Q&A: Beyond the gift card: How digital rewards are becoming embedded in everyday life

Rewards and incentives are undergoing a quiet shift in the realm of business retail. Once associated mainly with plastic gift cards bought for birthdays and Christmas, digital value is becoming part of the infrastructure businesses use to engage customers, reward employees and strengthen loyalty. Behind this change is a shift towards greater flexibility. Rather than being restricted to predetermined denominations and standalone gift-card programmes, businesses can increasingly integrate digital rewards into existing customer and employee experiences. This creates opportunities for rewards to become more immediate, personalised and relevant to a particular transaction or need.

The challenge is that simplicity for the recipient can mean considerable complexity behind the scenes. Supporting different brands, currencies and markets requires infrastructure capable of bringing disparate systems together while maintaining a straightforward user experience. At the same time, businesses operating internationally must balance global reach with an understanding of local preferences and market conditions.

To examine how this evolving ecosystem is developing, Digital Journal spoke with Alex Preece of Tillo. Preece discusses the emergence of open-value rewards, the importance of scalable infrastructure, the challenges of international expansion and why the conventional gift card could ultimately become almost invisible as digital value becomes embedded within everyday financial products and services.

Digital Journal: The term “gift card” still suggests a plastic card bought for someone else. What has changed underneath the surface that makes rewards and incentives a much more strategic part of how businesses engage customers and employees?

Alex Preece: At Tillo, we’ve seen firsthand how much the technology has evolved. Ten years ago, digital gift cards were essentially just physical gift cards stripped of their plastic – retaining fixed denominations, legacy distribution models, and a rigid definition of what a reward could achieve.

Open value issuance changed that, as well as convincing brands that the jump to making their programme from a gifting channel to a self use channel had enormous upside. If you can issue an exact amount, instantly, through an API, the value can fit the transaction rather than the other way around.

That opens up an entirely different set of use cases. Rewards can sit inside financial products, employee benefits, loyalty programs and other experiences without the customer ever really thinking about the underlying gift card.

I think that’s why the category has become much more interesting. The technology has made the value more useful, more immediate and much easier to build into products and experiences people are already using.

DJ: As rewards move from standalone programs into everyday digital experiences, how can businesses avoid creating a patchwork of systems behind the scenes?

Preece: This is where the infrastructure really matters.

It’s very easy to add another integration, another supplier or another market when you’re solving one problem at a time. The difficulty comes later when you have to manage all of those pieces together.

Businesses shouldn’t have to build hundreds or thousands of individual integrations or relationships just to give customers access to rewards. They should be able to connect once and have the infrastructure handle the complexity underneath.

That’s the part people don’t necessarily see. Different markets, currencies, brands and delivery methods all have to work together, but the experience on the front end should still be simple.

The best infrastructure is usually the part nobody notices.

DJ: What does “scale” actually mean for rewards infrastructure today? Is it simply connecting to more brands and markets, or are there other capabilities that matter just as much?

Preece: Connecting to more brands and markets obviously matters, but that’s only part of it.

The more important question is what you can actually do with those connections. Can you issue the exact amount someone needs? Can you deliver it instantly? Can you support different currencies and markets? Can the reward sit directly inside another product or experience?

We saw this shift when open value cards became possible. A £17.62 reward is very different from handing someone a £10 or £25 card. Instead of forcing the customer into a predetermined denomination, the value can respond to the transaction.

We’re also seeing more interest in things like reloadable digital cards, where the same value can be used repeatedly without creating the same friction each time. Scale is as much about what the infrastructure enables as how many connections sit behind it, not to mention enabling a customer that lives in the United States but is holidaying in Portugal to see the rewards that are applicable to them, no matter where they are.

DJ: As rewards become increasingly global, what does it take to build technology that can support different markets while still reflecting local needs?

Preece: There’s a balance to strike between building technology that works globally and understanding that every market has its own nuances.

We’ve spent years building Tillo across 40 markets and 25 currencies, but you can’t assume that what works in one market will work exactly the same way somewhere else. Local relationships, customer expectations and the way businesses use rewards all matter.

That’s part of what makes our recent acquisition of Amilon so exciting. Amilon has spent nearly 20 years building the digital value market in Italy, with deep expertise across incentives, rewards and employee benefits. We’re bringing that together with Tillo’s technology and international footprint.

That’s what scale should look like. You get the reach of a global platform without losing the local market knowledge that makes the platform useful in the first place.

DJ: Where do you think the most interesting opportunities are over the next few years as rewards become more embedded in the products and services people already use?

Preece: I think we’re going to see a lot more value delivered without people necessarily thinking of it as a reward, But more of a value creation pot allocated to something that’s meaningful to that customer, be it:

• pension
• mortgage
• subscription services
• buying gold
• investing in stocks

The use cases are unlimited.

The technology now allows value to be delivered instantly, for an exact amount and in the context where someone actually needs it. That could be helping someone save on an everyday purchase, making an employee benefit immediately usable or giving a customer a reason to choose one business over another.

That’s where I think the category gets really interesting.

The gift card has escaped the aisle. We’re now seeing the underlying infrastructure become useful in places where nobody would have thought to put a gift card a few years ago. And I think we’re still fairly early in that shift.