The new joint venture combines the gift card businesses of both companies. This includes First Data’s core gift card business, Transactions Wireless and Gyft, along with FLEETCOR’s Stored Value Solutions (SVS) prepaid card services and gift card programme management assets. The new entity will provide clients with broader international reach.
The combined revenue of the businesses that are to be contributed to the joint venture by both companies was USD 362 million in 2016. First Data will own 57.5% of the joint venture and FLEETCOR will own 42.5%.
In 2015, USD 293 billion was loaded on to prepaid gift cards in the US, according to a December 2016 report from Mercator Advisory Group. The First Data-FLEETCOR joint venture capitalises on that growing marketplace, creating new ways to help merchants expand their gift programmes to leverage the evolution of consumer gifting habits. For example, in First Data’s 2016 Consumer Insights Study, respondents indicated they self-purchased gift cards more frequently, suggesting an expansion of traditional gift card application.
The collective solution capabilities of First Data and FLEETCOR will include traditional services and provide choice for clients and partners seeking digital gift card distribution. The joint venture will focus on supporting clients with digital gifting needs, from selling gift cards on their own websites, to using gift cards to drive promotions, to selling and reloading gift cards online at gyft.com.
In addition to helping issuers manage their prepaid programmes, the joint venture will help clients acquire new customers, reward existing ones, distribute the merchant’s cards digitally, lower the risk of fraud, and reduce the total cost of payment acceptance.
For more information about First Data, please check out a detailed profile of this company in our dedicated, industry-specific online company database.
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