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The gift card market size is forecast to increase by USD 1.1 billion at a CAGR of 14.46% between 2023 and 2028. The market is experiencing significant growth, driven by the expansion of the e-commerce sector and the increasing popularity of open-loop gift cards. The e-commerce industry's growth has led to a rise in online gift card sales, providing consumers with greater convenience and accessibility. Open-loop gift cards, which can be used like debit or credit cards, offer additional benefits such as longer expiration dates and the ability to be reloaded. However, there are challenges to the market's growth, including the risk of fraud and security concerns, as well as the additional loss of money for consumers when purchasing gift cards with a fee. Despite these challenges, the market is expected to continue its growth trajectory, fueled by consumer demand and technological advancements.
Gift cards have become a popular form of payment and gifting in today's digital age. These prepaid cards allow the recipient to use a specific amount of money at stores, websites, restaurants, and other retail establishments. The convenience and flexibility of gift cards have made them a preferred choice for customers for expressing love, gratitude, and appreciation. Consumer behavior plays a significant role in the growth of the market. Younger generations prefer digital and virtual gift cards, which can be sent via email or text message (E gifting) or used in M commerce and E commerce transactions. Strategic alliances between businesses and brand owners have led to the integration of gift cards into customer loyalty programs, further boosting their popularity.
Additionally, the market for gift cards includes various types such as digital cards, virtual cards, and mobile gift cards. These cards offer businesses a marketing tool to attract and retain customers. The market is expected to grow as more businesses adopt this payment and gifting solution to cater to changing consumer preferences. Whether it's a local store or a global brand, gift cards provide a convenient and personal way to show appreciation and build customer relationships.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The e-gifts cards segment is estimated to witness significant growth during the forecast period.Millennials and Gen Z prefer cashless transactions, making customizable and practical digital gift cards increasingly popular. E-gift cards, enabled with a code and emailed to recipients, offer convenience and flexibility in today's digitally-driven retail sectors. Travel companies, OTT platforms, content platforms like SonyLiv and Zee5, and service providers such as MakeMyTrip, Yatra, Cleartrip, Thomas Cook, Ola, Starbucks, Domino's, and Chaayos, have embraced digital gift cards. The e-commerce market's growth, driven by internet accessibility and online shoppers, has accelerated the adoption of digital services. Demonetization and the Digital India initiative have further fueled e-commerce activities and the shift towards digital payment methods.
Additionally, FinTechs and PayTechs have introduced various payment methods, enhancing customer journeys. E-gift cards are now used for hospitality, spa services, and sales, improving cash flow and internet penetration. The versatility of digital services has transformed physical retail spaces into online retail spaces, making e-gift cards an essential component of modern retail transactions.
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The E-gifts cards segment was valued at USD 580.00 million in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market is experiencing significant growth, particularly among Millennials and Gen Z, who prefer cashless transactions for their practicality and customizability. With the increasing popularity of mobile payments and internet accessibility, digital gift cards have become a preferred choice for online shoppers. The retail sectors, including travel companies, OTT platforms, content platforms like SonyLiv and Zee5, and e-commerce marketplaces, are embracing digital services to cater to the changing consumer behavior. In the retail sector, companies such as MakeMyTrip, Yatra, Cleartrip, Thomas Cook, Ola, Starbucks, Domino's, and Chaayos offer digital gift cards for their services. The demonetization and the Digital India initiative have further boosted the adoption of digital services in India.
Moreover, the FinTechs and PayTechs have also played a crucial role in enabling cashless transactions and offering various payment methods. The customer journey from physical retail spaces to online retail spaces has become seamless, with the availability of digital gift cards. The sales of digital gift cards have been on an upward trend due to their convenience, ease of use, and flexibility. The increasing internet penetration and the availability of digital services have also contributed to the growth of the market. Overall, the market is expected to continue its growth trajectory in the coming years, driven by the changing consumer preferences and the increasing adoption of digital services.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growth of e-commerce sector is the key driver of the market. The e-commerce market is experiencing significant expansion in countries including the US, China, India, and the UK. This growth can be attributed to several factors, such as increased internet and smartphone usage and a tech-savvy population. E-commerce sales are on the rise, with consumers preferring the convenience of shopping online over traditional brick-and-mortar stores. Payment methods like credit and debit cards, internet banking, and electronic wallets have facilitated this shift.
Additionally, E-commerce platforms offer customers a vast selection of products, the ability to read customer reviews, and time savings. Digital gift cards, including tax-advantage cards, mobile gift cards, and virtual cards, have emerged as effective marketing tools for brand owners and customer loyalty programs. Strategic alliances between e-commerce companies and market participants have further fueled the growth of digital cards in B2B sales.
The rise of open-loop gift cards is the upcoming trend in the market. The open-loop the market has witnessed significant growth in recent years, with an increasing number of market participants introducing these cards over closed-loop alternatives. Open-loop gift cards offer greater flexibility as they are not restricted to a specific brand or merchant, and are accepted at various outlets that support the payment card network, such as Visa, MasterCard, and American Express. These cards have gained popularity among consumers due to their widespread acceptance and convenience.
In addition, brand owners and customer loyalty programs have adopted open-loop gift cards as a strategic marketing tool. InComm Payments, a leading UK-based company specializing in prepaid products and payments technology, has been offering its Vanilla Go global open-loop gift card brand for over a decade. The emergence of mobile commerce (M commerce) and e-commerce has further boosted the adoption of digital and virtual open-loop gift cards. companies are continually innovating to meet the evolving market demands, expanding the product offerings in the open-loop gift cards segment.
The additional loss of money in using gift cards is a key challenge affecting the market growth. The market witnesses active participation from various industries, including tax-advantage cards, E gifting, M commerce, and E commerce. Brands often use digital and virtual cards as marketing tools to boost sales and enhance customer loyalty programs. Strategic alliances between market participants have led to the emergence of mobile gift cards, offering convenience and flexibility to consumers.
However, there are challenges associated with gift cards. Recipients may overlook using expired cards or misplace physical gift cards, resulting in monetary loss. Moreover, purchasing gift cards in specific denominations may leave unused balances, limiting their utility. Despite these challenges, gift cards remain a popular choice for B2B sales and personal gifting, offering a seamless and convenient shopping experience.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Card USA Inc - The company offers gift cards for a wide range of financial, open-loop, store-branded, and closed-loop gift card options that increase awareness of the respective brands and diversify the customer's purchasing power.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Gift cards have become a popular and convenient way to give the amount of money as a present for various occasions such as birthdays, holidays, and special occasions. Prepaid cards are available in both physical form, which can be used in stores and retail establishments, and digital form, which can be used on websites, restaurants, and even mobile wallets. The giver can choose to purchase a gift card from a retailer or brand, or from other businesses that offer digital gifting options. Consumers prefer gift cards due to their convenience, as they eliminate the guesswork of buying the right gift for the recipient.
Thus, the impacting factors for the growth of the market include consumer preferences for digital gifting options, convenience, rewards & incentives, experiences, and loyalty programs. Customer loyalty and employee engagement are also key drivers for businesses to offer gift cards. Younger generations, in particular, are more likely to prefer digital platforms for gifting. The convenience of online purchasing and the ability to send digital gift cards instantly make it an attractive option. Corporate clients also use gift cards for employee rewards and incentives. In conclusion, gift cards are a popular form of giving that offers convenience, flexibility, and a wide range of options for both givers and recipients. The market for gift cards is expected to continue growing as consumer behavior shifts towards digital platforms and businesses look for ways to engage and retain customers.
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Market Scope |
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Report Coverage |
Details |
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Page number |
163 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 14.46% |
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Market growth 2024-2028 |
USD 1.1 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
11.01 |
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Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
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Performing market contribution |
North America at 40% |
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Key countries |
US, Australia, Japan, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alighieri, Blackhawk Network Holdings Inc., Card USA Inc, Duracard Plastic Cards, Fidelity National Information Services Inc., Fiserv Inc., FleetCor Technologies Inc., Givex Corp., Hennes and Mauritz AB, InComm Payments, JIFITI PRODUCTS, Kindcard Inc., PineLabs Pvt. Ltd., Plastek Card Solutions Inc., Runa Network Ltd., Square Inc., Tele Pak Inc., TransGate Solutions, Village Roadshow Ltd., and Yiftee Inc. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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