A downtown gift card program from international fintech company Miconex is expanding across Canada.
The Perth, Scotland-based company, in partnership with EML Payments Limited, has launched the new program after successful existing gift card systems for Prince Edward Island and Peterborough, which were launched late last year.
New ‘Downtown Dollars’ systems are being launched in Downtown Sudbury and Downtown London.
Andy Monaghan, CEO of Miconex North America, said downtowns are looking for new ways to stimulate the economy.
“In any Canadian province, there are multiple organizations focused on the success of businesses, from DBIAs and local Chambers of Commerce to local government. As well as stimulating the economy, these organizations naturally feel they have a role to play in bringing consumers back. A gift card system is a tangible way that they can support small, local businesses. It also means they can be ready for the holiday period when demand for gift cards will rocket.
“In Canada, the average spend on gift cards is $465 per year, per person. There are millions, even tens of million dollars being spent in each community. This significant amount of money goes to the big national and international chains and internet retailers. Introducing a program means provinces like Ontario and Prince Edward Island can harness that spend, and take their fair share of the gift card market.
“But if places can move a step beyond this, and see their program not as a gift card but a local currency, it paves the way for innovative tourism initiatives like we’ve seen on Prince Edward Island and disbursement of funds to local residents. There is an opportunity to be hugely creative. Our job at Miconex is helping provinces to figure out the challenges they’re facing right now and a plan for success that benefits the whole community.”
Miconex was founded in 2010 and works with towns and cities across the world, helping to support successful local economies. Monaghan said the goal of the company is to help downtowns in the UK and North America with economic development in attracting spend to the local businesses.
It developed the UK’s first city-wide gift card program in Perth, Scotland, through its Town and City Gift Cards initiative in 2015. This program is designed to lock in money locally for participating businesses, drive foot traffic and stimulate economic activity, in effect creating a local currency through the Visa network. In 2018, Miconex launched Mi Rewards, a loyalty program that automatically rewards consumers for spending money at registered businesses in a specific local economy, encouraging consumers to spend more in their town or city.
“The idea behind the gift card program is giving local organizations such as BIA’s, downtowns, Chambers, local authorities, local government, a way to attract and keep spend in the downtown or the local area as opposed to letting it disappear off to bigger organizations, national chains, things like that,” said Monaghan. “A key component of the program is what’s called closed loop in that the organization that is in charge gets to control where the card can be redeemed.”
For example, Canada’s Food Island Gift Card was introduced by the government of Prince Edward Island in September 2020 to stimulate the economy and lock in spend on Prince Edward Island. The initiative was supported by the P.E.I government, with gift cards sold at a 20 per cent discount. Over $3.7 million has now been loaded onto Canada’s Food Island Gift Cards.
The province recently announced a new staycation incentive, with a $100 gift card given with each consecutive two-night stay at participating P.E.I accommodation, as part of a $66 million support package for the island’s tourism industry.
The Downtown Peterborough program began in December of last year.
“I think any organization that has that local focus where they have in some way a desire to help their local area . . . this is a great tool for them to keep that spend local to help the downtowns, to help the local areas, right now. Essentially, without being overly dramatic, many of these local areas are under threat right now. They’re really struggling. Large national chains and large international retailers, online or brick and mortar, have done actually reasonably well in the last year, year and a half, judging by the results, these smaller locations, these smaller businesses have really suffered,” said Monaghan.
“So for those who are looking to really make a difference with the local businesses, the small businesses, this is a natural fit and what we’re seeing right now given the time of year leading up to Christmas we have organizations pretty much approaching us every day of every week right now seeing if there’s a way for this program to work for them.”
Kent Thompson, Director of Finance and Food Tourism for Food Island Partnership said the Canada’s Food Island Gift Card project has vastly exceeded their expectations.
“We have 160,000 residents on Prince Edward Island as Canada’s smallest province and had projected that the entire project would raise $100,000 for our local economy. Our initial release of 5,000 gift cards sold out in 4.5 days, so we quickly surpassed that goal. 80 merchants had signed up to receive the Canada’s Food Island Gift Card as payment within a week of the project being announced. We now have over 300 merchants.”
In September, Miconex said Downtown London will replace its Downtown Dollars program with a gift card. The new gift cards can be loaded with any dollar amount and spent in person at around 60 participating businesses including restaurants, grab and go eateries, entertainment venues, live music, sporting facilities and retail stores, or online on Downtown London’s Online Marketplace.
Kyle Marcus, the managing director at Downtown Sudbury BIA and owner of cocktail bar The Alibi Room said it’s vital for communities to unite following the pandemic.
“Sudbury has been on a journey of change for some time, from small mining town to urban multicultural city. The pandemic has further changed our community offering new opportunities for growth as we’re experiencing an influx of people wanting to relocate to Sudbury for its mix of urban centre and outdoor recreation. As a small business owner, I can say from first-hand experience how hard it has been for businesses. Community unity is vital for Sudbury’s recovery, the Downtown Dollars Gift Card allows us to support merchants by giving them another revenue stream, and capitalize on the emigration from nearby cities. We’re positioning Sudbury for the future,” he said.
Sent to my Downtown Association, good idea