Digital wallet company PayPal is expanding its digital gift card offerings by teaming up with CashStar, an omnichannel digital gifting solution platform that distributes to a large network of top brands including Best Buy, Dunkin’ Donuts and Sephora.

PayPal is integrating the CashStar-powered eGift cards, which can be purchased with a mobile device and sent to the recipient’s email or home address, to participating retailers in the PayPal Digital Gifts Store and the eBay marketplace. The partnership is also set to benefit brands that use the CashStar platform, as they will now have another distribution channel to sell their eGift cards on.

“Gift cards are an increasingly important component of the retail space,” said Thad Peterson, senior analyst at Aite Group, Atlanta. “According to the NRF, the average shopper will buy four gift cards this year.

“As mobile and ecommerce continue to grow at a faster pace than general retail, the importance of digital gift cards increases as well.”

Thriving digital gifts
Mobile gift cards and eGift cards have been gaining significant traction as 2014 ends and retailers look to implement stronger mobile strategies for the upcoming year. PayPal customers are likely to appreciate the growing number of options available for gifting opportunities.

The CashStar platform enables the user to sort through digital gift card choices by category or brand. It offers a slew of options, from restaurants including Morton’s The Steakhouse and McCormick & Schmick’s to clothing brands such as Gap and Brooks Brothers.

The customer selects the brand of choice, chooses the email or hand delivery option, and picks a delivery date once payment details have been inputted.

CashStar acknowledges that mobile innovations are changing the way customers shop, and believes that eGift cards and mGift cards are thriving due to their ability to move seamlessly across a plethora of channels.

The platform hopes the partnership will yield even more sales of digital cards and garner relationships with more retailers.

Bolstering mobile strategy
The partnership with CashStar arrives on the heels of PayPal’s November announcement that it is integrating its payments platform with the Pebble smartwatch (see story). Mobile device users that also own a Pebble wearable can now pay with the tap of a finger at restaurants, stores and local businesses that accept PayPal.

PayPal has also made itself available on other wearable platforms, including Samsung’s Gear 2, Gear S and Gear Fit.

However, entering into cross-partnerships with other major systems that have access to hundreds of brands, such as CashStar, is a mobile strategy that will bolster PayPal’s brand even higher and reach audiences across a wide variety of sectors.

Mobile gift cards are poised to be a hot trend to follow in 2015, as they become backed by mobile payments and major brands such as Amazon (see story). Consumers and retailers alike will be able to reap benefits from increased exposure to mGift cards.

“For retailers, the partnership with PayPal adds a distribution channel for CashStar, increasing their value to their clients,” Mr. Peterson said. “For PayPal, CashStar brings additional brands to their online gift card marketplace, providing additional reasons for their customers to shop with PayPal.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York