February 19, 2020
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How Apple Pay and similar technologies could help grow jobs in Maine

Portland-based CashStar is in a fast-growing segment of the gift card industry that stands to benefit from the way tech giants Apple and Google are changing how people pay for things.

Apple debuted Apple Pay aboard its iPhone 6 earlier this year in a deal with major credit card companies that has encouraged retailers to pay attention to and invest in technology to accept mobile payments.

The New York Times reported last week that Apple’s push has prompted more major retailers to invest in near-field communication devices, allowing a person to pass their phone in front of a device at checkout to pay.

The upside for CashStar is that its business is based on digital gift cards, which can merge with a retailer’s loyalty programs, promotions or other programs if the technology is in place.

“It will help drive consumer use of mobile payments… and the overall push for [near-field communication] across the industry is going to push modernization of [point of sale systems] on the merchant side, and both of those benefit CashStar,” CashStar CEO Ben Kaplan said.

While Apple’s high profile has given a boost to those types of payments, Kaplan said advances in other mobile payment methods will benefit CashStar as well.

“CashStar’s approach is to be completely neutral, to be Switzerland relative to the different types of wallets and payment mechanisms that our clients want us to use,” Kaplan said.

There’s a clear future in mobile payments but widespread use of near-field technology is still years away. Other forms of mobile payments are still moving ahead and have CashStar’s attention, Kaplan said, as about 51 percent of the U.S. population owns a smartphone.

“As these consumers get used to using their phones in more and different and interesting ways — whether payments or apps or communications — that’s all an engine behind our growth,” Kaplan said. “Our business model is transaction-driven, and the more important mobile is to merchants, the more they’ll want to have mobile and digital gift cards.”

Digital gift cards are expected to make up about 7.2 percent of a projected $140 billion in U.S. gift card spending by 2016, more than doubling its share of the overall gift card market in 2013, according to consultants at CEB TowerGroup.

 


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