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Leaders In Payments
Leaders In Payments
Gift Cards As Payment Rails with Alex Preece, CEO & Co-Founder of Tillo | Episode 485
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Gift cards have a branding problem and it’s costing the payments world a big idea. Alex Preece, CEO and Co-Founder of Tillo, joins us to make the case that gift cards aren’t really “gifts” at all. They’re programmable stored value, a modern redemption rail that can sit inside bank apps, fintech wallets, cashback programs, employee rewards, refunds, and payouts. Once you see them as a payment instrument, the market looks a lot less like novelty and a lot more like infrastructure.
We dig into how Tillo built a two-sided marketplace that connects thousands of retail brands with the businesses that want to reward customers and employees. Alex explains why a single API matters in a fragmented global ecosystem, what it takes to support multi-country catalogs, and how better tooling and transparency can make brands more confident partners. We also talk about a surprising insight: most volume is self-use, not gifting, because people are optimizing everyday spending by converting earned value into higher-impact rewards.
We zoom out to the bigger payments trends reshaping rewards and loyalty: the demand for real-time gratification, the opportunity created by open banking and faster payments like RTP and FedNow, and the emerging push toward “global but local” benefits that actually work when customers travel or live abroad. If you’re building in payments, loyalty, or fintech growth, this is a practical look at where rewards infrastructure is heading and why it can change behavior at the moment of decision.
Show Welcome And Setup
SPEAKER_00Welcome to the Leaders in Payments Podcast, where we talk to sea level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
SPEAKER_01Hello, everyone, and welcome to the Leaders in Payments Podcast. I'm your host, Craig Myers, and today's special guest is Alex Priest, the CEO and co-founder of Tillow. So, Alex, thank you so much for being here and welcome to the show.
SPEAKER_02Great, thank you for having me. Looking forward to sharing some more information and getting into the details. I appreciate the time.
Army Roots And Moving To Texas
SPEAKER_01Absolutely. So before we dive into your career and more about the company, can you give us a quick snapshot of your personal background, maybe where you grew up, where you call home today, a few things like that?
SPEAKER_02Sure. So three kids, Ed, Izzy, and Marnie. Um, funny enough, we've gone for a bit of a journey actually together as a family, which has definitely made us stronger. We've recently emigrated from the UK. Brighton and Hove is where we spent, well, I've spent with my wife, Laura, for the best part of 18 years to Austin, Texas. So we're living in the great state of Texas at the moment and intend to be here for the foreseeable future. But grew up in a place called Weymouth in Dorset on the south coast of England. It's a little seaside town. I was there until I was about 16. Then, sort of opportunities there are pretty much within the holiday industry and hospitality. I didn't really want to get into that. My dad was into that sort of business line of business. I wanted to join the military like my grandfather. My brother followed me in my footsteps. I follow my grandfather's footsteps. So spent just over six years in the British Army, served on active duty in Bosnia, in Iraq, which I was extremely thankful for the opportunity to do that. And then a couple of years ago, I saw an opportunity that I didn't think would, especially with the kids' ages being where they were, 12, nearly 10, and 4 now. So they're a bit older now. But we I sort of just really wanted the opportunity to not look back on myself if I lived to the grand older ripe age of 18 beyond, and not have taken the opportunity to live in another country. Although I've traveled quite a bit, I felt as if it took my wife a bit of convincing, but uh we've never looked back, actually. We really wanted to take the opportunity to kickstart the business. Although we've been trading in America for quite a while, I really wanted to take the bull by the horns, so to speak, and and start completely fresh in this amazing country.
SPEAKER_01All right. Well, first, welcome to Texas. So I'm in the Dallas area, so we're kind of neighbors. And then I love Take the Bull by the Horns, another great Texas reference, maybe. Uh so I think you're you're starting to live the Texas dream. So if you don't mind, can you walk us through maybe your professional journey and then why you started
From Startup Exit To Tillo
SPEAKER_01the company?
SPEAKER_02Yeah, so I have had a previous exit before, been very fortunate and lucky to bootstrap the company, which we ended up, my business partner and I sold to money supermarket.com plc, which is uh the world's largest comparison website. And we were helping consumers save money on great deals all over the UK, a bit like Groupon, but it was a UK version. And what we realized with that business, and this was sort of before I, you know, phones became a prolific way of issuing digital value, it was you could see that the journey of digital was lagging quite behind in the UK. And it led us to sort of really thinking about how digital value is issued at that current moment in time, and it was very fragmented. We realized that consumers were, especially over the recession, they were looking for new ways and opportunities to save money. And we realized when we stumbled across this enormous industry of rewards, incentives, and benefits, specifically with gift cards and how value is caught up in all these different fragmented areas. And ultimately, we naively stepped into the space to help consumers that have gift cards that they don't want and reselling them and having a really secure infrastructure to enable them to do that. Now, that market actually is not as big as what we thought. And we had we came up against a bit of um friction when we were talking to the brands that we represented or wanted to represent around those secondary markets. But what happened was this hotbed of opportunity and this conversion of payments and enabling these huge buyers of reward incentives and cashback companies, credit card companies, enterprise businesses wanting to use gift as a way to give back to the consumer and to often turn profit uh cost centers into profit centers. We found that the issuance of digital could be simplified a lot more through single APIs, through to the brands that people love. So we started and embarked on a bit of a journey. We bootstrapped it for a bit. We were very early into enabling these huge companies that were issuing gift cards in fixed denominated values and in a very fragmented manner. And actually, the catalogue of brands that were that were in the ecosystem were few and far between. It was the usual 25 brands that you sort of expect. It wasn't very deep in breadth. Anyway, we started our sort of research at the back end of 2015. We started the company actually 10 years ago, 2016, in March, and we very quickly got traction. We raised a tiny bit of money, about a million pounds, back in, like I said, 2016, the end of 2016, and we got profitable very quickly. And we found that there was this real demand for using gift as a way to reward and incentivize and have that personalized approach to issuing value to consumers all over the world. And it sort of grew from there. And now, you know, now we're in nearly 40 different countries issuing. I think this year we'll do north of three, three and a half billion dollars through the network. We've got thousands of brands on one side of the ecosystem, and you've got lots of buyers on the other side of the ecosystem. And we're a team of, I think the group will have just over 300 people, 320 people or something, the end of the day all over the world, which is strange to even say that out loud, to be honest.
SPEAKER_01Okay. Well,
A Single API For Rewards
SPEAKER_01tell us more about what the company does, target customers, value props, you know, those kind of things. And you already mentioned a little bit about obviously being global, but if you don't mind, maybe dig a little deeper into what the company does.
SPEAKER_02Sure, yeah. So we just make it super simple for businesses to connect to the brands that people love using gift cards for a way to reward and incentivize their customers or employees. So, like Stripe have made it super easy for businesses all over the world to take payment in a whole array of different ways of doing that. We're the same in rewards and incentives. So we're an infrastructure play and we help brands, gift card programs, these amazing brands that we love shopping in every every day of the week. We enable those brands to connect to businesses that want to use their gift card programs to reward and incentivize their consumers or employees. So think go shopping, you get cash back on your credit card, you can move that cash back onto a gift card with a bonus on there. So there's more value that has been issued to those consumers, which is really nice. We represent brands as well. So brands that don't have that sort of team or ability to have those initiatives to be able to drive their go and gift card program. We can manage that entire stack and service for them, including processing. So we've got like a set of, if you will, exclusive brands that Tillo has in its wheelhouse that we help manage, look after, uh control, and ensure that there's transparency and the right controls there for them to be able to work with the businesses within those ecosystems that we sit in in rewards and incentives. And then buyers or businesses, if you will, partners as we call them, they are anything from fintechs, huge payment companies, financial technology companies, Fortune 500 businesses that through to startups that want to use gift as a mechanic to talk to the consumer in a much more personalized way rather than just giving cash back or a payment back, you know, refunds, disbursements, class action payouts. Anywhere that where there's a monetary value that is being exchanged, we help bring a more personalized, I think, dynamic way of moving that money so the consumer gets more and the business actually, with the margins that are involved in this, it often turns, like I said a minute ago, it turns a quite often a cost center into a profit center because on average there's about 800 basis points of value that can be shared with the consumer and the business that's sharing that payout. So yeah, we seem to have found a bit of a rich vein of opportunity when it comes to enabling businesses with consumers that are traveling all over the world, employees that are now based all over the world, get value, talking to them in a much more personalized way using gift. That's a lot more fragmented than it seems. You think, well, why can't we just send a carry floor gift card in Spain to someone? Well, that's a bit more complicated than it seems. Even just sending money abroad is just a bit difficult. But consumers are traveling everywhere, employees are now based everywhere, and we just want to make it easy for these businesses to talk the language of the consumer wherever they are, wherever their families are, so that that value that's being issued can be really appreciated.
Loyalty Pain Points And Differentiation
SPEAKER_01Okay, well, what's the biggest challenge that your company is solving for your customers right now?
SPEAKER_02So talking to their consumers or employees in a more meaningful way than just issuing value. I think it's quite safe to say that it's a super competitive market in certain subsets of fintech, and talking to those consumers is becoming ever more difficult because the noise is just you know it's ever great, it's ever it's just becoming more and more difficult to do so. And I think consumers expect more than a standard points based system for loyalty and incentives. And I think gift plays are really meaningful, and we've got the proof to sort of show it, a more meaningful way to connect to those consumers. And when the journey is really integrated into that financial technology offering, be it a bank or a cashback company or a credit card company, we've seen usage just completely go through the roof. And it made, you know, a lot of these member services, premium services that are being released by these businesses using gift at the heart of it, are enabling their consumers and employees' money go further ultimately. That everyday shopping becomes really rewarding. And remember, a lot of the market we're talking to, although it's different parts of the stack, we're finding that a lot of the consumers they don't have access to the premium credit cards. They don't have access to these, you know, enormously rich loyalty schemes that reward the wealthy. These are everyday Americans and people that really are trying to make ends meet and they're living paycheck to paycheck. And this is a really meaningful way of building loyalty with those consumers, making their money go further, using the power of gift cards ultimately.
SPEAKER_01Okay, what would you say differentiates Tillow from your competitors?
SPEAKER_02I think rather than just being a network of brands and working through aggregators, we've gone one step further. We've made one very meaningful acquisition that enables us to have a tool set that almost creates a this web very well-rounded offering to our brand retail partners. So we represent brands. So we are a true two-sided marketplace. It's not just one-sided. We don't just have brands in our ecosystem. We actually have promotional engines, we have the ability for our buyers, our businesses to actually work much closer with the brand partners that we've onboarded into our ecosystem. So not only have we got huge breadth, more so than anybody else, we're really centered on providing a set of service to our brands and to our buyers from a technological perspective. Single API, so thousands of brands without the need for bespoke connections, we've got it through one connection, one float, if you will. So making it super simple for businesses to issue rewards from America into Portugal, through to Mexico, through to Canada. So super, super simple, super easy. I think multi-territory isn't something to sort of be sniffed at. It's very difficult to solve that problem, and very few, if anyone's really done it like we have. We have a very large team in Cape Town. We've got people in Australia, and we've got a large team in Europe and the UK, as well as America, and we're trying to create that what that first transatlantic sort of powerhouse to enable those consumers' employees to get more from that technological stack. And then I think lastly, the incumbents that we sort of compete with, especially here in America, the scale and the reporting and customer client service that we really pride ourselves on, the Tillow difference, as we like to call it. But you know, being a founder, still part of it and a meaningful part of it. I sort of pride myself on really being a part of those partner discussions and really helping brands, you know, get the insights and learnings and support that they need as you know, the same for our buyers as well.
SPEAKER_01So that space has really come a long way from the days of buying a gift card at the supermarket and and giving it out as a gift to a relative for their birthday. I think it's become hugely different than that. Maybe that was the start, but you guys are doing it a lot different way.
SPEAKER_02It's self-use. You'd never think out of all the volume that I just mentioned that we do, almost 80% of it is self-use. It's all self-use. There's no gifting really involved in it. There's appreciation, reward, and recognition, as we call it in the industry. There is reward and recognition that happens in this, but this is primarily self-use. This is I have been given a card or I'm getting a card, a gift card, so that I can make the value that I've been given greater. So I've been given 18 pounds 62, sorry, 18.62 of value from my bank as cash back, and I can move that onto a gift card into 22 bucks. And there's no-brainer sort of to do that. In the if I'm already going to Walmart shopping anyway, I might as well move that value to do that. And I think that is where there's a huge misconception of gift. Because the name itself sort of it doesn't connotate to actually what the volumes that we're seeing grow in, all the different use cases get born out of. And I think that in itself is it's super interesting because the humble gift card is actually a payment instrument in our world. It's a financial instrument that is just a redemption tool, no different than your bank card, but it's just branded currency rather than the American dollar.
SPEAKER_01Right.
New Use Cases And Global Scale
SPEAKER_01Well, where do you see the biggest growth opportunity in your segment that you're working in today?
SPEAKER_02Yeah, I was thinking about like where we center a lot of our attention and the use cases are just becoming ever more and more creative. I think one is these neobanks. So we're seeing huge adoption in Europe of you know, some incredible household names in terms of banking that are using gift as a way of giving more back to their consumers. So if you think about because you're a premium user within those customer applications, you're able to get access to perks and benefits via gift cards in a much more meaningful, integrated way. I think payouts in general are becoming much more thoughtful when it comes to using gift. Instead of it being issued as a check or a prepaid card, a Visa Mastercard, they're offering gift in there as well. And I think that is adding another personal dynamic to those payouts. And I also think that the merchant commission that's being offered is adding a whole load of different use case opportunities from applications such as one of our partners, Sprive, that is using that merchant discount commission to help pay off people's mortgages early. So it's all linked into your mortgage. You go shopping at your local store, that commission is collected, you pay the face value of those items, and that goes straight to pay off your mortgage. And it's that everyday spending that is rewarding those consumers. And I think there's more of those really interesting use cases that are getting born that's allowing consumers to put into pensions, put into stocks, put off paying off your mortgage, using the power of GIF that's enabling these amazing use cases to come to life.
SPEAKER_01Okay, well, what does success look like for Tillow over the next, say, three to five years?
SPEAKER_02Yeah, there's a lot of countries that we don't support today. I would love for every single country to be covered by Tillow's infrastructure, whereby if there's a consumer or an employee in that country, they have a catalogue that's got the top 30, 50 brands in their in their local economy that they can choose as a redemption brand for that value to go on to instead of a Visa Mastercard, and it just becomes a transaction. So a single API covering several thousand brands all over the ecosystem, giving our businesses that connect to us the ability to offer just incredible coverage. I think no one has solved this. It's a very, still very fragmented market. It's not like Visa and MasterCard in terms of their breadth. And I'd love to sort of be known as that household name as the digital, the digital provider of rewards and incentives that provides a whole set of tools for businesses to use gift as a way of talking to consumers and employees in a much more interesting and more impactful
Payments Trends And The Future
SPEAKER_02way.
SPEAKER_01Okay, when you look at the payments industry as a whole, what are some of the biggest trends that you think are reshaping the industry?
SPEAKER_02Yeah, I think there are still parties out here that have this delay of issuing gratification. If it's not real time, then you're sort of you're dead in the water if you haven't got a real loyalty programme that you can redeem your points. And I still think that that's the case today, even with some of the credit cards that I use today, still quite fragmented and delayed in the allocation of those rewards, which is a bit frustrating. So I think being much more embedded real time, I think stored value becoming programmable and allowing the fragmented nature of it. And I what I mean by that is without opening Pandora's box here, every brand has a set of different rules that come with it. Some can be balance checked, some can't, some can be cancelled, some can't. When you use your Visa Mastercard, it has the same rule set for applications to be provided to that business or andor consumer. So when you want a refund, you just get a refund on your card. You go into the store and you get a refund. That isn't the same in gift. And I think if it can be more programmable, you either using blockchain technology, and there are some cool companies doing this. I think that is going to help the industry as a whole grow and enable even more use cases to be on it. I think open banking, FedNow, RTP stuff here in the US, I think you know the US is quite behind when it comes to this compared to Europe and some other countries. Would love to see that happen here. And then you could have this incredible infrastructure enabling real-time value being issued across different use cases again, using gift at the center of it. Lastly, I think global but local. So if I go into my banking app to a chase, I've got rewards for America. That doesn't change when I go to the UK or Portugal or whatever. I'd love, you know, that's where I want these banking applications to really help their consumers wherever they're traveling, that they're able to use their rewards and incentives in those local countries. So global with the scale and whatever, but local in its offering, I think is really, really cool way of sort of thinking about it. That's how we're looking about looking at it.
SPEAKER_01Yeah, I love that that global but local view. I haven't I've heard that phrase in the past, but it's been many years since I've heard anyone use it. So certainly makes a lot of sense in what you're doing. Couple of final
Founder Advice Final Takeaway Closing
SPEAKER_01questions. So if you could go back and give yourself advice at the start of your career, what would that be?
SPEAKER_02Oh, I've heard many different people talking about like putting limits or ceiling on what you were able to achieve as an individual. I don't want to sort of sound cliche or cheesy, but I can't believe that 10 years in what we're doing and how we're doing it and how we've been able to achieve the things, and there's been some really hard times where we've been up against the wall and you know, trying to grow and funding things and being trying to be profitable and bootstrapping and not we haven't, you know, like I said, we've not raised hardly any money at all. And I think resilience mixed in with removing the roof or the ceiling of what you're able to create. Because I think when I started this business with my co-founder, and one of the reasons my co-founder moved on was that you know he'd lost interest in the business and wanted to sort of move on and go and do something completely different. And I think at the time I remember thinking, well, how big can this thing actually be? And I just thought stripping back some of the things that we were doing and getting back to basics that enabled us to really focus on the things that mattered. But ultimately, I look at this 10 years on, four years on from actually becoming CEO and doing the things that I've done and growing the company from 30 people to now, you know, the growth numbers that we've seen in the business. And actually, there's just so much to go and do. And that, you know, I really see that Tillo can become not just a unicorn, but it can actually fulfill enormous opportunity of going being able to fulfill almost my life's work in some respect. I never thought I'd say that in a business that has the humble gift card in it, but I sort of feel really passionate about fulfilling its mission of being coming as big as it can be and fulfilling its mission of enabling it to do the things that we set out to do in the early days, which is ultimately just being a trusted partner for our brands and partners and enabling to have the controls and the transparency that was very much needed in the early days. And I think, again, it goes to just removing the roof of what actually is a valuation or revenue metrics or people within the business that we touch, removing all of that. And I think just looking at something so bold and actually putting your colours to the mast and actually shooting for the stars in some respect. I think that is something that I wish I could, because I know along the way I I've lost sort of view of it. And actually, as we've grown and done the things we've done, I think actually a long way of saying it's patience, resilience, and removing the noise from what others perceive, including investors, perceive of how big you can get this. And I think I love the American view of just hitting it out the ballpark. Let's just go for it. Let's just try our hardest to fulfill what this thing could potentially be. And if we get stuck and it gets hard, who cares? Let's just go for it. Let's just try and make this thing as big as we can make we can make it. And I just love that mentality of trying to drive as fast as you can to get there, rather than being just a bit cautious, because what have you got to lose at the end of the day?
SPEAKER_01Love it. Love it. Great answer to that question. So, final question What's the one thing that Pateman's listeners that might be listening to the show today, what should they be thinking about right now? And you can certainly answer this related. To kind of your segment of the business and you know your business, but what should they really be thinking about today?
SPEAKER_02I think so. Gift cards aren't gifts. I think that's for I said it just a minute ago, they're not gifts, they're programmable stored value rail, no different than Visa Mastercard, that has a value on it that you can use for rewarding incentivizing in a much more impactful way. I think rewards are being part, and it's kind of the same sort of thing, but these rails of infrastructure aren't just marketing rails, they're actually payment rails. So I think that's something to think about. I think a lot of companies we talk to, you know, cashback I feel is is useful, but it's blunt. It doesn't have the sort of connotation of talking to that consumer in a much more meaningful, impactful way. So I think brands using brands that they people love, I think enable businesses to talk to them in a much more impactful way. I think payment companies have a really interesting opportunity to talk to their consumers and their merchants using gift in a way that I don't think I think some people are doing it great, but I think most people are not doing it that great. And I think here is an opportunity to change that consumer or business's behavior at a moment of a decision. And I think that can be something that I think is missed in a lot of conversations that we we certainly see, and that's what we're trying to evangelize, if you will. Yeah. I think that sort of paints a picture of how I think about it.
SPEAKER_01Okay. Well, I think that's a great way to wrap up the show. We'll have information on how to connect with you and the company in the show notes. So, Alex, thank you so much for being on the show. I know your time is very valuable, so I really appreciate you being here today.
SPEAKER_02The same. Thank you. I really appreciate the opportunity.
SPEAKER_01And to all you listeners out there, I thank you for your time as well. And until the next story.
SPEAKER_00Thank you for joining us this week on the Leaders in Payments Podcast. Make sure you visit our website at leadersinpayments.com, where you can subscribe to the show and where you'll find our show notes. If you enjoyed listening, please share on your social channels as well.