PayPal is testing a new partnership with Wrapp, a social gifting service as a way to gain new users in Sweden. As we’ve reported in the past, Wrapp lets friends give, receive and redeem digital gift cards using mobile devices, and allows friends to contribute to gifts given by mutual friends.
With Wrapp, you sign in via your Facebook account, and you can then tap the Celebration tab on the app, browse your friends or major events, and select the person you want to send a gift card to. All available gift card offers for that friend are automatically listed. For merchants and in-store retailers the service allows them to target specific users by demographics. Wrapp is now being used by over 180 national and multi-national merchants in eight countries.
During December and January, PayPal is kicking in SEK 49 ($7.35) on top of every free gift card available on Wrapp when Swedish consumers use the mobile payments service instead of a credit card to add a minimum of SEK 1 ($0.15) to a promotional present before sending it to one of their friends. That means a free SEK 100 ($15.00) gift card from Swedish men’s and women’s clothing store Rizzo, for example, becomes worth SEK 149 ($22.50) when PayPal is used to top up an individual or group gift.
As the gifting company explained to me, Wrapp is primarily used by big brands to get the consumers that they want -based on age, gender and location into and shopping in their offline stores. The startup has partnered with a number of brick and mortar stores across the world including H&M, Gap, and others.
Wrapp has also been used to get people to try new products. For example, McDonald’s used Wrapp to build awareness and trial of its new McWrap in Sweden. PayPal is the first service to use Wrapp to get mobile shoppers to try to use its payments service to gain to users. In Sweden, 5 percent of the total population are using Wrapp, so the service actually has a considerable number of users.
Wrapp says the PayPal campaign will be rolled out more broadly based on its success. PayPal has been testing a number of ways to allow consumers to use mobile payments around the world, including QR codes in windows in Amsterdam, and mobile check-ins in Australia.
There’s also Facebook gifts, which offers a competitive gifting application.
Wrapp and PayPal’s partnership is interesting considering that gifting company could be used as a layer on top of a mobile payments or digital payments service. As founder Hjalmar Winbladh says, “We know that Wrapp and digital wallets have great synergy. There are definitely many strategic applications for our technology that can be developed with partners like PayPal.”
In the past year, consumers have used Wrapp to give their friends and family over 5 million digital gift cards.