Gift card launches are increasing across different industry verticals amid growing demand in 2023

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The popularity of gift cards, especially digital ones, is on the rise globally. The trend, which picked up momentum during the pandemic outbreak, has been largely driven by a tech-savvy population and robust digital payment infrastructure worldwide. The adoption of the payment tool is rising across industry verticals. This has resulted in a higher number of new product launches in 2023. Travel and retail are among the sectors where new gift card solutions have been launched in the global market over the last 12 months.

Transat Distribution Canada (TDC), in Canada, launched a travel-focused gift card solution in partnership with Givex. In the retail segment, EML Payments launched a digital gift card solution in the United States and Canadian markets. In other regions of the world, too, retail gift card launches are rising in numbers in 2023.

Doha Festival City, for instance, entered into a strategic collaboration with the Qatar Islamic Bank and Mastercard. The partnership is aimed at launching a gift card solution that will allow customers to make cashless payments across the mall. The service is also aimed at driving the growth of the cashless economy in Qatar. 

Going forward, PayNXT360 expects more such gift card launches in the retail and travel sector. The trend is also picking up pace in the dining segment, wherein restaurants and online food delivery platforms, are launching innovative solutions.

• The Muddler, which is a luxury pan-Asian restaurant, revealed a digital gift card solution in July 2023. The gift card product offers diners the opportunity to treat their loved ones to a meal from The Muddler. As the gift card is only available in digital format, the restaurant has made the solution available for purchase through its website.
• DoorDash, in August 2023, entered into a strategic partnership with loyalty provider Paytronix to provide restaurants with a service to develop loyalty programs and support gift card payments. With the Paytronix integration, customers ordering from participating DoorDash restaurant partners can pay using the gift card at the time of checkout.

The usage of gift cards is also growing at a rapid pace in the gaming industry, especially in the United States. To tap into the trend and high-growth segment, gift card providers are launching new solutions in the segment. Blackhawk Network, for instance, launched its sports betting gift card to three new states including Maryland, Kansas, and Wyoming. The gift card service has been experiencing strong popularity in the states of New York and Louisiana, since its launch in August 2022. PayNXT360 expects the service to also gain strong adoption in the states of Maryland, Kansas, and Wyoming.

Furthermore, as the popularity of gaming gift cards continues to grow in the United States, PayNXT360 projects more providers to enter the market with their innovative products. This will further aid the growth of the overall gift card market in the United States over the next five years. Based on PayNXT360’s estimates, the gift card market is expected to grow at a compound annual growth rate (CAGR) of 5.7% from 2023 to 2027. During the period, the industry will increase from US$185.4 billion in 2022 to US$247.9 billion by 2027.

Apart from these sectors, the adoption of digital gift cards has also driven new product launches in the digital assets space. Many of the cryptocurrency exchanges have launched gift cards over the last 12 months and the trend is projected to further continue from the short to medium-term perspective.

• Gate.io, one of the leading exchanges in the crypto market, announced the launch of a crypto gift card in July 2023. The solution has been specifically launched to enhance user experience and promote the mass adoption of digital assets.
• Codego, a fintech firm, also launched crypto gift cards for digital asset enthusiasts in June 2023. Apart from personal gifting, Codego is also targeting corporate gifting and incentive space through its crypto gift card solution.

With cryptocurrencies gaining widespread adoption, especially in nations where inflation has increased significantly, these product launches are expected to grow in numbers significantly from the short to medium-term perspective. Moreover, these product launches will also aid the competitive landscape and innovation over the next three to four years. Overall, PayNXT360 maintains a robust growth outlook for the gift card industry from the short to medium-term perspective.

To know more and gain a deeper understanding of the global gift card market, click here.