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Runa Study Reveals Growth of Digital B2B Gift Card Distribution Channels, with Branded Payments Gaining Favor as a Payment Method

25 January, 2024, 09:00 ET

This study explores evolving consumer preferences, highlighting that 41% of consumers primarily receive gift cards through loyalty and rewards programs.

LONDON, Jan. 25, 2024 /PRNewswire/ -- Runa, the global digital value infrastructure for instant B2C payouts, today published its latest study, The 2024 State of Merchant Branded Payments. The study offers new insights into consumer expectations, preferences, and behaviors surrounding digital gift cards and merchant payments.

Gift cards are increasingly central to any business’s branded payments strategy. The impact of the rewards and payment programs of leading brands such as Starbucks rewards, Walmart Pay, Uber Cash, and others demonstrates how branded payments bolster customer engagement and revenue growth. Consumers often wish to transition to merchant-branded options, primarily motivated by factors like discounts (81%), increased rewards (78%), and exclusive member benefits (71%). These findings demonstrate that merchants need to invest in their branded payment programs and make gift cards central to them in order to drive engagement and POS access.

Furthermore, Runa's research discovered that business to consumer digital gift card distribution is growing, with 41% of consumers reporting that the primary way that they receive gift cards is through various coalition loyalty and rewards programs. Consumers overwhelmingly favor flexible spending options, which signifies a growing demand for variety and the ability to tailor payout experiences to individuals’ choices. Merchants that can capitalize on this stand to boost customer adoption.

A growing proportion of consumers say they value receiving a digital balance usable at multiple merchants, and this preference is driven by immediate access to funds (60%), the convenience of bypassing traditional banking processes (56%), and the flexibility to choose from different merchants (52%). Notably, convenience (57%) and speed (51%) emerge as the top priorities for consumers when selecting their preferred method to receive funds.

The study underscores the significance of merchant-branded payment programs in fostering customer engagement, acquisition and loyalty. Compelling incentives, such as enhanced rewards (60%) and discounts at the point of purchase (56%), emerge as pivotal factors for enticing consumers to explore these programs.

“The study proves the enormous impact of branded payments, particularly digital gift cards, not only in fostering brand loyalty but also in driving revenue growth for businesses,” said Aron Alexander, CEO and Founder of Runa. “With global spending on digital gift cards projected to reach $1.7 trillion by 2026, it is imperative for retailers to integrate them into a robust branded payment strategy. This need is exacerbated by the evolving consumer landscape, whereby the preference is shifting towards enticing discounts and enhanced rewards offered by merchant-branded options, marking a clear departure from traditional payment methods.”

Other key findings in the study include:

  • 49% of people say that they indulge or treat themselves with gift cards, while 45% use them for essential purchases, highlighting the dual role of gift cards in providing both a means for enjoyment and a practical solution for everyday needs.
  • Gift cards continue to be the most popular type of corporate reward, with 51% of such rewards being given during holidays, 33% for personal milestones, and 30% for achieving performance goals.
  • When it comes to payouts from businesses or government agencies, nearly half of recipients (49%) prefer bank transfers, closely followed by 48% who favor digital wallets. Notably, a significant 36% opt for the convenience and added benefits of branded gift cards, while 34% choose the versatility of Visa/Mastercard.

To read the full report, The 2024 State of Merchant Branded Payments, click here. The findings are based on a survey conducted in January 2024, drawing insights from 1,000 US adult consumers.

About Runa:

Runa is a digital value payments infrastructure and network that enables people to pay and get paid by anyone, anywhere, instantly. The Runa network reaches more than 2 billion people and connects merchants, organizations, and individuals for fast, affordable, and data-rich payouts in more than 40 countries and 25 currencies.

Organizations of all types rely on Runa's infrastructure to power the movement of digital value and better serve their constituents. Runa provides direct connections to its network partners, enabling value to move more efficiently and economically than legacy solutions. Thousands of the world's top brands use Runa to reward, incentivize, and disburse funds.

Runa is headquartered in London with a globally distributed team. Our investors include Element Ventures, CommerzVentures, Clocktower Ventures, Volution Capital, AlbionVC, and SAP.

For more information, visit runa.io.