Giftly Wants You To Stop Using Closed-Loop Cards

Roughly 60 percent of the $100 billion spent annually on gift cards is loaded onto closed-loop products, according to Dan Kimerling.

Kimerling is chief operating officer at Giftly, a two-year-old startup that wants to replace those closed-loop cards by moving gifting to the existing payment cards consumers already use.

With Giftly, the gift giver sends funds to the recipient via email, and chooses up to three venues where those funds can be spent.

Then the recipient chooses which card to receive that credit with, adding gift card features to the credit or debit card already in their pocket.

The company has raised $2.8 million to date, but while its investor partners have no doubt helped Giftly grow, it’s its deep partnerships with the big four payment networks that have really enabled Giftly’s open-loop solution. While many payment startups are working to build networks that circumvent the Visas and MasterCards of the world, Kimerling says it makes much more sense for Giftly to benefit from the networks’ existing infrastructure to grow the company.