Gift cards are one of the fastest growing categories in prepaid cards due to their versatility as a gifting and payment solution. Many companies are getting into the gift card space to capitalize on their growth potential. They are constantly looking for the next big channel of distribution, and devising new uses and applications to keep the gift card space exciting and fresh. Recently some companies have come up with a unique way to use prepaid gift cards –as an investment tool for the stock market.

1. Blackhawk Network introduces Stockpile's ‘Gift
Cards for Stock’ to target millenials and first time
investors
Analyst View Point Series

2. Table of Contents
Market Context
Key Insights
Market Opportunity
Innovation in Detail
PayNXT360 View

3. Market Context
Gift cards are one of the fastest growing categories in prepaid cards due to their
versatility as a gifting and payment solution. Many companies are getting into the gift
card space to capitalize on their growth potential. They are constantly looking for the
next big channel of distribution, and devising new uses and applications to keep the
gift card space exciting and fresh. Recently some companies have come up with a
unique way to use prepaid gift cards – as an investment tool for the stock market.

4. Key Insights
Leading prepaid and payments products company Blackhawk Network and Stockpile
have collaborated to launch Stockpile's "Gift Cards for Stock", which are available at
select US retailers including Kmart, Buehler's Fresh Foods, Wegman's and Safeway.
This prepaid gift card, which is redeemable online to open and fund an account with
stock, can be purchased as a gift for others or for own use. Stockpile's gift card comes
in fixed denominations of $25, $50 and $100.

5. Key Insights
According to a survey commissioned by Blackhawk in September 2015, only 28% of
American adults own stock. The survey revealed that 73% of millennials, between
ages of 18 to 34 years, do not own stock mainly due to reasons such as lack of
knowledge about the functioning of stock market and limited investment budget.
Despite these barriers, the survey found that millennials are interested in alternative
ways to invest, with 54% saying they would be interested in purchasing stock if it were
as convenient as buying a gift card in a grocery store or other retailer that could be
redeemed online.

6. Key Insights
It will be interesting to see if Stockpile's Gift Cards for Stock will become an attractive
option for millenials and if they would be eager to try it. The gift card in itself is a great
gift to teach someone about investing or experimenting in the stock market for the first
time.

7. Innovation in Detail
This is how it works – someone buys a gift card worth $50 of Facebook stock and
gifts to another person. The cardholder can go online and create an account by
entering basic information such as date of birth and Social Security number. They
then have to type in a code from the card to redeem the stock. If Facebook closes
that day at suppose $100 a share, the cardholder will own half a share of Facebook
stock. They can see the performance of the stock through Stockpile's online
interface. If the cardholder doesn’t want to own Facebook stock, they have the option
to select the same denomination of stock from other 1,000 investments that Stockpile
offers, including a market or gold index exchange traded funds (ETF).

8. Innovation in Detail
If the cardholder does not want to have a stake in the market at all, they can trade it
for a retailer gift card that functions like cash. The cardholder can also buy and sell
stocks through the Stockpile interface for 99 cents per trade and they don’t have to
pay anything for Stockpile to simply hold the investments.

9. Market Opportunity
The country's gift card market in terms of transaction value is expected to record a
CAGR of 10.4% during 2016-2020 to reach US$ 2,14,461.7 million by 2020,
increasing from US$ 1,44,115.1 million in 2016. Over the last five years the sector
has recorded a CAGR of 14.6%, increasing from US$ 74,162.6 million in 2011 to
reach US$ 1,27,968.6 million in 2015.

10. PayNXT360 View
Gift Cards for Stock presents a great example of how companies are coming up with
innovative products in the prepaid card segment to target millennials. Millennials
appreciate the convenience and security these financial cards offer and are ready to
experiment with different product categories. PayNXT360 expects competition to
further intensify in this segment and companies’ rate of innovation to increase.

11. To Know More
To know more and gain deeper understanding of
prepaid card industry in the United States, click here