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Subway named an initial Openbucks' gift card payment partner

September 13, 2011

Openbucks launched its Gift Card Payment Network at TechCrunch Disrupt, a technology-focused conference taking place this week in San Francisco.

The network allows consumers to use gift cards from partner retail brands as payment for online games and ecommerce sites. Among Openbucks' initial partners is Subway Restaurants.

Openbucks' objective is to turn gift cards into a convenient online purchasing and payment method and is ideal for people who don't have a credit card or prefer not to use them when paying online.

"We've created Openbucks to provide consumers with a simple and safe way to pay online – similar to cash in the brick-and-mortar world," said Marc Rochman, CEO and founder of Openbucks. "Twenty-five percent of U.S. households and most U.S. teens have no or very limited access to credit cards, and many consumers are leery of giving out financial information. We're aiming to give these people a frictionless way to purchase online."

After purchasing a gift card at one of more than 100,000 partner locations in the U.S. and Canada, consumers can use it for hundreds of online games, including Aeria Games, Artix Entertainment, Bigpoint and World Golf Tour, and for e-tailers.

For example, a consumer who wants to buy new golf gear in World Golf Tour or game credits for Battlestar Galactica Online can do so by entering a Subway gift card number and pin, in lieu of a credit card.

Leveraging prepaid market

Consumers using Openbucks do not have to worry about going over budget, getting a bill at the end of the month or filling out payment forms at the end of a check out process.

Online merchants can add the Openbucks payment option to their shopping cart through an application programming interface (API).

Retail gift card issuers can integrate with Openbucks through the company's relationships with the main processing companies, including Ceridian Stored Value Solutions and Fifth Third Bank.

Itamar Kandel, president and co-founder of Openbucks, said the gaming industry was the ideal place to get the company off the ground because beta testing showed that up to 74 percent of those who made an in-game purchase using a gift card through Openbucks had never bought virtual goods before.

"We are building the world's largest prepaid distribution network, leveraging existing popular gift card programs," Kandel said. "Virtual goods purchases are projected to reach $10 billion by 2013 so we believe the gaming market is a great place to start. This is something our retailers and gaming companies are loving."

Besides Subway, other initial retailers participating in the network include Circle K, CITGO, Hess and Sports Authority, which collectively have more than 41,000 stores and are distributed at more than 60,000 additional points of sales.

Retailers can boost their existing gift card programs by making their gift cards a preferred and recurring way for consumers to pay online, driving foot traffic from online to offline (O2O). Retailers receive free online exposure and earn a profit from sales captured in the shopping cart of third party merchants via an embedded mini digital store, a proprietary technology for which Openbucks has several pending patents.

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