Gift Cards Market Size, Share | Competitor Strategies & Trends by 2027 (2023)

Gift Cards Market Outlook - 2027

The global gift cards market size was valued at $619.25 billion in 2019, and is projected to reach $2,076.51 billion by 2027, growing at a CAGR of 16.2% from 2020 to 2027.

With an unprecedented COVID-19 health crisis, the demand for 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 gift cards, during the pandemic situation. .

Gift cards, also known as gift certificates, gift vouchers, or gift tokens, are generally issued by a retailer or bank. In addition, gift cards are used as a developmental strategy for promoting businesses, attract new customers, increase brand awareness, reduce fraud, and improve business sales. Moreover, a gift card can be utilized as an alternative source for money at a particular store or business store for purchases related to goods or services.

Consistent connection of consumers with shopping, owing to rapid growth in digital commerce and increase in number of new technologies that provide customers with innovative & seamless payment options are the major growth factors for the market growth. In addition, ongoing technological innovations in gift cards enable high sales in companies by making their product offerings more unique & attractive, therefore, propels the gift cards market growth.

However, ensuring secure management & privacy of consumer data is one of the major factors that limit the market growth. Conversely, developing economies offer significant opportunities for gift card solution providers to expand & develop their offerings, especially among emerging economies such as Australia, China, India, Singapore, and South Korea. In addition, technological advancements associated with payment solutions and increase in demand for branded products are expected to provide lucrative opportunities during the forecast period.

The closed-loop gift card segment dominated the gift cards market in 2019, and is projected to maintain its dominance during the forecast period. This is attributed to several benefits such as benefits providing an opportunity to businesses to make money on products purchased using gift cards and free activation for users, which, in turn, drive adoption of closed loop gift card.

The report focuses on growth prospects, restraints, and trends of the gift cards market analysis. The study provides Porter’s five forces analysis to understand the 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 gift cards market.

Segment review

The gift cards market is segmented on the basis of card type, end user, and region. On the basis of component, the market is bifurcated into solution and services. In terms of card type, it is divided into closed-loop card and open-loop card. By end user, it is bifurcated into retail establishment and corporate institutions. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The report analyzes profiles of key players operating in the market including Amazon.com, Inc., American Express Company, Blackhawk Network Holdings, Inc., Fiserv, Inc., Givex Corporation, InComm Payments, PayPal, Inc., Paytronix Systems, Inc., Qwikcilver Solutions Pvt Ltd., and Walmart Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

COVID-19 impact analysis

COVID-19 pandemic has a significant impact on the gift cards market, owing to increase demand particularly for open-loop gift cards is the major growth factor for growth of the market. As it is conveniently available & provides ease of use and flexibility for purchases; amid the COVID-19 pandemic situation. Furthermore, as governments across several countries have imposed lockdowns to curb the spread of virus, adoption of gift cards primarily among businesses, has increased and is expected to continue to drive growth momentum for the gift card industry. This, in turn, has become one of the major growth factors for the gift cards market during the global health crisis.

Top impacting factors

High adoption rate of smartphones

Gift cards have become more innovative with rapid evolution of smart phones. Use of modern technology and marketing strategies has created different ways for gift card lovers and smartphone users to integrate everything into one convenient package. Rise in adoption of smart phones is expected to boost the gift cards market by offering flexible & convenient ways of payment for customers. For instance, Gyft, which is available on iPhone and Android, is one of the most popular solutions. Users can load their gift cards into the app and use whenever they are out shopping. More number of such integrations are expected to drive growth of the market.

Lack of security

The gift cards market faces several security challenges, such as high risk of being hacked by hackers and thieves, which acts as a major restraint for the market. For instance, Distil Networks recently discovered GiftGhostBot, which attacked almost 1,000 websites to find gift cards leading to breach of access to their balance. It has become an example of growth in threat in the global gift cards market. In addition, in a rush to make mobile gift card rollouts as convenient and low-cost as possible; companies such as Target and Starbucks have overlooked security holes, which allows any shopper to use money loaded into other shopper’s gift cards. These security bottlenecks hinder the gift cards market growth.

Surge in demand for gift cards from developing countries

Increase in demand for advanced products and technological advancements associated with payment solutions have been recorded in recent years. This growth is supported by presence of untapped demands and surge in need for better transactional solutions in countries such as China, Japan, and Australia. With increase in use of mobile and rise in internet penetration globally, the gift card industry is being shifted from plastic to digital gift cards. Moreover, increase in use of smartphones & digital wallets are expected to offer opportunities for the gift cards market during the forecast period.

Key benefits for stakeholders

• The study provides in-depth analysis of the global gift cards market share along with current & future trends to illustrate the imminent investment pockets.
• Information about key drivers, restrains, and opportunities and their impact analysis on the market size are provided in the report.
• Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
• An extensive analysis of the key segments of the industry helps to understand the global gift cards market trends.
• The quantitative analysis of the global gift cards market from 2020 to 2027 is provided to determine the market potential.

Key market segments

By Card type

• Closed-loop Card
• Open-loop Card

By End User

• Retail Establishment
• Corporate Institutions

By Region

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Netherlands
  • Spain
  • Italy
  • Nordic Countries
  • Rest of Europe
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Rest of Asia-Pacific
• LAMEA
  • Latin America
  • Middle East
  • Africa

Key market players

• Amazon.com, Inc.
• American Express Company
• Blackhawk Network Holdings, Inc.
• Fiserv, Inc.
• Givex Corporation
• InComm Payments
• PayPal, Inc.
• Paytronix Systems, Inc.
• Qwikcilver Solutions Pvt Ltd.
• Walmart Inc.