An app that allows you to take money from your gift cards and put it into your pocket.
Use case:
Many times gift cards have balances of $1 or less on them. Say you have 100 gift cards with $1 on each of them. $100 dollars is a lot of money right? However, because you can only spend the money on one card you can only buy things for $1 or less. The goal of this app is to allow people with money left on their gift cards to take that money from their gift cards and put it towards something they want to instead of being forced to buy something that is within the limit of the gift card.
Cons: The app only allows conversion from open-loop gift cards.
Market:
Global Gift Card Industry is worth billions of dollars with increasing popularity of open-loop gift cards.
My app allows to directly transfer money from gift cards to your pockets while other companies like Raise require you to sell them or somebody the gift card then get compensated.
Customer conversion: I use TikTok, Instagram and Youtube for attracting customers(Would like feedback on what would be my demographic).
@samiwhitie My first thought is this is a scammers dream, who are already scamming people using gift cards. Some sort of protections will need to be built in when it comes to money
@kalenebari Thank for you feedback. While I respect your opinion I have to disagree.First, your personal and financial information is handled by a third party that is PCI compliant. The app never touches your personal info. When you pay the account number associated with your account is used to send to a server which connects to the third party so your information is never in the front end. So to recap the only thing shown in the front end by itself is worthless and still has protections/rules on it, the money only gets routed to the financial instrument chosen by the person who created the account(so no scamming) and all your personal information is handled by a PCI compliant third-party company.
@samiwhitie He told you the problem might be a lack of trust. Your answer basically only says “but it’s no scam”. Which is hopefully true, but he raised a valid point.
@jasdaz I agree and understand what you're saying but what I was trying to point out is that scammers would have to give personal information that can be traced to them. The whole reason why scammers like gift cards is the fact no personal information like your name or address are on them unlike debit/credit cards/bank accounts, making them harder to trace. However, to use this app you would have to go through KYC(Know Your Customer) checks. And your money that you transferred would go to a financial instrument like a debit card or bank account which unlike gift cards, can be traced. Long story short in this app you are transferring money from an untraceable source(gift card) to a traceable source(debit/bank account). If I was a scammer this app wouldn't be my first second or last choice.
@samiwhitie Sounds like a regulatory nightmare in regards of all anti money laundering laws.
If you are based in the US, you might also fall under the Money transmitter federal regulation which would add even more regulatory demands for your business.
I hope you have deep pockets to pay people in suits to take care all of this for you.
@karenwnc I agree that's why I went with a third party rather than developing a system myself. It's smarter to work with a company that has already went through all federal regulations than trying to do it by myself.
@samiwhitie Sounds like a cool idea, but the challenge might be if people typically are gifted the open-looped gift card. If you have a gift card with a small balance typically you could go to a store and then use the remaining balance and then use your own credit card. So would be two transactions. I guess for online purchases you don't have that option. Also, how do you intend to monetize it? Take a small percentage of the transaction when transferring it to the banks?
good luck!