This article discusses how Bluetooth Low Energy (BLE) technology could enable new contactless payment methods at retail stores. BLE allows smartphones to detect signals from antennas installed at stores. Partnerships between stores and payment companies like Apple or PayPal could allow customers to pay for in-store purchases by authorizing payments through mobile apps on their BLE-enabled phones without physical card interaction. The technology has potential benefits for customers, merchants, and payment providers in driving new payment and marketing ecosystems. However, payment networks may view it as a threat if it bypasses their existing models.

1. DIGGING DEEPER WITH
CASHSTAR:
The Digital Gifting Phenom
APRIL 21 - 25, 2014 Visit PaymentWeek.com
The World of Payments
Powered by BLE
Confidence in Mobile
Payments Takes a Blow
with Heartbleed
Wal-Mart Expands
With Money Transfer
Services

2. 2
F E A T U R E D A R T I C L E S
Felix Shipkevich
FOUNDER
Jason Mongiello
DIRECTOR OF MARKETING
GRAPHIC DESIGNER
Kevin Xu
EDITOR
CONTENT STRATEGIST
Andrew Barnes
MANAGING EDITOR,
EMERGING PAYMENTS
Kyle Dowling
CONTRIBUTING WRITER
Jane Genova
CONTRIBUTING WRITER
Michael Foster
CONTRIBUTING WRITER
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Week should be directed towards our
editor.
M A R K E T P L A C E
T E C H
E M E R G I N G P A Y M E N T S
Digging Deeper with CashStar:
The Digital Gifting Phenom
Payment Week sat down with Ben Kaplan, president
and CEO, to discuss branded currencies for retailers,
the business models they are disrupting, and the
market inefficiencies on which they are growing
their business.
S P O T L I G H T A R T I C L E
4 - FDIC Lists Gov Sites for Cyber Threat Updates
3 - Confidence in Mobile Payments Takes a Blow with
Heartbleed
I N D U S T R Y V O I C E S
6 - Bitcoin to Enter Final Frontier
7 - Apple’s iTunes Has Almost 800 Million Credit Card Linked
Users
A P R I L 2 1 - 2 5 , 2 0 1 4
8 - The World of Payments Powered by BLE
14 - Digging Deeper with CashStar: The Digital Gifting
Phenom
11 - Frequent Flyer Miles: Perils of Unregulated Currencies
13 - Wal-Mart Expands With Money Transfer Services

3. T E C H
3
Mobile
Confidence in Mobile Payments Takes a Blow with Heartbleed
By: Michael Foster
W
hile Heartbleed highlighted the security
risks that still exist online, banking and
payments services remained largely
unaffected. Most banks’ websites and apps weren’t
affected by the Heartbleed bug that exposed
vulnerabilities across the web, according to the
American Banking Association.
However, the bug has a lot of users worried, because
it impacted a number of popular sites, like Twitter,
Gmail, OkCupid, and Flickr.
In these cases, mobile apps were just as vulnerable,
since they connect to servers to process data
requests encrypted through OpenSSL, meaning
that a user who sticks just to mobile was equally
at risk.
Google apps were widely affected, including
Google’s in-app payment system, which has left
a lot of users worried that online transactions,
particularly mobile payments, are substantially
less secure than they really are.
Smaller apps that process mobile payments were
also affected, according to Trendmicro.com, which
found 39 online payment-related, 10 shopping-
related, and 15 bank-related apps that were
vulnerable to Heartbleed.
TrendLabs recommended that people “lay off the
in-app purchases or any financial transactions
for a while (including banking activities)” until
developers fix the problem.
While this may seem excessive to mobile payment
professionals who know that the vast majority
of mobile payment apps and web services were
not affected by the bug, the problem is a serious
headwind for the mobile payment movement.
In a move to prevent a Heartbleed Part II from
ever happening, more than a dozen leading tech
companies including Google, Microsoft, and
Facebook are bank rolling the Core Infrastructure
Initiative, a non-profit dedicated to bettering the
web at large.
The Core Infrastructure Initiative will first focus on
OpenSSL, in hopes of improving a critical part of
online security.
Image credit: snoopsmaus

4. 4
T E C H
4
Security
FDIC Lists Gov Sites for Cyber Threat Updates
By: Gregory Sweet
T
he FDIC recommends
financial institutions
subscribe to government
alerts to monitor for data
breaches.
The announcement comes after
news the Heartbleed bug may
have infiltrated up to 66% of
OpenSSL encrypted websites.
The FDIC is encouraging banks
and payment services to utilize
a variety of services in order to
stay current with today’s online
security concerns.
Director of the FDIC’s Division
of Risk Management Supervision
Dorren Eberly explains the
importance of monitoring for
cyber threats, “We believe that
financial institutions and their
technology service providers
have been managing system
updates to mitigate potential
vulnerabilities in an effective
manner…financial institutions
may benefit from greater
awareness of the resources
available to identify cyber-
related risks as quickly as
possible.”
FDIC Approved Sites
• United States Computer
Emergency Readiness Teams (US-
CERT). Run by the Department
of Homeland Security, US-CERT
helps coordinate information
sharing around cyber threats and
vulnerabilities through its Cyber
Awareness System (NCAS).
• U.S. Secret Service Electronic
Crimes Task Force (ECTF). ECTFg
coordinates local, state and
federal law enforcement with
the private sector to help fight
cyber threats.
• FBI InfraGard. A forum for
sharing information between
the FBI and the private sector,
InfraGard has more than 60
chapters that host local meetings
in their geography.
• Regional Financial Services
Coalitions. Regional industry
coalitions can help coordinate
between the private sector and
local law enforcement. Check
here for groups in your region.
• Information Sharing and
Analysis Centers (ISAC’s). ISAC’s
can help provide incident alerts,
response and mitigation and
coordinate information sharing
between different parties. Check

5. T E C H
5
out the National Council of ISAC’s to find out more.
• In addition to the list provided by the FDIC,
the FCC’s Small Biz Cyber Planner is a service for
creating a customized cyber-security plan.
Heartbleed Advice for Merchants
While most banking sites and payment apps
are reportedly not affected by the bug, servers
connected to such services may have compromised
confidential passwords and session keys. Mobile
apps offering in-app purchases are also susceptible
to the software vulnerability in OpenSSL.
A patch for Heartbleed was released soon after the
vulnerability was announced, but retailers should
review the following steps to ensure they are
secure:
• Test web infrastructure for flaws—but make sure
to use vetted testing tools from reputable vendors.
• Contact web security vendors, who are likely to
already have software patches ready to solve the
problem.
• If a company does its own software maintenance,
it should recompile its OpenSSL library.
• Revoke and reissue SSL certificates, a step that
will likely require technical assistance from security
vendors.
• Monitor for an increase in chargebacks, unusual
account activity and other signs that might point
to fraud.
Analysis of the Heartbleed bug means that
supposedly secure information could now be in
the hands of criminals. To move forward, the best
financial institutions can do is install proper
OpenSSL patches, be on the watch for suspicious
account activity and monitor for future data
breaches.

6. 6
E M E R G I N G P A Y M E N T S
6
Bitcoin
Bitcoin to Enter Final Frontier
By: Kevin Xu
S
ome view bitcoin and
digital currencies as the
next frontier in payments.
It seems only fitting that bitcoin
is going to the final frontier.
In a preliminary design
partnership between Dunvegan
Space Systems and Deep Space
Industries, tiny satellites will be
launched into low earth orbit and
will serve as a broadcast relay
for the latest bitcoin blocks.
Called BitSat, the non-profit
project aims to provide resiliency
and accuracy to the bitcoin
blockchain.
The blockchain serves as a record
of every transaction made with
bitcoin.
Computers work to solve complex
algorithms, and those who solve
them are awarded a set amount
of bitcoin.
The bitcoin network itself is
peer-to-peer, so computers need
to work in unison to both update
and accept the blockchain.
BitSat will ensure the prevention
of “spoofing” or the fraudulent
awarding of bitcoin along with
network attacks by becoming a
third-party marker of accuracy.
Dunvegan Space Systems, the
space-flight company behind
BitSat will take donations for
the project via bitcoin processor
BitPay.
Deep Space Industries is
dedicated to operations and
resources for ventures in space,
and aim for cost-effective
measures to carry them through.
BitSat will be a test for both
companies to provide further
ventures in space, including
creating a space-based network,
and open-source, cost efficient
space travel.
“Private spaceflight is breaking
big, driving down costs so that
great ideas like BitSats are
within reach of even volunteer
nonprofits. We want to keep
bitcoin healthy and free by
finding alternative ways to
distribute block chain data”
says Dunvegan Space Systems
founder Jeff Garzik.
Image credit: Wendy Harman

7. E M E R G I N G P A Y M E N T S
7
7
I
n a second quarter earnings call, Apple’s CEO
took questions regarding the state of the
company, but more importantly, hinted at the
staggering numbers that would make the rumored
Apple mobile payment system viable.
It’s no secret that iTunes is one of Apple’s main
revenue drivers, “thanks to an incredible ecosystem
and our very large, loyal and engaged customer
base,” says Cook.
He goes on to say, “We now have an almost 800
million iTunes accounts, most of these with credit
cards.”
These accounts come from the massive ubiquity
and consumer adoption rates of Apple devices.
Internationally, Apple retail stores have popped
up in Brazil and Turkey and now reach 15 different
countries.
In China, Apple has reached $10 billion in revenue
thanks to iTunes and retail device sales in one
quarter alone.
It’s an interesting dynamic in that, while Apple
is known mainly as a technology company that
releases upscale gizmos, we should think of these
devices as an endpoint for content delivery thanks
to unmatched loyalty on both the hardware and
software sides.
A number of businesses have sprung up with their
own digital marketplaces, including Microsoft,
Google, and Amazon, which has plans to enter
the physical retail world with its Kindle checkout
system.
However, Apple seems unmatched when it comes
to marrying the popularity of its devices and their
usage to spur payments.
It’s likely that the potential Apple mobile payment
system is more a question of “if” rather than “when.”
Credit, Debit, & Prepaid
Apple’s iTunes Has Almost 800 Million Credit Card Linked Users
By: Kevin Xu
Image credit: Mike Deerkoski

8. 8
E M E R G I N G P A Y M E N T S
8
Card Solutions
The World of Payments Powered by BLE
By: Sridhar Chityala
T
he words Payments, Disruption, and Interest
seem synonymous.
Very few business domains have attracted as much
interest as the world of payments.
Google, Amazon, Apple, Facebook and even
Starbucks to some extent have all entered the
payments game and yet their core business is
anything but payments.
What is spurring this momentum?
The prolific growth in mobile payments is a clear
driver in conjunction with the broad reach of smart
phones and message capable conventional mobile
phones. The mobile payments market is expected
to grow from about $14 billion in 2013 to $280
billion by 2018.
Also look at the announcements of PayPal,
Starbucks, Amazon and Square on volumes of
mobile payments processed by them in 2013 and
the first quarter of 2014 and the numbers are
very compelling. The dollar value of payments
processed is in the billions.
Transaction volume is driven by a number of
technologies that are at play here.
These include mobile apps, card readers in mobile
devices called dongles that can process card based
payments (Square,Amazon etc), mobile wallets with
the much touted NFC capability, mobile wallets
with HCE (Host Card Emulation) capability (being
pushed by Google), and the emerging Bluetooth
Low Energy (BLE).
Apple (iBeacon) and PayPal (Beacon) are behind
the BLE push and they’re rapidly gaining interest
in the marketplace. There are over 300 million
iPhones that can connect to Apple’s iBeacon
platform excluding millions of Android phones.
What is BLE technology and how does it drive a
Image credit: Estimote Beacons

9. E M E R G I N G P A Y M E N T S
9
9
payments transaction?
Bluetooth Low Energy is a communication frequency
that runs on a smartphone and has a range of
40 to 50 meters (as compared to a NFC phones
which are narrow band). The BLE enabled phones
are immediately recognizable when a customer
walks into a store or venue that has an antenna or
antennas installed there.
As an example I walk into Wal-Mart or a CVS
Pharmacy that is BLE equipped and at both these
venues, Apple’s Passbook app or PayPal Mobile app
is able to immediately recognize the signal of the
iBeacons or Beacon.
This capability opens a new vista into the world of
payments.
Think of the Apple’s App store on your mobile
device. You buy a book, software or subscribe to a
sports channel or buy a ticket.
At checkout, you enter your credentials and your
payment is initiated and processed. You get an
email confirmation of the purchase. There is no
physical interaction, and the payment between the
merchant and Apple happens in the back end.
Extend this into the world of retail.
Imagine Wal-Mart and Apple or PayPal and Wal-
Mart have a partnership to accept payments
through BLE.
When a customer walks up to checkout for goods
and says that he wants to pay with his iTunes
account or PayPal account, all he does is enter his
details on the mobile app and the confirmation
of the payment goes to the merchant register. A
receipt is sent to the customer and the customer
collects the receipt for his goods at the store and
walks away.
There are no scanners, no physical usage of the
payment card, no swiping, no transport of data
between the POS device to the processor, etc.
The technology sounds very intriguing and given
that between Apple, PayPal and Amazon, there are
hundreds of millions of customers registered with
a payment method combined with the enormous
trust that has been built with these brands makes
this model extremely attractive.
The data that is collected can now be mined and in
partnership with the participating stores, a range
of marketing and loyalty offers can be presented
to the client. Payments, marketing offers, discount
coupons, special promotions, and location based
services – we are probably at the precipice of a
new ecosystem.
Let’s also examine the economics and operational
aspects of this model.
From a customer vantage point – there’s no
extra cost. Smartphones are equipped with BLE
technology, they’re already a registered PayPal or
iTunes account holder and they have the mobile
app.
From a merchant vantage point he has to install
the BLE antennas and they are very modestly
priced. They fully integrate with Apple, or PayPal
or Amazon, and these companies are testing this
platform today.
For illustrative purposes I have used Apple and
PayPal but there is nothing limiting financial
institutions and tech companies who desire to play
in this new BLE beacon ecosystem.
The technology offers great potential and is
one that may find resonance with all players in
the ecosystem – merchants, customers, service

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E M E R G I N G P A Y M E N T S
10
providers, processors, issuers and even networks.
Payment networks may look at this with some
skepticism, namely whether this could open up a
new world with a different payment scheme that
bypasses their model – this remains to be seen.
The operational model of accepting and supporting
payments from many players including Apple,
PayPal, Amazon, Facebook or any other provider is
perhaps being addressed.
The adoption models for any new payment scheme
is driven by simplicity, convenience, ubiquity, trust,
security, reliability and the experience reflecting
an integral part of their daily lives.
Finally the cost to the customer and merchant to
deploy the model seems low enough to be very
promising.
Both Apple and PayPal enjoy a loyal customer base
that supports this model. They have the intrinsic
ability to market and execute. The next wave of
retail revolution and payment enablement may
begin with BLE.
ABOUT SRIDHAR CHITYALA
Sridhar Chityala is an advisor and consultant to various firms that focus on
product innovation, and to private equity and venture capital firms making
strategic investments on emerging technologies. Sridhar is presentlyChairman
& Fonder of CKL Partners LLC, and Senior Advisor to SVX Group. Sridhar was
executive vice president and chief eCommerce officer at Wachovia, where
he was responsible for all internet, intranet and mobile strategic direction,
execution, customer experience integration and online brand articulation.
Prior to that he was the Executive VP and Head of Telecom sector at Citi Corp
in the Credit Card group. From 1999 to 2005 he was Executive vice president
and eBusiness executive in Chase Financial Services and was responsible
for the e-commerce, online marketing, payments and e-business initiatives
of Chase’s diverse Consumer and Middle Market business streams. Prior
to joining Chase he was Chief Operating Officer and Vice Chairman of the
Financial Industry Foundation/Lafferty Councils, responsible for strategic
consulting and advisory services to major banks and financial institutions in
the United States, Europe and Asia regarding marketing, distribution, retail
services, e-commerce, cards, and payments issues. Sridhar spent three years
managing the National Australia Bank Group’s strategy, policy, operations,
procedures and strategic projects for Global Payments, Cards, Marketing,
Distribution and e-commerce.
He is a Co-founder of the Global Payments Council, World e-money council, a board member of various payment
bodies and associations and is recognized as an industry expert on retail distribution, payments and e-commerce
through published articles and appearances at industry conferences.
Sridhar holds a Graduate Management Qualification from the Australian Graduate School of Management at the
University of New South Wales, Sydney, Advanced Management Program from Stanford Business School and a MS in
Computer Science from the Indian Institute of Technology, Bombay. He has also attended management programs at
MIT and the Senior Executive Leadership Management Class at JP Morgan Chase.

11. E M E R G I N G P A Y M E N T S
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11
Card Solutions
Frequent Flyer Miles: Perils of Unregulated Currencies
By: Jane Genova
“B
anana Republics.” That’s what some users
of Frequent Flyer Miles (FFM) have been
calling a number of the airlines which
issue those currencies.
And, yes, they are currencies. Not just one aggregate
currency system. Each airline establishes the terms
and conditions for its own FFM program. Each is
operated as independently as is the currency of the
U.S. versus the currency of China or that of Germany.
Like each of those national currencies, the airline
currencies have actual transactional value.
For more than three decades they have been
exchanged for airline trips, then for lodging. More
recently, some of issuers allow their currencies to
be used to purchase merchandise such as consumer
electronics. In addition, more of the currencies have
the same liquidity of cash. That’s happening via
third-party payment systems such as Paypal and gift
cards through Amazon. The cash can be spent at a
retailer, transferred to someone else or deposited in
a bank account. As payment technologies continue
to evolve, there will be more options.
In some circles, the mood is turning ugly regarding
FFMs because of the myriad changes a number
of major airlines have made in the terms and
conditions. They include United and Delta. Those
airlines didn’t need government approval for this.
Their currencies aren’t regulated. There is no
equivalent of the Federal Reserve.
During the end of the 1980s and the beginnings of
the 1990s,there had been a number of lawsuits which
generated some constraints on what airlines could
or could not do with their programs. Essentially,
though, each remains relatively autonomous in how
each airlines configures the point system and the
ways in which the currency is allowed to be “spent.”
Among the recent changes, beginning on February
1, 2014, United boosted the number of FFMs needed
for a first-class ticket to the Middle East from the
U.S.That applied to both its own planes and to those
of its partners. For its own, the increase was around
30,000 miles. For partners’ it has been around
85,000 miles. In addition, it specified new spending
levels in order to qualify to even participate in the
program.
Next year, Delta is introducing another form of
game-changer. FFMs will be calculated on the
amount of money spent, not miles traveled. This
Image credit: Andrei Dimofte

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E M E R G I N G P A Y M E N T S
12
shift could leave the Everyman flyer grounded.
Businesspeople and jet-setting hipsters are the
ones who have the resources to pay top dollar for
the flight they want when they want it. Therefore,
they will receive the FFMs, not Everyman who plays
every angle to save a few bucks on flying.
Another rant among those using these currencies
is that a standard perk is vanishing. That’s the
upgrade from coach to business class Delta had
given to frequent flyers when the better seats were
empty. Last March that was no longer available on
a number of its domestic flights. As a competitive
advantage, some airlines are retaining this feature
– for now. But frequent flyers are wary that overall
the currencies are being devalued, on several fronts.
Obviously, with all the modifications, the value of
the mile traveled or the amount of money spent is
unstable. That makes this asset as volatile as those
in banana republics. At one time couples stored
their miles, planning for plenty of no-cost travel
during their retirement. Now no one can treat any
part of these currencies as “bankable.” Perhaps the
new attitude will have to be: Use it or lose it.
The airlines claim the modifications are needed
because of their own growing operating expenses
and investments in improvements such as seats
which turn into beds.
Clearly, users of FFM are vulnerable. But, from a
business point of view, so are the issuers of the
currencies. The institution was begun as a loyalty
initiative back in 1981 by American. Ironically, as
some airlines play fast and loose with the rules
of the game, their particular FFM programs could
provide strong disincentives for both individuals
and organizations to switch to other carriers. That
movement could be accelerated if their competitors
create totally different kinds of rewards programs.
FMM could go the way of giving out drinking glasses
at gas stations for a fill-up. In addition, lawsuits
could be filed and there could be an outcry for
increased regulation.

13. 13
M A R K E T P L A C E
13
Industry Leaders
Wal-Mart Expands With Money Transfer Services
By: Kyle Dowling
I
t looks as if it’s time for the legendary powerhouse
money transfer services of Western Union and
MoneyGram to either move over or step up their
game. Another industry tycoon is gearing up to
come in and take them both on, offering lower fees
and a branded name to back it up. You guessed it…
Wal-Mart.
As recently reported by the Chicago Tribune,
Wal-Mart is launching their own money transfer
service—“Walmart-2-Walmart”—which will permit
shoppers to send and receive cash from both family
and friends at the more than 4,000 stores across
the United States and in Puerto Rico. Offered at a
lower rate than competitors, Wal-Mart claims the
new service will “cut fees by up to 50% compared
with similar services elsewhere,” according to USA
Today.
As it sits, the Walmart-2-Walmart service—
which will not be offered online or throughout
international stores—will allow customers to
“transfer up to $50 for a fee of $4.50, compared
with between $4.75 and $5 at rival services,” states
the Tribune. Customers will be limited to $900 a day
unless more is required, in which case additional
information must also be provided by the customer.
So, why the initiation of Walmart-2-Walmart? Daniel
Eckert, Senior Vice President of Services for Wal-
Mart, admits that company officials had received
an earful of complaints from customers about high
fees elsewhere in related services. Therefore, the
decision was made to take another stab at the
financial services market from within.
With that, while the supposed goal is to offer
shoppers more choices in their financial options,
another added bonus that cannot be overlooked is
the fact that bringing in such services will drive
more people to Wal-Mart… perhaps tempting them
to spend some of that money in the actual store.
Maybe another reason the service is not offered
online?
When approached about the news, Western Union
stated confidently that its place in the industry
is “well-positioned.” However, as true as that
is, following the announcement of Walmart-2-
Walmart, shares of Western Union went down 4%,
while MoneyGram plunged 15.6%. So we can’t say
people aren’t eager to see what Wal-Mart has “in
store”.
This isn’t the first attempt the tycoon has made to
get into the financial services game. Back in 2007,
Wal-Mart applied for a bank charter but retracted
after some disapproval from both banks and labor
unions. Yet with this new service, it appears the
corporation is ready to take a full swing at cornering
yet another market.

14. I N D U S T R Y V O I C E S
14
Andrew Barnes’ series, “Digging Deeper” is based
in Silicon Valley and focuses on startups and key
innovators and how they are disrupting digital
payments and commerce.
CashStar is a successful startup whose vision of
branded currencies for retailers is disrupting the
$120 billion traditional gift card market. CashStar
generated more than $500 million in gross
merchant sales, growing by 92 percent year-over-
year in 2013. It was recently named to both the
Forbes 100 most Promising Private Companies list
and the Inc. 500 Fastest Growing Companies list.
It’s fair to say these folks are doing something
right.
Andrew sat down with Ben Kaplan, president and
CEO, to discuss branded currencies for retailers,
the business models they are disrupting, and the
market inefficiencies on which they are growing
their business.
As a payment and commerce professional, why
should I pay attention to what CashStar is doing?
Why are digital gift solutions relevant to me?
That’s a really good question. Let’s look at what
digital gifting and digital gift cards actually are
and what they mean.
When talking about digital gifting, what you are
really talking about is mobile prepaid payments
that are branded currencies for use at that
particular retailer or merchant.
Users may refer to them as eGift cards, but that
is simply the application of a well-understood
Startup Corner
Digging Deeper with CashStar: The Digital Gifting Phenom
By: Andrew Barnes

15. I N D U S T R Y V O I C E S
15
product and payment type.
What we are talking about is a very different end-
to-end experience for the merchant, the giver, and
the recipient.
All are executed in digital form, and are redeemed
via a smart phone in-store over 50% of the time.
As a payment and commerce professional, the
application and the use of mobile payments in a
$120 billion market for traditional gift cards is
pretty important.
Can you further explain the concept of a branded
currency for a retailer?
Sure. If you take a look at the rise of retailer and
merchant mobile applications for payments, these
apps usually use a prepaid or stored value model.
It’s a form of prepaid, and you also think about
digital gift cards, which are another model of
prepaid stored value, right? In both of those cases,
you’re talking about a closed loop currency that
can only be used at that merchant.
It isn’t that you couldn’t call traditional plastic gift
cards a branded currency because they technically
are.
The difference is with digital gift cards and
mobile prepaid solutions. Users have portability,
accessibility and immediacy, as well as the ability
for offers and these currencies to be promoted and
used within digital marketing campaigns.
When these can be redeemed easily with a 2D
barcode scanner on your smartphone, the power
of digital gift cards as a branded currency is
unleashed. And that branded currency can be used
by retailers and by merchants, like Starbucks and
The Home Depot, in a really interesting range of
applications and use cases.
Almost any single consumer marketing initiative
can be enhanced by or supported by a marketing
campaign that leverages and utilizes a promotion
featuring digital gift cards or branded currency.
For instance, marketing campaigns that drive new
customer acquisition, re-engagement, new location
openings, new product launches, in-season sales,
off-season sales, or in-store sales versus online
sales.
How does the distribution work, and what are your
retailer and merchant clients telling you that they
want?
In this case, obviously, we’re not talking about
Andrew sending his nephew a digital gift card to
Best Buy.
What we’re really talking about is perhaps Best
Buy or Staples or Starbucks sending out digital gift
cards to incentivize consumer behavior.
Those types of promotions that leverage this
concept of a branded promotional currency is a
really, really interesting set of applications for
CashStar and one which our retailers and merchants
are pulling us into.
The company wasn’t founded with this vision in
mind.
The company was founded with the vision of
resolving the incredible inefficiencies and costs
in the plastic gift card supply chain. We said we
were going to automate and streamline them into
a digital, mobile form factor.

16. I N D U S T R Y V O I C E S
16
On top of that very strong business, we’re now
defining and building the market opportunity for
using digital gifting as a branded promotional
currency, a currency that retailers and merchants
can use in a range of consumer markets and
applications.
So whose business model are you disrupting, if any?
I think that there are a few and I think they’re at a
couple of different levels. In the near term, we’re
disrupting the plastic gift card models currently
dominated by players like Blackhawk Network and
InComm.
I think more broadly, and more strategically, we are
part of the mobile payments and mobile marketing
disruption that is occurring in both payments and
omni-channel retail.
You’ve mentioned mobile a couple of times, can you
talk about what mobile means to your business and
how you are innovating with it?
Everything. Yes, the short answer is that it means
everything.
The longer answer is that the future of many
different day-to-day consumer experiences will at a
minimum be instantiated and supported by mobile
or will be completely encapsulated in mobile.
Our own mindset from a development and strategy
perspective has changed from mobile first to
mobile always. Everything we do as a company, in
some form or fashion accounts for, prioritizes, or
enhances our mobile strategy.
It’s because the user experience that we will rely
on and that we support will primarily be a mobile
one. It doesn’t mean that we’re not supporting
additional modalities, we are. We’ve very, very
flexible.
Keep in mind that the market still has a long way
to go from an adoption perspective. However, our
business and our future are linked to the growth
and adoption of interesting and exciting mobile
use cases.
Let’s go back to distribution channels. How are
you disrupting B2B distribution and partnerships
pertaining to the digital gifting platform for
retailers and merchants, and which is more
important?
They’re both important, and they’re pretty different.
I’ll tackle each independently. CashStar originally
started its business focusing on the merchant to
consumer experience. For instance, how consumers
could buy gift cards for friends, for each other,
for themselves, and how those use cases can be
instantiated in a digital and mobile experience.
The second wave was when CashStar began to
invest and build out solutions for helping merchants
distribute gift cards directly to other businesses,
to other channel partners, to loyalty programs, to
airlines, and to gift card distribution houses.
That market, the traditional B2B gift card market, is
very dynamic and it’s one that CashStar has made a
great amount of progress in this past year.
So let’s tease this out. There are a lot of players
between the retailer and the end employee in
an incentive program or a member of a loyalty
program. You might have the credit card company
and then the loyalty platform and then several gift
card distributors. You’ve got lots of different players

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17
between the retailer and these really interesting
B2B gift card distribution channels.
Many things that we’re trying to do in gift card
distribution are to rationalize,integrate and simplify
all of these different channels and relationships
for the retailer. That goal is a big one, and we’re
making tremendous progress on it.
There’s just so many different, discreet players,
companies, resellers, distributors, between the
retailer and the end consumer in this B-to-B-to-B-
to-B-to-B-to-B-to-C distribution model. CashStar’s
goal is to try to simplify that, and by doing so
adding a lot of value to the merchant.
As you look at 2014, what big deliverables are you
committing to?
I think that there are three things, three big areas.
First is a continued rollout of innovative solutions
for digital gifting and branded currencies that
advance retailer and consumer goals in really
compelling ways.
The second piece is that I expect us to have
incredible growth this year. Just like 2013, I know
we’re going to blow the doors off from a revenue
perspective, an adoption perspective, and a new
client perspective.
The third piece involves scaling the company.
Scaling companies is hard and we’re at the stage
where we’ve got to bring in different processes and
additional people. We’ve got to be able to hire and
on-board new employees, new executives, and get
efficient people.
We’ve got to make sure that we’re able to do that
and execute on our business in a really repeatable
way even as we are innovating the entire time.
CashStar is the leading provider of omni-channel
digital gifting solutions for the world’s top brands.
The CashStar platform enables retailers and
restaurants to maximize sales, eliminate fraud risk,
increase customer engagement, and drive adoption
of mobile payments. More than 300 leading
companies rely on CashStar to power the most
innovative and advanced prepaid and digital gifting
programs, including Best Buy, Brookstone, Coach,
Crate & Barrel, Dell, Dunkin’ Donuts, Gap, lululemon
athletica, Office Depot, Petco, Pottery Barn, QVC,
Sephora, Staples, Starbucks, The Cheesecake
Factory, The Home Depot, and Williams-Sonoma.

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Would you like to be next week’s Industry Voice?
Email Kevin Xu - kxu@lamilmedia.com
Andrew Barnes, Managing Director, Emerging Payments
Barnes is a self-confessed payments and commerce “geek” working in
Silicon Valley and San Francisco. He utilizes c-level relationships in
tech, startups, retail, and financial institutions to identify emerging
market opportunities and analyze challenging business models.
Barnes recently launched “Digging Deeper,” a published series
focusing on startups and key innovators that are solving digital
payments and mobile commerce problems worldwide. He has held
executive business development positions in Asia with Sprint,
Global One, and 2Roam Mobile, and is an Advisor to the Electronic
Transactions Association (ETA). Barnes has an MBA from Waseda in
Tokyo and a BA from Penn State. He can be reached on Twitter @
AndrewinSV and Linked-in
Ben Kaplan, president and CEO
Ben brings twenty years of experience to CashStar in senior
operations, marketing, and product roles at software, e-commerce,
loyalty marketing and payments companies. Most recently, he was
Chief Operating Officer at Cartera Commerce, a leading provider of
card-linked marketing solutions for merchants, banks, and loyalty
programs. Prior to Cartera, Ben was Vice President of Marketing for
KNOVA Software and Vice President of Marketing for North Systems,
directing marketing and product management at both companies.
Earlier in his career, he held product marketing and product
management positions at Broadbase and Commerce One. Ben is a
graduate of Harvard College.
The Man Behind The Voice
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