Blackhawk Network Takes Gift Cards for an Uber Ride Into the Sharing Economy

By Jim Daly
@DTPaymentNews

The ride-sharing service Uber is strongly associated with mobile apps, not with plastic. But prepaid card providers such as Blackhawk Network Holdings Inc. are finding new opportunities in the so-called sharing economy exemplified by Uber, in which drivers using their own vehicles offer taxi-like services to riders.

Talbott Roche, chief executive of Pleasanton, Calif.-based Blackhawk, told investors on the company’s third-quarter earnings conference call earlier this month that the firm would be launching multiple closed-loop cards for various companies, including Uber. In fact, Blackhawk Network recently began selling Uber gift cards at locations of The Kroger Co., the nation’s biggest stand-alone grocery-store chain, and Sears Holdings Corp..

More sales locations are coming, says Teri Llach, Blackhawk’s chief marketing officer. “We’re continuing to talk with everybody,” Llach tells Digital Transactions News.

Blackhawk Network is best known as a gift card provider. The company distributes cards in 45,000 retail locations, especially grocery stores, and provides the racks branded as Gift Card Mall. The racks typically display cards from dozens of different merchants.

San Francisco-based Uber, which did not respond to requests for comment from Digital Transactions News, also has begun offering gift cards through another provider at such retailers as Wal-Mart Stores Inc. and GameStop Corp.

As the popularity of sharing-economy firms such as Uber, its rival Lyft, and apartment- and home-renting service Airbnb grows, Blackhawk sees a corresponding new market for gift cards. “We think that those are fruitful areas for us to approach,” says Llach.

Blackhawk’s pitch for the new firms is that, unlike the experience at convenience stores or other types of in-and-out merchants, a consumer’s grocery-store visit is relatively long, giving a prepaid card on display a greater opportunity to be seen.

“You get people in there to shop 45 minutes to an hour,” Llach says. “We have a chance to really interact with our customers.”

Blackhawk’s Uber cards, which are not reloadable, are sold in denominations of $25 or $50. A third variant accepts variable-amount loads of $15 to $500. Card value can be loaded into the Uber app.

The Bancorp Bank issues the Uber card, and Blackhawk uses Topps Digital Services for processing. Uber’s Web site says online card purchases are “coming soon.”

Even though Uber users tend to be “digital natives” and would be natural users of virtual gift cards, Uber may have paired up with Blackhawk and plastic cards because of Blackhawk’s extensive reach, says researcher Ben Jackson, director of the prepaid advisory service at Maynard, Mass.-based Mercator Advisory Group Inc.

“Prepaid cards provide an opportunity for someone who was not a user to give someone who is a user free rides,” Jackson tells Digital Transactions News by email. “So maybe Mom and Dad could give their kids an Uber gift card and say ‘Now you don’t have an excuse not to come and visit.’”

Gift cards also could encourage recipients who haven’t tested Uber a reason to try the service, Jackson adds. “There are plenty of possible uses, and they probably all apply to some degree,” he says.