Increase in demand for advanced payment solutions, rise in demand for innovative products, and high adoption rate of smartphones drive the growth of the global gift cards market.
Allied Market Research recently published a report, titled, “Gift Cards Market by Card Type (Closed-Loop Card and Open-Loop Card) and End User (Retail Establishment and Corporate Institutions): Global Opportunity Analysis and Industry Forecast, 2020–2027”. As per the report, the global gift cards industry generated $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.
Major determinants of the market growth
Increase in demand for advanced payment solutions, rise in demand for innovative products, and high adoption rate of smartphones drive the growth of the global gift cards market. However, lack of security hampers the market growth. On the contrary, increase in demand for gift cards from developing countries is estimated to open new opportunities for the market players in the future.
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Covid-19 scenario:
- During the Covid-19 pandemic, the demand for open-loop gift cards increased as it is conveniently available, and offers flexibility in purchases.
- Moreover, as governments across various countries have imposed lockdowns to curb the spread of the virus, the adoption of gift cards among businesses has increased.
The open-loop card segment to portray the highest CAGR through 2027
By card type, the open-loop card segment is estimated to manifest the highest CAGR of 18.7% during the forecast period, owing to benefits such as security, efficiency, reliability, & flexibility. However, the closed-loop card segment held the largest share in 2019, accounting for nearly three-fourths of the global gift cards market, as it provides several benefits such as providing an opportunity to businesses to make money on products purchased using the gift card,.
The retail establishment segment dominated the market
By end user, the retail establishment segment held the largest share in 2019, contributing to nearly three-fourths of the global gift cards market, owing to ongoing trend of using their branded currencies in omnichannel commerce. However, the corporate institutions segment is estimated to register the highest CAGR of 20.6% during the forecast period, as the majority of businesses are increasingly using gift cards as a reward tool for multiple groups.
North America held the lion’s share
By region, the market across North America dominated in 2019, accounting for more than two-fifths of the market. This is due to governments in countries such as the U.S. and Canada have extended their involvement in the use of digital payments. However, the global gift cards market across Asia-Pacific is projected to portray the highest CAGR of 17.8% from 2020 to 2027, owing to presence of emerging economies coupled with increase in use of smartphones.
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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.
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