Digital Gift Card Market

The global digital gift card market size was valued at $ 258.34 billion in 2020, and is projected to reach $ 1,101.03 billion by 2030, growing at a CAGR of 15.8% from 2021 to 2030. 

With an unprecedented COVID-19 health crisis, the demand for digital gift cards has experienced significant growth, owing to limited use of cash payments in the market. In addition, as consumers have increased the usage of more effective & secured payments for shopping online, the key players have an opportunity to implement better product offerings by providing discounts for digital gift cards, during the pandemic situation.

A gift card is a stored value card that is utilized as an alternative source for money at a particular store or business store for purchasing goods and services. Digital gift cards are widely adopted as a part of development strategies for promoting businesses, increasing brand awareness, reducing fraud activities, and attracting new customers. As a result, these cards find extensive applications across diverse sectors, including food & beverages, retail, hospitality, consumer electronics, and others.

Rise in adoption of advance technologies in the payment sector and surge in awareness of digital payment across the globe are the major factors that propel the digital gift card market growth. In addition, high adoption of smartphones and rise in adoption of digital gift cards by corporate offices & financial institutions further fuel the growth of the digital gift card market revenue. However, security concerns with respect to digital gift cards is expected to hamper the market growth. Furthermore, surge in demand for digital gift cards from developing countries is expected to offer lucrative opportunities for the digital gift card market players in the upcoming years.

By functional attributes, the closed-loop card segment is contributing the largest market share in 2020 owing to lower processing fees as compared to open-loop card and growing craze about closed-loop card across the youth of developing nations. However, the open-loop cards segment is expected to witness growth at the highest rate during the forecast period, owing to varied features such as higher security, faster transaction processing and growing demand among the end users.

Region wise, North America is contributing the largest share in 2020 owing to rise popularity of corporate gifting cultures during special occasions, such as birthdays, incentives, festivals, and others in the U.S and Canada. However, Asia-Pacific digital gift card market is expected to witness the highest growth rate during the forecast period owing to growth in internet penetration, rapid surge in internet-literate population, and high disposable income of the Asian people.

The report focuses on growth prospects, restraints, and trends of the digital gift card market analysis. The study provides Porter’s five forces analysis to understand impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the digital gift card market share.

Segment review

The digital gift card market share is categorized on the basis of functional attribute, end user, application and region. Depending on functional attribute, the market is classified into open-loop card and closed-loop card. By end user, it is analyzed across retail and corporate. Based on the application, the market is divided into consumer goods, health & wellness, restaurants & bars, travel & tourism, media & entertainment and others. By region, the digital gift card market size is studied across North America, Europe, Asia-Pacific, and LAMEA, along with its prominent countries.

The key players profiled in the digital gift card market report are Amazon.com, Inc., Apple, Inc., Blackhawk Network Holdings, Inc., Fiserv, Inc., InComm Payments, Loop Commerce, Inc., National Gift Card Corporation, PayPal Holdings, Inc., Target Brands, Inc. and Walmart Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the digital gift card industry.

COVID-19 impact analysis

As governments across several countries have imposed lockdowns to curb the spread of virus, adoption of digital gift cards primarily among businesses has increased and is expected to continue to drive growth momentum for the digital gift card industry. This, in turn, has become one of the major growth factors for the digital gift cards market during the global health crisis. Moreover, the overall gift card industry is expected to witness higher growth during the COVID-19 pandemic, as governments across several regions are imposing new regulations to accelerate growth of electronic payments in respective countries.

Furthermore, as consumers are shifting toward contactless gift cards with scan able barcodes, companies in the market could develop & execute near-field communication (NFC)-based gift cards at a larger scale. This, as a result, would help gift card solution providers to sustain in the competitive business environment.

Top impacting factors

Rise in demand for advanced payment solutions

Gifts cards are considered similar to prepaid debit cards. The convenience, flexibility, reliability, and security of these cards have enabled them to be more popular among consumers for payments. These cards represent an important part of electronic payments. According to the Worldpay’s 2018, gift cards contribute 2% of e- commerce and 1% of point of sale (POS) spend globally. 

As consumers are consistently connected with shopping and pay through various ways such as mobile apps, this rapid growth in digital commerce, especially in mobile devices, provides an opportunity to merchants and issuers to adopt an increasing number of new technologies that provide their customers innovative and seamless payment options. 

For instance, VISA Inc., a U.S. based company is continuously working on different ways to avoid disruption in payments and revolutionize ways for consumers to pay more conveniently. It provides customer offerings in many new ways including mobile and IoT through Visa Token Service, P2P through Visa Direct, and digitized and streamlined manual processes through Connected Card. Such offerings are attracting customers to accept digital payments across the globe, which drives gift card adoption in the industry.

Increase in demand for innovative products

Gift cards have become one of the best ways for companies to make money. Ongoing technological innovations in gift cards enable high sales in companies and help them in revenue generation. These gift card innovations benefit companies by making them more unique and attractive. 

For instance, track gift card allows its users to buy and give gift cards online and offers them capabilities to see when those gift cards can be redeemed. It also allows recipients to donate their gift cards to charity and if a card goes unused after its expiry date, the card giver is not charged for it. Such broad innovative offerings focused on customer experience drive the digital gift card market growth.

Key Benefits For Stakeholders     

• The study provides an in-depth analysis of the global digital gift card market forecast along with the current trends and future estimations to explain the imminent investment pockets.
• Information about key drivers, restraints, & opportunities and their impact analysis on the global digital gift card market is provided in the report.
• Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the e-gift card market.
• The quantitative analysis of the market from 2021 to 2030 is provided to determine the digital gift card market potential.

 Digital Gift Card Market Report Highlights