Less than one year after the acquisition of digital gift card platform Gyft in 2014, First Data announced the acquisition of Transaction Wireless Inc., who provides open and closed loop prepaid and store-branded digital gift card management, on July 14th. Financial terms were not disclosed for either acquisition.
First Data has over 6 million merchant and financial institution clients across 70 countries offering a suite of payment services, but in the last year the company has made two notable investments related to digital gift cards. According to Mercator Research, the volume loaded onto gift cards increased 9 percent in 2014, although less than 5 percent of the total gift card load volume is on virtual gift cards.
The acquisition of Transaction Wireless increases First Data’s capabilities and services offerings related to digital gift cards and reloadable prepaid cards. Whereas Gyft is a platform for purchasing digital gift cards the latest acquisition provides First Data with the ability to distribute digital cards for merchants and offer more services in terms of digital gift card and prepaid card management.
First Data Executive VP Barry McCarthy said the Transaction Wireless acquisition will enable the company to offer an “integrated, complete and comprehensive prepaid gift card solution at scale.” McCarthy further elaborated how the acquisition will complement their physical gift card processing and solutions as well as the Gyft acquisition to better help clients “expand and accelerate their gift card programs.”
Transaction Wireless has several major merchant clients using their services today including many well-known restaurants and retailers such as Domino’s Pizza, The Cheesecake Factory, Buffalo Wild Wings, California Pizza Kitchen, Overstock.com, Lowes, Lands’ End, StubHub and more. As an additional benefit of this acquisition, First Data will have the opportunity to win over existing Transaction Wireless clients that don’t use First Data for payment processing and other services.
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