The application, which will roll out this fall, lets consumers search for and purchase mobile gift cards from participating merchants such as American Apparel. Discover will provide the core processing services for payment transactions when gift cards are redeemed.

“Discover Financial Services will serve as the ‘rails’ that Firethorn runs all its transaction through,” said Ben Ackerman, vice president of business development at Firethorn, Atlanta.

“This is key, as we offer flexibility as well as innovative loyalty and usage programs that will provide merchants, like American Apparel, with the opportunity to promote their brand to millions of consumers like never before, straight from the convenience of a mobile device,” he said.

Chicago-based Discover Financial is a direct banking and payment services company, whose products include the Discover Card.

American Apparel has already signed-on to sell mobile gift cards through Swagg (see story).

Firethorn is also working with other merchants, although it is not disclosing their names at this time.

Swagg application
The application lets consumers purchase, personalize and exchange gift cards from their mobile devices, and provides members with targeted advertising based on their Swagg history.

Gift card payment transactions will be handled by Discover.

“Swagg is a direct-to-consumer product that provides retailers with the opportunity to interact with their current customers and acquire new customers,” Mr. Ackerman said. “Swagg will provide merchants access to a highly engaged consumer segment, delivering unique capabilities not available from other channels.

“[Swagg] will allow us to drive incremental customers and revenue for our merchant partners,” he said.

Mobile users who have downloaded the Swagg application purchase gift cards from participating retailers.

Consumers who have received gift cards can redeem them through the application, as well.

“Merchants are working with Firethorn and Swagg because of the value that we will deliver them by providing a highly engaged consumer segment as well as delivering unique capabilities, and creating loyalty to those brands,” Mr. Ackerman said.

Trending towards mobile gifting
Mobile gift and loyalty cards are gaining steam as retailers start to view them as an effective way of engaging consumers.
For example, outdoor retailer Bass Pro Shops has distributed mobile gift cards via Facebook (see story).

Firethorn’s teaming with Discover is not the first such partnership to affect the mobile gift card sector.

Smart Transaction Systems brought on Hypercom last year to increase the reach of its own mobile gift and loyalty card programs (see story).

However, Swagg will be a game-changer, per Mr. Ackerman.

“We believe that SWAGG will change the way consumer transact with their favorite brands,” Mr. Ackerman said. “Gift cards are impersonal, physical plastic with significant limitations on personalized gifting, consumer choice and flexibility of use. 

“SWAGG will change all that, and make them convenient and fun,” he said. “It empowers consumer choice and provides significant flexibility and convenience of use.”