According to PayNXT360’s Q4 2020 Global Gift Card Survey, integrating gift card into mobile apps is expected to record increased investment over the next 4-8 quarters. Leading retailers are focusing on creating a digital gift card program that can help them to increase traffic, boost sales and cultivate brand loyalty. It has become critical for retailers to embrace the new generation of mobile integrated digital / e-gift cards. Given the increasing self-use, retailers need to start viewing gift card as payment tool and enhance the value proposition with loyalty programs and option to reload.
In addition, mobile wallet providers are also offering various cashback offers on purchase of gift cards on their mobile application. All these factors along with convenience are driving the growth of mobile gift cards.
Globally, the adoption of gift cards has seen a steady increase over the years. Consumers have been using gift cards for various transactional purposes such as exchanging it for cash, buying cryptocurrencies, and using it for regifting. The growth in adoption of gift cards is due to increase in use of gift cards for self-gifting, supported by discounts offered by retailer; as well as growth in online shopping. Moreover, customers are becoming more cautious about their spending due to the economic slowdown - as an effect of the COVID-19. Consequently, gift cards are also offering a way to manage financial spending. Traditionally, general purpose prepaid cards have occupied this space, but ease of procurement is helping gift card gain share.
This report details the impact of economic slowdown along with change in business and consumer sentiment due to disruption caused by Covid-19 outbreak on gift card industry.
Though growth of gift card industry has been impacted due to pandemic, there are certain segments which will gain market share. There are interesting trends emerging across various segments, which are expected to fundamentally reshape gift card industry dynamics. Despite near-term challenges, medium to long term growth story of gift cards remains strong.
