Gift Card Market Set to Reach USD 2 Billion by 2030, Driven by Technological Advancements and E-Commerce Growth

Gift Card Market Set to Reach USD 2 Billion by 2030, Driven by Technological Advancements and E-Commerce Growth

According to Next Move Strategy Consulting, the global Gift Card Market is projected to experience robust growth, reaching USD 2 billion by 2030. This represents a compound annual growth rate (CAGR) of 8% by 2030. Gift cards, which can be used as a form of prepaid payment for purchases across various retail and service sectors, have become an increasingly popular financial tool among consumers worldwide.

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The Evolution of Gift Cards: Physical vs. Digital

Gift cards are primarily available in two forms: physical and digital. Physical gift cards, which are typically used in stores and online, are often given as presents or used as reward incentives. Digital gift cards, increasingly popular with the rise of mobile commerce, are stored in mobile wallets and offer increased convenience and security for users. According to recent statistics, 83.37% of the world’s population—roughly 6.6 billion people—are smartphone users, which continues to drive the demand for digital gift card solutions.

Factors Driving Market Growth

  1. Smartphone Adoption: The continued growth in smartphone usage is a key factor contributing to the expansion of the gift card market. Platforms like Gyft, available on both iPhone and Android, allow consumers to buy, send, and manage gift cards from top retailers, including Amazon and Target, directly from their smartphones.
  2. E-Commerce Boom: The surge in e-commerce and the growing preference for online shopping has significantly boosted the demand for digital gift cards. The increasing internet penetration, with over 5 billion users globally in 2022, has led to a rise in online gift card purchases, offering consumers a seamless shopping experience without the need to visit physical stores.
  3. Technological Innovation: Gift card solutions are becoming more advanced, with platforms incorporating big data, personalized services, and innovative formats. Companies like Amazon have introduced features like "Amazon Surprise," which allows users to send gift cards with personalized video clips or voice memos. QR code-based and origami-style gift cards are also gaining popularity for their unique, customizable appeal.

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Challenges Hindering Market Growth

Despite the promising growth trajectory, the gift card market faces certain challenges that could impede its expansion. Issues such as security vulnerabilities—ranging from hacking incidents to unauthorized use of funds—remain a concern. For instance, cybersecurity firms have highlighted risks such as bot attacks designed to exploit gift card systems, as well as potential fraud during digital gift card transactions. Additionally, consumer awareness regarding the proper use and terms of gift cards is still lacking in some regions.

Moreover, the “unclaimed property” issue, where unused gift card balances become unredeemed liabilities on company balance sheets, is another constraint for businesses in the sector.

Regional Insights

  • Europe currently dominates the global gift card market, driven by rising adoption across sectors like hospitality, retail, and banking. Strategic partnerships between merchants and payment providers, particularly in France, have helped shape the market dynamics, with key initiatives such as Gifted’s partnership with Nets to expand digital solutions across Europe.
  • North America is also witnessing substantial market growth, particularly driven by corporate incentives, loyalty programs, and government initiatives. For example, the introduction of restaurant gift cards by Onondaga County in the United States to support businesses during the COVID-19 pandemic has contributed to an uptick in gift card usage.
  • Asia-Pacific is emerging as a high-growth region, fueled by increased internet penetration, smartphone adoption, and the growing digital economy in countries like China and India.

Competitive Landscape

Key players in the global gift card market include industry giants such as Amazon, Apple, Walmart, Starbucks, and Best Buy, as well as specialized digital platforms like Qwikcilver Solutions and InComm Payments. Companies are increasingly focusing on partnerships, acquisitions, and innovative offerings to expand their market presence.

For example, Blackhawk Network's collaboration with Tender Retail aims to expand gift card payment solutions and cater to diverse consumer demands. Apple’s 2021 Holiday Gift Guide also showcased personalized holiday cards, offering unique creative solutions for holiday gift-giving.

Conclusion

The global gift card market is set to experience significant growth over the next decade, driven by increasing smartphone adoption, the rise of e-commerce, and continuous technological innovation. Despite challenges such as security concerns and lack of awareness, the future of the gift card market looks promising, with new developments helping to create more secure, customized, and convenient solutions for consumers and businesses alike.

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