Gift Card Market to Grow by USD 1.33 Trillion (2025-2029), Boosted by E-commerce Growth, AI Driving Market Transformation – Technavio | Banking Financial Services

NEW YORK, Feb. 7, 2025 /PRNewswire/ — Report with the AI impact on market trends – The global gift card market size is estimated to grow by USD 1.33 trillion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of over 15.4% during the forecast period. Growth of e-commerce sector is driving market growth, with a trend towards rise of open-loop gift cards. However, additional loss of money in using gift cards poses a challenge. Key market players include 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 Driver

Gift cards have become a popular trend in both physical and digital retail spaces. Prepaid cards loaded with a specific amount of money have revolutionized payment methods for various stores, websites, restaurants, and businesses. Consumers prefer the convenience of gifting digital options for birthdays, holidays, and special occasions. The younger generations, including Millennials and Gen Z, favor digital gifting over tangible gifts. Impacting factors like cashless transactions, loyalty programs, and customer behavior have boosted the use of gift cards. Brands and retailers offer digital gifting options as marketing tools and rewards & incentives for customer loyalty. Other businesses, including travel companies, OTT platforms, and content platforms, also use digital gift cards to enhance customer experiences. Market participants like FinTechs, PayTechs, and mobile wallets have entered the scene, offering digital platforms for seamless gifting experiences. Demonetization, E-commerce activities, and the Digital India initiative have further fueled the growth of digital gift cards. Strategic alliances between brands and businesses, tax-advantage cards, and E gifting have also contributed to the market’s expansion. In conclusion, gift cards have become a practical, customizable, and environmentally friendly gifting solution for consumers, businesses, and individual users alike. The market is expected to continue growing, impacted by factors such as mobile payments, internet accessibility, and the increasing popularity of online shopping. 

An increasing trend among vendors is the launch of open-loop gift cards over closed-loop ones. Open-loop cards, branded with payment card processors like Visa, MasterCard, and American Express, offer wider acceptance as they are not limited to a specific business. This preference among customers is driving the development of new open-loop gift card products. For instance, InComm, a UK-based prepaid product and payments technology company, introduced Vanilla Go, a global open-loop gift card brand, over five years ago. Open-loop Mastercard gift cards provide a personalized gifting experience. 

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Market Challenges

• Gift cards have become a popular payment method for consumers during special occasions, birthdays, holidays, and as expressions of love, gratitude, and appreciation. Prepaid cards offer convenience for both givers and recipients, allowing them to use the amount of money stored on the card at various stores, websites, restaurants, and retail establishments. Businesses, including retailers or brands, other businesses, and corporate clients, issue gift cards as rewards & incentives, experiences, or tangible gifts. Digital gifting options have gained traction among younger generations such as Millennials and Gen Z, who prefer cashless transactions and mobile wallets. Impacting factors include consumer preferences, customer behavior, internet accessibility, and the growing E-commerce activities under the Digital India initiative. Gift cards serve as marketing tools for brand owners and customer loyalty programs, and can be used in various sectors like travel companies, OTT platforms, content platforms, and hospitality services. Market participants include FinTechs and PayTechs, offering digital platforms for online sales and redemption of gift cards. Strategic alliances between retailers and these platforms can impact cash flow and customer journeys, as physical retail spaces merge with online retail spaces. Tax-advantage cards, E gifting, M commerce, and E commerce are also part of this growing market. Virtual cards and mobile gift cards are increasingly popular, offering customizable and environmentally friendly alternatives.
• Gift cards offer an alternative way to give the gift of choice to recipients. However, they come with certain challenges. For instance, some gift cards have expiry dates, which may result in unused funds if not utilized within the specified period. Additionally, physical gift cards can be misplaced, leading to a loss of the funds loaded on them. Moreover, gift cards are available in various denominations, and any remaining balance after a purchase may go unused. These factors may result in additional spending or lost funds. To mitigate these issues, consider digital gift cards or setting reminders for expiry dates.

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Segment Overview 

This gift card market report extensively covers market segmentation by

• Type
• E-gifts Cards
• Physical Gift Cards
• Distribution Channel
• Geography
• North America
• Europe
• APAC
• Middle East And Africa
• South America
• Card Type
• Closed-loop Card
• Open-loop Card

1.1 E-gifts cards- E-gift cards have become a popular and convenient gifting solution in the retail sector. Their evolution has been rapid, with digitalization playing a significant role in their transformation. E-gift cards, also known as digital cards, are delivered electronically via email and offer enhanced versatility and flexibility. They are an ideal option for last-minute gifting and eliminate the risk of losing physical cards. In the corporate sector, e-gift cards have gained popularity as suitable gifting options for employees, clients, and stakeholders. Vendors benefit from their financial viability and ease of integration with core products and services. The elimination of logistical and management issues associated with physical cards increases operational efficiencies for businesses. These factors are expected to drive the growth of the e-gift card segment in the market during the forecast period.

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Research Analysis

Prepaid gift cards have revolutionized the way we express love, gratitude, and appreciation. These plastic or digital cards allow the recipient to receive a specific amount of money that can be used for payment at various stores, websites, restaurants, and retail establishments, both online and offline. The convenience of gift cards has made them a popular choice for consumers, especially younger generations, who prefer e-gifting, M commerce, and e-commerce. Brand owners use gift cards as a marketing tool to boost sales and customer loyalty. Strategic alliances between businesses have led to the acceptance of gift cards at an increasing number of outlets. Digital and virtual cards have added to the flexibility and convenience of gift cards, making them an essential component of modern consumer behavior. Gift cards offer a personal touch to gifting, allowing the customer to choose how and where to spend the money. They provide a sense of excitement and anticipation for the recipient, making them a thoughtful and practical gift. Whether it’s a special occasion or a simple gesture of appreciation, gift cards continue to be a popular choice for expressing love and gratitude.

Market Research Overview

Prepaid gift cards have revolutionized the way we give and receive amounts of money as presents. These cards, which can be used as a payment method in stores, websites, restaurants, and other businesses, have become increasingly popular for various occasions such as birthdays, holidays, and special occasions. The convenience of gift cards appeals to both the giver and the recipient, allowing for digital gifting options and instant gratification. Consumers, especially younger generations like Millennials and Gen Z, prefer cashless transactions and practical, customizable, and environmentally friendly gifts. Retail sectors, travel companies, OTT platforms, content platforms, and hospitality industries have embraced digital gift cards as a marketing tool and customer loyalty program. Impacting factors include loyalty programs, customer behavior, internet accessibility, online shoppers, and the growing popularity of mobile wallets and digital platforms. Market participants include retailer or brand-specific cards, tax-advantage cards, E gifting, M commerce, and E commerce platforms. Strategic alliances between FinTechs, PayTechs, and businesses have further expanded the reach and usage of gift cards. Virtual and mobile gift cards offer flexibility and convenience, making them a preferred choice for individual users and corporate clients alike. The impact of the Digital India initiative and demonetization has also accelerated the adoption of digital services and cashless transactions.

Table of Contents:

1 Executive Summary

2 Market Landscape

3 Market Sizing

4 Historic Market Size

5 Five Forces Analysis

6 Market Segmentation

• Type
• E-gifts Cards
• Physical Gift Cards
• Distribution Channel
• Geography
• North America
• Europe
• APAC
• Middle East And Africa
• South America
• Card Type
• Closed-loop Card
• Open-loop Card

7 Customer Landscape

8 Geographic Landscape

9 Drivers, Challenges, and Trends

10 Company Landscape

11 Company Analysis

12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio