Financial services providers across the spectrum have increasingly sought to leverage digital asset technologies over the past few years. Now, Raise plans to launch its digital gift card platform, built on blockchain technology.
The Chicago-based startup raised $63 million in its latest funding round, which further bolsters previous investments from companies like PayPal and Accel. In an interview with Coindesk, Raise Founder and CEO George Bousis said the company differentiates itself by offering a digital Smart Card that is a “fully on-chain, programmable retail currency.”
Gift cards have become one of the most popular gifts, both for others and for personal use. Consumers are buying gift cards not only for their flexibility but also because prepaid cards are increasingly integrated into loyalty programs and promotions.
Equal Popularity
While physical gift cards remain the top choice, data from Javelin suggests that digital gift cards could be equally popular by the end of the decade. Digital gift cards are much easier to purchase and send, and they also allow the sender to personalize their gift with videos or messages.
However, security concerns may impact digital prepaid cards. There’s the risk of fraud or unauthorized access, as well as the possibility that gift card details could be exposed in a data breach. Additionally, cybercriminals could duplicate and deplete a digital gift card before the recipient has a chance to use it.
Leveraging Smart Contracts
Blockchain mitigates many of these security risks because it doesn’t store information in a single location. As a decentralized platform, it shares financial data across the chain. The records stored on the blockchain are encrypted and immutable, making it harder for criminals to access and duplicate.
Blockchain also improves the gift card experience. Blockchain transactions happen nearly instantly, so gift cards balances are updated in real-time.
The decentralized model reduces the need for third-party intervention, which can lower the expense of blockchain transactions. Costs can also be further reduced by smart contracts—such as those that power Raise’s Smart Cards program—allowing actions like balance adjustments and refunds to be programmed and automatically executed.
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