Why is gift card processing overlooked in brand digital transformation spend?

In a world where friction free payments, flawless e-Commerce execution, and seamless customer experiences drive success, it seems surprising that something as vital as a modern fit for purpose gift card processing engine is overlooked in many companies’ digital transformation strategies.

Today, the gift card processing infrastructure supporting many of the leading retail brand gift card programmes can arguably be described as outdated and ripe for modernisation. Legacy systems built on outdated technology architecture, in another era, for a different generation of consumer needs, now struggle to keep pace with the evolving dynamic needs of the brands who depend on them to deliver on core business goals every day.

So, why has gift card processing been excluded from digital transformation investment?

Digital transformation trends across industries

Across industries, businesses are adopting innovative new digital technologies to enhance efficiency, improve customer experience, and remain competitive. Here are a few examples:

• Retail: Mobile apps and self-checkouts have transformed the shopping experience, allowing customers to browse, pay, and receive personalised recommendations directly from their smartphones.
• Finance: Contactless payments and digital wallets like Apple Pay and Google Wallet have made transactions faster and more convenient, while mobile banking apps enable users to manage their finances anytime, anywhere.
• Hospitality: App-based ordering and reservations are becoming the norm, giving customers more control over their dining and booking experiences while streamlining operations for businesses.

Despite these advancements at the centre of the customer experience, gift card processing infrastructure has largely been exempted from retail investment budget allocation. Many programmes are still reliant on outdated and isolated infrastructure, limiting their ability to integrate and stay aligned with these digital-first innovations. The result? A missed opportunity to align gift card programmes with modern consumer expectations and business goals.

What is a legacy processing system?

Well; a legacy system typically refers to outdated technology designed and implemented in the past, often no longer suited to meet the business needs of today. For example, many older gift card systems were built as module add ons to store point of sale software, deployed on inhouse / on-premise infrastructure, and was by its nature – software designed primarily for in-store, physical card transactions. Later eCommerce  digital voucher iterations fell for the same trap – modular extensions of eCom platforms to sell gift vouchers via the brand’s website. A classic dead end strategy ignoring the multi channel sales and redemption requirements that would quickly emerge. Many third party processing systems at the time were tapped to solve that issue and inhouse moved to outsourced processing. Problem solved? Yes at the time, but perhaps not so much today. 

Far too many of today’s gift card programmes still run on legacy systems, in many cases the exact same tech engines they launched with over twenty years ago. While these systems were sufficient for a non complicated gift card solution with very narrow use cases, the gift card market has evolved beyond recognition since then, as has the consumer. The consumer today demands flexibility, speed, and seamless integration with digital wallets, mobile apps, and e-commerce platforms. They demand the Uber experience for every aspect of their daily living, and  many legacy gift card processing systems simply cannot meet these evolving expectations.

The benefits of updating gift card processing

Upgrading to a processing platform with greater core functionality can have far-reaching benefits for a business. Here’s why it’s worth considering:

Enhanced fraud prevention and security

Gift cards are unfortunately an attractive target for fraudsters, and legacy systems often lack the complete range of modern security measures needed to counter modern fraud tactics. 

These can include

• • Real-time transaction monitoring and alerting to detect suspicious behaviour as it happens.
  • AI-based fraud detection to identify patterns indicative of fraudulent activity.
  • Encryption and tokenisation to safeguard sensitive card identifier information.

• Eliminating legacy sequential card numbering that has no place in today’s digital world

• Advanced card balance checking protection to deter bad actor interest

Streamlined operations with unified systems

Somehow, there are still retail and hospitality brands today running separate physical and digital gift card processing solutions. No interoperability, dual platforms, dual reporting, dual everything. The inefficiencies in inventory management, tracking, and reconciliation hardly need pointing out. Upgrading to a single, cloud-based platform eliminates this fragmentation, reducing operational complexity and freeing up resources for other priorities, allowing businesses to run their gift card programmes more efficiently and reliably.

Upgraded functionality helping to unlock new revenue streams and marketing opportunities

A modern gift card system can also become a marketing asset for your business. It can be used to launch targeted promotions, introduce loyalty programmes, and track customer behaviour for valuable insights. These capabilities allow for personalised offers, such as bonus card values or discounts, to drive engagement and repeat purchases. By integrating with CRM and e-commerce tools, businesses can further refine their marketing strategies and create tailored experiences that resonate with their audience. New modern APIs between point of sale and the processing engine can capture key store and eCom basket content, delivering rich reporting insights to the business and transform channel sales strategies.

Hassle-free migration to modern platforms

Concerns about migration complexity often hold businesses back from upgrading their systems. However, modern platforms are far easier to integrate with today with modern simplified APIs eliminating the risk of a long, expensive transition project. With support from experienced providers, businesses can transition with minimal disruption, ensuring continuity throughout the process. This ease of migration allows businesses to unlock the benefits of a more advanced platform without significant downtime or operational strain.

How Savvy simplifies the process

At Savvy, we make managing gift card programmes effortless and transformative, turning a traditionally complex process into a seamless, growth-driving asset for your business. With our complete, end-to-end support, you can unlock the full potential of gift card revenue without the typical hurdles. Our robust processing and embedded analytics tools allow you to access real-time tracking and rich data insights that help you fine-tune your gift card programme for maximum reach and engagement.

Our unique, dedicated analytics platform has been built specifically for the gift card industry, offering a global, real-time perspective on your programme’s performance across all sales channels. Our scalable, future-ready technology grows with you, so as your business expands to new markets or introduces additional products, Savvy’s system is ready to adapt.

By converting raw data into high-value insights, our platform empowers you to make data-driven decisions that drive revenue and enhance customer engagement. From the initial setup to scaling, our solution means that your gift card programme aligns with your broader digital transformation goals, giving you a secure, efficient, and profitable tool for sustained growth.

Conclusion

As digital transformation continues to reshape industries across the globe, it’s time for businesses to rethink their approach to gift card processing. By moving away from outdated systems and embracing fully integrated, digital solutions, businesses can enhance the customer experience, streamline operations, and unlock new revenue streams.

The barriers to digitising gift card processing are real, but they are not insurmountable. With the right partner, businesses can overcome these challenges and start reaping the benefits of a digital-first approach.

If you’d like to find out more about our solutions and working with us, book a chat with our team today.