• by Judy Warner , December 14, 2006

Perhaps more novel than a gift check, now any business can create a co-branded credit card to be given as a holiday gift or incentive under a new program launched by MasterCard Worldwide.

Business owners or managers can log on to the mastercardgiftcard.com Web site and personalize prepaid gift cards in denominations ranging from $10 to $500 with their company's logo and a personal message such as "congratulations," "happy holidays" or "thank you" to the recipient.

The Purchase, N.Y. credit card issuer launched the co-branded prepaid gift card program in conjunction with KeyBank, and is now analyzing how to advise other bank customers on how to market the product. Citing the growing popularity of prepaid cards as gifts, Bruno Perreault, group head of global small business and mid-sized enterprises at MasterCard Worldwide, said the opportunity to co-brand with the credit card issuer is a draw to some businesses. "We've even had some very large companies find us through a search engine and buy hundreds of cards," he said.

A banner ad on the business section front is running on consecutive Wednesdays in The New York Times and on popular search engines. In general, direct mail seems to pull better than some print, Perreault said, because customers then have handy access to the email address.

"What we anticipate is that once we learn how to reach the market, banks will become more active. We decided to launch early in the fourth quarter for this holiday season but our channel doesn't work on that short of a timeframe, so we thought, 'Let's go and learn about the marketing of this' and then banks will become interested for next year," he said.

MasterCard believes prepaid gift cards compete with cash and checks, rather than credit cards. Research conducted by MasterCard showed that 75% of small-business owners surveyed said they would be interested in putting their company logo on a card. Moreover, 79% of gift card recipients said they would prefer to use a MasterCard gift card over a retailer-branded gift card.

Perks for customers who charge the purchase of gift cards to their MasterCard pay a $99 set-up fee rather than $500, and the 3% load fee is waived on the first $10,000 purchased.

The prepaid gift card is the newest product from MasterCard aimed specifically at businesses. Earlier this year, MasterCard introduced its World for Business cards, targeted to larger businesses that travel more and have higher charge volume. MasterCard also introduced its first industry-specific charge card for the construction and building contractor industry. The MasterCard Construction Card addresses financial issues specific to that industry. "Contractors tend to buy a lot of money to do their job and they don't get paid right away. There's a cash flow gap that can be significant. This card gives them a little bit more time to pay and allows them to better track [expenses] on a job and allocate costs."

Other industry specific cards are in development, Perreault said.