer, months ahead of Black Friday.This trend is only continuing to grow as consumers find online shopping convenient to their shopping habits, easy to do, and the wide selection lets them find great deals on price.

This boom in e-commerce continues on past Black Friday. Cyber Monday, a marketing term coined in 2005 to describe a big push with incentives to shop online days after Black Friday, set records in 2010. According to a Star Tribune article from January 16, 2011, Cyber Monday sales rose 16 percent from 2009, and topped $1 billion overall –– marking the first time Cyber Monday hit the billion dollar mark. The record setting didn’t stop on Monday, according to comScore, a company that tracked the sales figures between November and December for the e-commerce industry. Sales on Thanksgiving Day were up 28 percent from the previous year, and overall e-commerce sales topped $32 billion in the holiday shopping period, a 12 percent rise from 2009. Even Black Friday, brick and mortar stores’ biggest holiday shopping day of the year, saw a 9 percent rise in e-commerce to $648 million.

“This trend isn’t going away in 2011. Some preliminary predictions are suggesting that this year’s holiday shopping season is going to be robust, and online shopping will continue its rise in the eyes and wallets of consumers. You can see that e-commerce is heavily predicted to boom in the next four years through previous articles posted by Host Merchant Services. And while The Official Merchant Services Blog prepares to give you ongoing coverage of the holiday shopping season’s impact on the E-Commerce industry, we’re going to take some time to give merchants some helpful tips to get prepared for 2011:

  • Start early. With your promotions and your sales, start getting the marketing as well as the products or services out there to your customers as early as you can. As seen with the statistics above, online shopping is not beholden to the Black Friday start date. Online shoppers make their lists, check them twice as soon as brick and mortar shoppers and start looking for deals from spring on through the rest of the year.
  • Check and re-check your process. Make sure your online shopping cart is running smooth. The biggest draw of e-commerce for many consumers is convenience. So it’s very important for your online shopping experience to be hassle free to the users of your website.
  • Consider your product line. With online business as booming as it is, it can be easy for your site to get lost in the crowd as shoppers surf around. Consider offering something your competition can not offer. A unique item. An eye-catching deal. Basic marketing plan, but even in the e-commerce industry, the basics still work.
  • Gift certificates are a big holiday item, and that does not stop online. In fact tomorrow’s blog post is going to look at something specific to this year’s shopping season that takes gift certificates and gift cards a step forward in terms of convenience for holiday shoppers. One thing to remember about gift certificates is the post-holiday business they drum up for you. They are purchased during the holiday season, but get used after the holidays, giving your online store the potential to attract other purchases beyond the capacity of the gift certificate in the slower sales month of January.
  • SEO and Keyword choices should be focused on with your advertising. Consumers gift shop online using search engines. You want to do everything you can to get your site in front of them when they search for these gifts. The focus of your e-commerce solution for your business should be an online store that your customers can find easily and then use conveniently. This will get them coming back to your site.
  • Free shipping. This is something that if you can offer, you should strongly consider offering to your customers. It is a big boost for the e-commerce industry leaders each year that they can offer free shipping to holiday shoppers.

Those tips are just scratching the surface of things you can do to prepare for the holiday shopping season. It’s certainly not too late to get ready for the business rush that holiday gift-giving provides each year. Host Merchant Services provides e-commerce solutions to our merchants that will let them take payments smoothly and efficiently. And The Official Merchant Services Blog will continue to provide insight on how merchants can maximize this opportunity.


					

		
		
	


	

				

			
						

				Payment Gateways: How They Help Your Business
			

										

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The Official Merchant Services Blog delves into Payment Gateways today. We’re going to examine the pros that exist for businesses in using Payment Gateways to establish an online business presence and accept online payments. We also detail some of the basic questions you want to ask yourself about e-commerce, why you want an e-commerce presence for your business, and how much the two Host Merchant Services Payment Gateway options cost.


Why Do I Want To Start Collecting Online Payments In the First Place?


The easiest answer is that it opens up a new market for you and improves your cash-flow.


Online payments give you the ability to accept credit cards through a Payment Gateway itself, or through a third-party add-on, without a lot of trouble or delay. Your clients can pay you quickly with a credit card transaction and the money is in your bank fast.


This increases your cash-flow. You no longer need to wait for a physical check to show up in the mail, then spend time depositing that check in the bank, and then waiting days for the check to clear before you can access the money.


Accepting online payments also opens your business up to a wider potential customer base. Beyond just the local draw your brick and mortar business can attract, the ability to set up an effective e-commerce business lets you reach out to customers far away. Online shopping, especially as we close in on the holiday shopping season, is booming. And virtual shopping options for your website (e-commerce solutions) all hinge on having a way to process payments through your website. In short, to cash in on the online shopping potential your business has, you need a payment gateway in place to process those transactions.


Also, accepting online payments allows you the ability to charge your client’s credit card on a recurring basis (for monthly, quarterly or annual services). This process can be automated, making recurring revenue streams a reliable and predictable source of income.


What are the Costs of Using Payment Gateways?


Most Payment Gateways charge a base monthly fee as well as a “discount rate” for each sale (usually 2-4% of the sale). Monthly fees are generally charged for premium options that can include added support, personal branding for your business and other miscellaneous functions.


Host Merchant Services offers two basic Payment Gateway options: Authorize.net, and HMSExpress. Authorize.net, which is one of the three largest Payment Gateways offered, costs HMS Merchants a base fee of $10.00 a month and 5 cents per transaction. HMSExpress, the new virtual terminal solution that HMS offers, costs its merchants $10 a month and has no added fees for individual transactions.


When analyzing your options, you want to balance the costs of the services against the additional value these services bring to you and your business. One basic way to evaluate the cost of even having a payment gateway is: What is it worth to you to get paid faster for online transactions than you do for check transactions? What is it worth to your business to be able to process more transactions during the holiday season because you can attract business from all over the country?


Questions like that are what you have to consider when you decide if you want your business to transition to an online one. In our next part of the series, we’re going to get into the details of how Payment Gateways work and see what other questions you have to consider when trying to decide which Payment Gateway to use.


 

					

		
		
	


	

				

			
						

				Magic 8-Ball on Mobile Payments [2023 Update]
			

										

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Magic 8-Ball on Mobile Payments: Outlook Hazy, Ask Again Later





Mobile Payments are getting a lot of press right now and are being heralded as the future of commerce. There are quite a few media sources playing the role of prognosticator, tagging Mobile Payments as a billion-dollar boom waiting to explode. But as we creep right up on the 2011 holiday shopping season, the actual impact of Mobile Payments is still short of its predicted potential. So today The Official Merchant Services Blog is going to take a brief look at Mobile Payments, shaking the topic up vigorously and seeing what the Magic 8-Ball (a potential holiday gift in itself) has to say about the whole thing.





Sunshine and Positivity





One of the most commonly quoted statistics about Mobile Payments can already be found in Host Merchant Services Article Archive in a story about Mobile Payments and how bright the future is: A Juniper Research study that predicts the value of all mobile money transactions will grow from $240 billion to $670 billion. That’s a hefty number and makes for sexy copy. Other stats cited often from the Juniper Research study are that digital goods will make up nearly 40% of the market that the $670 billion figure is drawn from. And that Asia, Western Europe and North America will make up nearly 75% of the entire market for those goods.





So that’s the good news. What’s the bad news?





Two Big Problems





The bad news is mobile payments haven’t taken off as quickly in the U.S. as the media reports suggest. The Juniper study sets things in four years in the future. So the boom is still very much capable of happening. But two things are holding Mobile Payments back in this country:





    

  1. The technology isn’t developed fully yet.
    2. 




  2. Security issues scare consumers.
    3. 






The technology is sort of all over the place right now. You have a variety of different ways to process a mobile payment. And the biggest competitors in the industry (Google, PayPal, Amazon.com, MasterCard, Amex, Visa) are all still racing to outdevelop each other. Google Wallet is still not fully there yet. Near Field Communication (NFC)  is still only being tested on a small scale in the United States. The phenomenon simply hasn’t taken root.





Security Concerns





Mobile Payment Security Concerns






The other major problem holding a Mobile Payment boom back in the U.S. is security. People are already worried about credit card hacks, phishing scams and the security of their transactions with plastic or with online transactions. PCI Compliance is a hot button issue, especially in light of Sony’s security breach earlier this year as well as the recent DigiNotar Hack. So technology like NFC where people just wave their cell phone at a scanner make people nervous about how secure the transaction really is. And of course it was already shown this year at a security conference that the Square device from Square Up could be hacked and used to steal credit card information.





All is Not Doom and Gloom





While there isn’t much anyone can do but wait when it comes to the technology being developed, Host Merchant Services provides a nice set of tips for addressing the security concerns.





And the Mobey Forum provides a whitepaper extensively reviewing the ability for NFC mobile payments to take hold, and detailing ways to make that happen.





Blogger Keith Cowing also wrote this interesting read on mobile payments, addressing the issue of security and the worries consumers have over eReceipts. In his blog he asks: “The world of retail is changing faster than it ever has before. Nobody had heard of flash sales, group buying, or NFC three years ago. One of the most exciting changes will be the adoption of mobile payments and eReceipts, which will combine to provide a paperless way to checkout and manage your expenses. But when mobile payments and eReceipts become widespread, who will own your purchase data and how will they use it?”





A very compelling question. He goes on to touch on many of the same talking points The Official Merchant Services Blog brings up about mobile payments. I’ll leave you with Mr. Cowing’s final point: “When a customer visits your website, walks into your store, makes a purchase, gets an eReceipt, or talks about your brand on Facebook, these are all touch points in an ongoing customer experience. Your brand is represented by every step along the way and doing the right thing for your customer is doing the right thing for your business. When it comes to mobile payments and eReceipts, providing a convenient and simple solution is part of the customer experience. “





That’s exactly what it’s going to take for Mobile Payments to reach those lofty Juniper Research predictions. The customer has to experience mobile payment as a convenient and simple solution to their transactions. That’s when the mass of consumers will just seamlessly shift their gears (and their dollars) into mobile payments.