(July 15, 2010) It’s social payments, person-to-person payments, and micropayments all in one. And it’s sweet too. That’s the essence of a new electronic-gift service dubbed “eGift Social” that payment processor First Data Corp. launched recently with ice cream purveyor Cold Stone Creamery as its first client.

Cold Stone, a unit of Scottsdale, Ariz.-based franchising firm Kahala Corp., is one of the early adopters of so-called e-gifting, a new payments market related to the development of for-purchase online games on social networks such as Facebook. With the new First Data service, users send electronic codes to family members and friends through Facebook or e-mail redeemable at Cold Stone for various ice cream desserts. “Social media is becoming increasingly pervasive and perpetuating a question of how to link a company’s social-media presence with real-world sales and profitability,” Cold Stone president Dan Beem said in a news release. “We saw an opportunity to engage Cold Stone’s loyal customer base and social-media following to drive a measurable impact on in-store sales.”

First Data expects to have six to 10 merchants using the e-gifting service by year’s end, most likely a mix of national merchants, according to Sarah Owen, vice president of strategic client development, mobile commerce, at the Atlanta-based processor. “The great thing about this solution is that it enables merchants to present specific items as gifts and provide consumers with a lower-price-point gift that still has a high emotional value,” she tells Digital Transactions News by e-mail. “The merchants we have talked to understand how this will expand the way consumers give gifts—from an occasion-based event to an everyday event.”

A gift sender accesses the eGift Social service through Cold Stone’s Facebook page or Web site. The giver selects a product for the recipient, types a personal note, and charges the transaction to a major-brand credit or debit card at checkout. Senders pay a flat 75-cent transaction fee, even if the transaction involves gifts to multiple recipients. First Data’s Global Gateway, which processes alternative payments such as PayPal and Google Checkout, handles the transaction. The service currently is available through First Data’s merchant alliances with Bank of America Corp. and Citigroup Inc., but Owen expects First Data’s other partners to begin offering it.

The recipient receives notice of the gift on his or her Facebook page or via e-mail. The person can then can print out an accompanying account code or present it on a smart phone at a Cold Stone location for the cashier to type into the point-of-sale system. A First Data spokesperson says the company hopes to facilitate redemptions by Short Message Service, the technology behind text messaging, some time in the future.

Inside Facebook, an online publication that tracks the Facebook software-application platform and social gaming, has estimated that consumers spent $10 million on virtual goods through applications running on Facebook’s platform in 2009, according to First Data. The eGift Social technology, moves the purchase of virtual gifts into the physical world, the company says. “It both strengthens our relationships with our existing clients and it has been a great door opener to talk with new clients,” Owen says. “The solution really enables us to broaden our discussion with clients and take it from transaction processing to a real consultative dialogue on how new technologies such as social media and mobile commerce can help drive additional revenue into their businesses.”

First Data, which says it developed the eGift Social technology itself, is one of the early entrants into the social-payments field. The young market includes virtual-currency startups and specialists such as Zeevex. Zeevex, which is now owned by prepaid card services provider InComm Holdings Inc., provides the Zeevex Xtreme online gift card sold in 31,000 U.S. stores.

Beth Robertson, director of payments research at Javelin Strategy & Research, says First Data’s new offering with Cold Stone combines person-to-person, micropayments, and social-network payments all in one service. “All of that will enhance consumers’ familiarity with transacting in that environment,” she says. “As people become more familiar with little things like this, they become more comfortable with higher value and a broader range of transactions in the environment of P2P, social networks, and micropayments.”