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The Front Page of Global Fintech

The the largest fintech community in the world. Subscribe to our newsletter to stay up to date on the latest in news opinions, and all things financial technology.

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🎧 Podcast: Hey Fintech Friends ft Karta Gift Gards

"We're in the business of gifting, do it on your terms your way, the way you want to receive it the way you would want to actually have that experience." - Claire

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‎Hey Fintech Friends!: Hey Fintech Friends ft Karta Digital Gift Cards on Apple Podcasts
‎Show Hey Fintech Friends!, Ep Hey Fintech Friends ft Karta Digital Gift Cards - 18 Jul 2023


Helen 0:00
Hey fintech friends

Helen 0:19
Welcome to this great episode. Make sure to tell your mom tell your grandmother. Tell your sister tell your mates tell your friends tell your dog about this podcast because we're not just a FinTech podcast.

I like to think that we have a bit of fun on this. The structure of this podcast is as always, we're gonna go through the FinTech, news of the week, which is a fintechy Word of the Week, then we're gonna go through the news, the FinTech news of the week, then I'm going to have a chat with this week's friends all the way from Australia.

It's Karta. The whole company is all about gifts, who doesn't love receiving gifts, giving gifts? I do love both of those things. Then we're gonna go through the signals of the week, which is like a snippet from our premium subscription. And last but not least, the events.

Fintechionary: IPO

Acoording to investopedia, refers to the process of offering shares of a private corporation to the public in a new stock issuance for the first time. An IPO allows a company to raise equity capital from public investors.

The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors. Meanwhile, it also allows public investors to participate in the offering.


Interview with Claire and David

Helen 4:11
Claire and David are the cofounders of Karta gift cards. Claire has 15 plus years of global experience at Amex paired with David's gift card experience cards his gift card launched in the Australian market 2022 And is now in preparation to scale globally via the UK and US hope you enjoy this episode.

Hi guys, it's a pleasure to talk to you. I know you're based in Australia, but you're here in London. What are you guys up to in London?

David 4:41
That's a good question. So we're lucky enough to be here representing the Australian government looking to help businesses bridge into different countries. They've supported us in America. That's actually where we met Visa the first time. And now we're over here in London and heading over to Amsterdam next week. Like for money 2020

Helen 5:01
Amazing. You're on like a European world tour. And I've never been to money 2020. But I do hear it's like the Coachella of fintech.

Claire 5:11
Okay, excellent.

Helen 5:15
So I'd like to kind of take a step back, actually, and kind of find out a little bit about you both. So maybe introduce yourselves, introduce Karta. And honestly, like, if you were to explain Karta, to someone who doesn't work in FinTech, like your mom, or your best friend or whatever, like how would you explain Karta's mission and what you guys are doing?

Claire 5:41
Simply our mission is just to enable any business to issue and run their own gift card programme.

Helen 5:49
I think you have a mission or business that everyone can kind of get behind. Everyone likes getting gifts. Everyone likes receiving gifts, for the most part, I think. So. So maybe like, in a lot of ways, it's something that is easy to understand, easy for people to like, get behind. So what what was kind of the reason why you guys thought to kind of start this business, or why this particular mission?

David 6:19
Yeah, so it's a very good question. You're 100%, right, like gift cards, everyone knows what it is, the thing that we're solving is the pain point of one that the experience is in great, everyone's got a gift card in the past, and they've lost it, it's expired, they haven't been able to use it.

And then at the same time, it's very hard to get a gift card for your favourite restaurant, or cafe, because you're really limited in choice. Even though it's a trillion dollar industry, you've got less than 3% of retailers that actually make it up and what we've created as a platform that enables any business under the sun, to be able to issue a gift card, but then from the consumers perspective, it can go straight into their phone, it could be a link that you send someone, it could be part of our patented technology where you could just tap a physical card against your phone. And it instantly goes into it. But we just want giftcards to be as easy to use as any visa card that someone has. And if we do that we think we can win.

Claire 7:14
And to add to that, Dave did reference globally; it's a trillion-dollar opportunity. It's forecast at almost doubling size in the next five years. So what we want to do is actually go to new segments and verticals to actually unlock the power of gift cards that many businesses have been shut out from before because the barriers to entry are just too high. So most of the top sort of high street retailers offer gift cards because they have the means, resources, and money to do so. But if you look at like the local coffee shop down the road, or even a nice local high-end restaurant, they don't have those means and resources to actually have their own branded gift card to actually drive new loyalty to either new customers or to existing return customers. And that's what we want to do. We want to open this up to any businesses to help them grow their business as well.

David 8:17
Just to show you an example, this is a little cake shop in Australia. This is a card that goes straight into Apple Pay and Google Pay, locked down to their tool, so no one else can use it.

And I think to illustrate the point here. We don't require the merchant to do anything, there's no integration, we can onboard them. So it's completely frictionless from their perspective as well.

Helen 8:37
That's really interesting. And I feel like it's really interesting because we have gift cards; when I think about even myself, who I received gift cards from, it's probably older people who give me gift cards. And then when I get gift cards, to be honest, it's when I can't find the receipt for something. And then I asked them, can I get a gift card instead?

Because I don't want anything in the shop and I don't want to exchange anything. But I think there is definitely this space of, I guess, the need for a gift card. But like, like you said, when it's not that easy when it's not accessible, you're just like, Okay, I'm not, I'm not gonna get it.

Or you know, you can only get, you know, a gift card from a High Street store, like you said. So I say that to say, like, do you feel like you've unlocked a different demographic or a different audience of like this new generation of people who are interested in gift cards, like based on this idea of it being easy, because I know for me as a 27-year-old, the easier it is, the more likely I am to tap, like, especially the UK, we're all about tapping. That's all we do. We don't really use quite a cashless society here. So yeah, I'm just wondering about that point.

Claire 9:44
Definitely. I mean, that's what we're looking to drive that adoption with younger people that are in a much more relevant way on their terms. So, you know, when we set out this business, one of the concepts that really resonated with us internally was this whole show me that you know me, so even if you are We're in the business of gifting, do it on your terms your way, the way you want to receive it the way you would want to actually have that experience. And then the breadth of in terms of actually opening this up to any, you know, High Street store, or even other business units as well, like legal services, accountants, like everyday sort of services that you may use. It's just like making it as commonplace as possible but in a new way. So it's just, it's just bringing it into the 21st century.

Helen 10:31
know that makes a lot of sense. Like, the easier it is, the more likely people are to use it. And even as well, I think about, like, the gift cards that I have, they start to feel annoying because I'm like, they're physical. And after a while, I'm like, if I don't actively have this, then I go past the store. And I'm like, I don't just carry around this gift card. So it does become this, like during processing. And so then I don't get a gift card because I don't want to keep it in my wallet. And I don't necessarily just want to have it at home, and then then the gift cards expire. And then then, I'm annoyed.

So I definitely can see how that is. You're literally solving that whole issue because, like, I'm literally looking at a gift card I have up there, which I've been needing to spend because I don't want it to go and be expired. Yeah, there's a lot here around like gift cards and gift giving and stuff, I guess, you know, if I was to say like, you know, in looking at a magic ball of like, 10, five to 10 years, like, what does? What does? Where will Karta be? Because I know you've been working with VSA, and it'd be good to kind of know about that. And then you're expanding quite heavily in different countries; like, what does the big plan look like for Karta?

David 11:39
It's a good question. So the way we attack the market is threefold. So what we did in Australia is we launched, and we partnered with the shopping centres because the equivalent of assignments in America, they do a lot of gift card sales. So we were able to give them a digital-friendly solution, which they haven't been able to attain before just from a cost basis. But giving the user the benefit of a very good UX, like you talked about. So that was stage one, to get the product to market. Then step two, we're in the process of working with the Commonwealth Bank of Australia, who are strategic investors in us, to enable gift cards for their consumer base; they've got the biggest retail and business distribution in the country. So that's a very great base for us to be able to grow off.

And then step three is taking the patented technology into the largest retailers and partnering with them. So you could purchase one of their cards. And as you said, rather than leaving it up on your shelf and forgetting about it, purchase it or receive it as a gift; tap it against your phone, and it's instantly in your phone as a digital card that you can just tap that that's the way we go to market. So we've done that in Australia, where we're in the process of enabling the UK right now in the US. So we can try and replicate that as best as we can. Yeah, that's

Helen 12:53
awesome. And then I guess after Australia, the US, you've got the whole of you. You've got Asia, which is close to Australia. There are so many; I mean, as I said, it's something that we can all get behind. It's a universal sort of issue, issue and solution. I was wondering, have you seen like a, I don't know, if you saw on the email, like FinTech stat or fat that you think it's quite interesting, within this space, or just in general,

Claire 13:19
definitely. So we know that retailers, as much as consumers, love gift cards. So it's a big opportunity. But some fun facts that we have researched and seen statistics around is that if you are given a gift card, you're more likely to actually spend a lot more than what's actually the stored value on the gift card. So the perception, a lot of the time upon receiving that, is its free cash.

So if I were to receive or give you a 100-pound gift card, nine times out of 10, you go in and spend more than that 100 pounds because you're like, it's free money in a gift that I can get my format. So it's great for the retailers as much as it is for the consumers in that sense. And the other stat that's really stood out is that four out of 10 consumers when they receive a gift card at a new merchant, 're considered a new customer. So imagine if you know that restaurant that we talked about down the high street, where to actually bring in new customers because that word-of-mouth referral piece works really well in the form of a gift card. It's like, hey, we know you love coffee. Here's a coffee card that you can go and use wherever you'd like, anywhere in London. That's quite a compelling gift. And it allows the cafes in a way to actually see an opportunity to attract new customers into their stores.

David 14:36
I think another thing just to add to that, which is so unique to the gift card space and contrary to everything else under the sun and fintech, physical state sales still lead the way by a long way. They make up about 70% of gift card sales. Digital is definitely growing at a faster rate. But physical has so much more volume. It's not funny, and that's still a growing industry. It's not actually in decline. So it's quite interesting. Good to see that.

Claire 15:00
But one thing that is also standing out for incumbent retailers that, you know, have good cards as part of their bread-and-butter proposition is that they move away from plastics. So another really interesting statistic is that through our technology, you can use paper instead of plastics for the actual physical gift card itself. Now, that's got a great environmental sort of, you know, opportunity for a lot of businesses as well. So there's a real adoption of change coming through the industry, which is very time.

Helen 15:30
Yeah, I mean that there's a really, really interesting fact on this. I mean, do you feel that, like, when it comes to gift cards, then the focus is on the kind of brick and mortar like the physical stores, that's where things still are? Or do you feel like it is there is still this, like, there's a closer push towards, like, online,

Claire 15:49
it's a convergence of both; you need both; you can't have one or the other. For it to actually scale, the way that it's predicting to, I think where we come in, though, is driving a change in the actual behaviour. So still having the opportunity to have to choose between either a physical bricks-and-mortar type experience or a mobile-first digital native experience. But where we stand out that makes us quite unique to a lot of the incumbents is we offer the option to switch between those methods in a way, you could actually start in-store and then end up using your phone, or vice versa; you could actually, you know, use it in store as well. So that's our sort of USP.

Helen 16:30
Yeah, I feel like that definitely makes it so much easier because I feel like as it stands, and it's so interesting, actually, because, you know, as you've talked about it this, this, like you said, the culture of like gift cards I've not, I've not actually like thought about the process behind it. And the fact that, for instance, if I have a gift card, I know it's something like this JD sports gift card I have, I know, I can only physically use it. But you're right. At the same time, if I go, there are likely going to spend more than what's on the gift card. Because in my head, I've kind of seen it as this, like, saving money thing, which is not saved because I obviously spent the money. I just wanted to exchange something. So there is this like thought process which has been created. And it is really interesting. I would never even ask them, like, can I use this online because I'm so used to this; the culture of gift cards is like, you go to the physical store, you see what's there. You have to use it within whatever a year or however long it is. And sometimes you go there, and it's expired. And you're just like, Oh, I forgot to use that gift card.

Claire 17:28
That's the worst experience, isn't it? You're not alone.

David 17:30
There are a lot of people that do that.

Helen 17:33
It's so annoying. And, I think there's a twofold thing because it can be like a store that you don't usually go to because, as I said, if I think about when I'm given a gift card a lot of the time, it's, I can someone who thinks I go to the store and I don't so, and it doesn't mean I wouldn't buy something from that. It just it's just, I guess, not my number-one place to go.

David 18:17
So it really comes down to the user experience. So we've taken the step that we need to give users the best experience. Because right now, if you've got a gift card different store, you don't know how to use it. Do I need to download an app? Do I scan a QR code? So having that ubiquity where you can literally tap something is critical because everyone just knows that at that point in time, any gift card that runs on Karta, all you need to do is tap it, and then you can go from there. And then it's just building the merchant adoption. So they understand, hey, that customers like this, they love it. They're actually spending more on gift cards, exactly what you said; this is free money to me; I've already got the gift card and spent more. That's where we see the opportunity to really grow the pie rather than fighting for income and market share that so much opportunity.

Helen 19:03
What do you think will be the thing that stops you working in FinTech? Or, like, when do you feel like it will be finished?

Claire 19:24
I think, look, I think the opportunity is so big, it feels like it won't be a quick win; it will be a long-term burn. Like if you think about other payment methods that are sort of very commonplace in society today. A lot of those companies are over 100 years old. So you know, you could say that we actually have ambitions to be global and a big player in this space. And competitors in this space have been around for decades, maybe not hundreds of years, but decades. So we would see something similar being here for how we actually stay relevant; it's the core question. On the flip side, I mean, you know, as a startup, you can't be in denial that it's a tough time, you know like a lot of startups fail.

We've had that experience in a former life where another startup that we worked in, that we created didn't, didn't survive. So we've got eyes wide open as well about the reality of what we face in the tough battle ahead. But I think the biggest thing that I know I take personally conviction in knowing that we're on the right path is that we've been around now for two years. And we continue to get more and more demand-driven for our product, which is wonderful. You know, we've got a great partnership with Visa underway. We've got a big national bank in Australia which would be the equivalent of, say, NatWest for Barclays or a Lloyds TSB size over here. So the fact that we've got these big companies that want to do business with us gives me at least that conviction that we're on the right path.

David 20:55
I'd be one of the emphases on the guys at Visa, like they actually had to change their bylaws to enable us to work with us the way we wanted to work. But when you've got such a big established business, but they're willing to make necessary changes to be able to create the opportunity to innovate, that it's, it's amazing.

Helen 21:13
Yeah, I mean, I think you're like, I didn't realise you guys are only around for two years; it seems like you've really, really expanded so quickly over those two years. So there's clearly a need for it. There's clearly like, there's clearly so many people taking interest and like, like you said, you've got your partnership with Visa. So it seems super successful to me. But it is really interesting what you say as well. But like kind of, you know, the, I guess the wisdom of the fall like you kind of maybe because you've done something before where it didn't work, you have a clearer idea of like what success looks like what failure looks like, which I think I find with a lot of like people who've I guess started something and failed and tried again, the scar tissue.

Helen 21:58
I want to ask you some questions from the previous guests. The last question I asked was, what's one FinTech story we haven't seen yet that we're gonna see in the next 12 months? You might say, Karta. I don't know. I'll direct that. If you've got a different one, I'll direct that.

Claire 22:17
One thing we're really excited about in the next six months, so gift cards are a highly seasonal business and industry. So roughly about 50% of all sales happen at Christmas.

One thing we're really excited about is we're going to be featured in some stores here. Like it's like a department store version, what can I liken it to? It's probably similar to Primark over here. So we're going to have our featured in stores like Primark in Australia over the Christmas period, but more importantly, the ability to convert a physical card into a mobile wallet, right there, and they're in your phone. So that's like a complete industry first.

That is a real test for us. But also for, consumers like to say, hey, it's I'm just not lifting it off the pegs like I normally wouldn't go and pay at the point of sale. I can literally purchase this with my phone and embed it into a wallet or gift it even via their mobile phone as well to someone else. So we're really excited to see that because if that actually succeeds, we are changing the way consumers can actually buy and use gift cards in the future. So that's quite disruptive in HR. So pretty excited about that.

Helen 23:23
Yeah, I'll tell you now, if there was a Primark gift card like that my mum would buy my mum would be buying that for me and my sister and my niece, like, I'm telling you now, I would already have one of those because she would have already bought it. Okay, I'll ask a different question, Dave. What's your spiciest fintech? Hot take on FinTech today.

David 23:46
Wow. Okay so I think we absolutely love what Afterpay did ClearPay over here. It was scary how fast they could roll it and their credit in no time. So yeah, that's, that's it for me.

Helen 24:11
Okay. That works. And let's keep going, Claire. Okay, this kind of goes with maybe something you were previously talking about. Like? What regrets? Or if you do have them? What regrets do you have as a founder on your journey as a founder so far?

Claire 24:28
Great question. I don't know if it's a regret, but it's something that's front of mind, which is how do you balance? You know, trying to sort of have, like, we've got an amazing team. We've got a great level of people, but it's so hard in a startup environment to always offer maybe some of the perks that sort of bigger companies can offer. So it's like, how do you always attract but also retain the talent that you want so hard? And I think we've had times where we've started a path and thought, This is the path. And then, of course, it never actually turns out that way. And we've had to pivot and adapt. And it's been hard sometimes to take everyone with us on that journey.

Because ultimately, at the end of the day, especially as the cofounders, survival is everything, like cash flow is everything. And making sure, therefore, to be in that position where you can keep growing the business on your terms, the way you know, is the best path, which requires possibly a pivot, which is what we've seen in the past. Sometimes you got to make hard decisions and let people go. And that's always hard from a humanistic perspective. It's the stuff that sticks with you. It's the stuff that you actually always go through, what could I have done better on reflection, and how to actually not repeat some of the mistakes, but mistakes are very common for founders.

Helen 25:44
Yeah, I think it's tough because like a big company can offer so many perks. And then a startup maybe can't, but it also offers a lot of flexibility. And I don't know if their stock options and stuff. So it just depends on what people like one. I mean, I've kind of I'm freelance now. And previously from that, I've always worked in like massive corporations and then making that that jump where I kind of work for people, but I kind of don't, it's really interesting now, like, seeing it on the outside, because I guess when I work, it's only if, if I'm working with people, it's like; specifically purpose driven. I don't just, like, chill; it's on my terms. But you also get to see, like, how much, I guess, time is wasted? Because people like have, like, I don't know; I don't even know what I'm saying but like, have that kind of like, have full-time jobs.

So they're the expectations from the managers, so interesting. And then the expectations from the employee, because you've got this, like, all of this surrounding and the emotional aspects behind it that I don't think I can afford to kind of have any more or not have but you know, I mean, like, it's just separate. Dave asked you one more question, what was your kind of like, oh, shit moment in your career. So you can take this in either way as, like, you're sort of like eureka moment of like, this is what I should be hearing. Or you can take it as like the time in which, like, You thought you're totally on the right track in, like, you're like, oh, shit, this is completely wrong. I made a massive mistake.

David 27:16
I think it's interesting, right? Because when you're a kid growing up, you see people in careers, sometimes they wanted to do something, and they're like, Hey, we wanted to be an astronaut, or an engineer or something along those lines, never had anything in my head whatsoever, in terms of this is what I want to do when I grow up. I probably haven't had a great Eva. It's more like opportunity to opportunity than then a career per se. But I think not answering your question entirely. When you know you've landed in the thing that you're supposed to be doing.

It's a very weird and comforting feeling because I think you've got this levelling or grounding where you're not looking or trying to seek an opportunity. For me, that was probably like 2017, the first time I fell into gift cards, and you get exposed to this billion-dollar opportunity, just on a local level, where, from a technical perspective, any card that you see has like five different intermediaries that sit behind it, just like antiquated supply chains that are absolutely ripe for disruption as Claire said, like trillion dollar industry that is growing at astonishing rates, where we're just very lucky. I think this is an industry that no one takes seriously, probably because it's so crowded right now. And the opportunity is just so right for us. It's not funny. So having that level of comfort and reinsurance knowing that, like, what we're doing is what we're meant to be doing. I think it just makes you more bullish; you go for it. And that's where it's at. But yeah, every second day, a tonne of mistakes as well.

Helen 28:50
Oh, that's that. I think that's so good. Like, it's I love to like when people know that they're, like, working on their purpose. And, like, I'm super confident and sure about it, just because, like, I think that's a really good question. I would like to kind of know if Claire's sort of ship moment, too, or if it's the same as Dave in 2017.

Claire 29:10
So Dave's much more sort of entrepreneurial and has been looking at this I'm much more from a corporate perspective. So, I call it; I'm a recovering corporateholic. It's a very different and just essentially, I think my oh shit moment is where this has felt really opportunities like this where you get to travel the world and into new markets and expand your network. And last night, we were pitching to VCs, you know, like, those are the little moments that you just go, this is so different to what my past was in my history and what I've always had comfort in knowing. So I feel like I'm really travelling a path that's a lot less common, a lot more risk in terms of that perspective as well. But ultimately, so fulfilling, so I Don't think I have those oh shit moments where it's like slamming me in the face per se. It's little micro-moments where I go, Oh, wow, if I pinch myself, this is amazing, this experience that we're undertaking, and the ability to drive this shift internally and inside of myself as well as externally in the industry. There's a lot of personal growth that comes with it as well.

Helen 30:20
Oh, that sounds amazing. And I do hope you're enjoying your time in London. Okay, I want to move on just to our last bit now, but I just want to ask you a couple of questions has nothing to do with fintech. It's just quickfire. Ready, Dave? Would you rather have a one-minute conversation with your past self or your future self future?

Claire, if you could reincarnate yourself, would you rather come back as a human or an animal?

Claire 30:47
Definitely human

Helen 30:50
Would you rather spend the day wearing wet socks or spend the day with popcorn kernels stuck in your teeth?

David 30:56
Both are terrible options. Wet socks?

Helen 31:00
Claire, would you rather never leave the country or never come back? Let's say Australia because I feel like that makes sense. Why would you want to stay here?

Claire 31:10
That's a tough one. It's really tough right now. Because I've got children, I'd have to say never leave the country, but that would break my heart.

Helen 31:18
Dave, would you rather know what your pets think of you or never hear them speak?

David 31:37
My birds always speak to me, so I know exactly what they're thinking. Then already?

Helen 32:11
Would you rather eat a whole jar of mayonnaise or a whole tub of butter?

David 32:23
I don't eat any of them.

Claire 32:28
You have to choose one.

David 32:33
Yeah. Mayonnaise. I guess the

Claire 32:38
the question is very interesting.

Helen 32:58
Amazing. Well, thank you guys so much. I got I've got one more question. What do you think I should ask the next friend or friends of the show?

David 33:10
What's the worst gift card experience I've ever got?

Helen 33:12
That's a good one. And I'll be like, What have you heard of Karta?

Give these guys a call. They can change your life. Amazing. Thank you guys so much. Thank you, Claire. Thank you, Dave. This has been great. Nice start to the day. Thank you for coming on. Hey FinTech friends. Yeah,
Claire 33:31
thank you.


Signals is our subscriber only reads and I'm going to read you a snippet from one of our latest articles. To read the rest of the article, please subscribe to us.

Last week we covered what the Federal Reserve, OCC, and FDIC's latest guidance on third-party relationship management means for US banks. The guidance has also been highly-anticipated by fintechs, who will need to step up to meet updated requirements across all of their bank partners.

Here we dive into how fintechs should position themselves in response, with insights from leaders on what the guidance means specifically for fintechs in areas like open banking, lending, and Banking-as-a-Service. It's also worth calling out which issues are not addressed by the new guidance, and where to look for answers on some of the biggest questions on fintech regulation that are still left open.

Finally, we'll summarize the takeaways for banks and their fintech partners going forward.

Okay, so for events