The number of use cases related to cryptocurrency is relatively small. Especially for regular consumers, there is little to no appeal in this regard. As such, gift cards may present an interesting stepping-stone toward taking cryptocurrency mainstream in the years to come.
Gift Cards and Crypto
People who have been involved with cryptocurrency for some time now know of gift card services related to Bitcoin. Gyft and eGifter are two interesting examples in this regard. Users can purchase major brand gift cards with cryptocurrency. As such, they can – indirectly – spend cryptocurrency at said retailer whenever they feel the need to do so. It is a concept that works quite well, although still only targets a niche market.
Another interesting solution comes in the form of Fold. This mobile application lets users buy virtual Starbucks debit card balances with Bitcoin. Any excess balance can be converted back to cryptocurrency at any given time. While only limited to locations with USD transactions, it has proven to be a popular use case.
Both of these developments are pretty interesting for the gift card industry. Since gift cards are also great presents to friends and family, spending cryptocurrency can achieve many different goals. It would also highlight the potential of Bitcoin and altcoins as an actual currency, rather than being a store of value.
Finding a Bigger Market
Despite these initial successes, there’s still a long way to go. Even to this day, there is a disconnect between crypto users and the products and services which can be paid with a gift card. Bridging the gap between these two “markets” is a different matter altogether. As long as there is no really convenient solution, this business model will struggle for traction.
One of the hurdles in bridging such a gap is that the number of cryptocurrency enthusiasts is just a small fraction of the public consumer sector. There’s little incentive for retailers to add extra costs in accept cryptocurrency, or deal with its volatility, when the vast majority of customers are quite willing to pay with cash or credit/debit cards.
Different options can be explored in this regard. Merchants creating their own blockchain-based gift cards is one option. Offering more discounts when buying gift cards with Bitcoin or cryptocurrency is another option. This latter option pertains especially to physical stores selling such cards in exchange for cryptocurrency. So far, very few of them actually do so, but it is an option worth exploring
Furthermore, it seems a few startups are looking for positive changes as well. Both Zeex and Payme are making it easier and more straightforward to use cryptocurrencies with gift cards. It may not be a tried-and-tested business model just yet, but there seems to be a genuine demand for these types of solutions. Such cases are another big step toward taking cryptocurrency mainstream.
Do you think gift cards are a good option to help mainstream cryptocurrency acceptance? Let us know in the comments below.
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