Many consumers are perceiving gift cards as an alternative to cash, and as a result, the average number of gift cards bought per consumer per year has been on a constant increase, especially in countries like the United States and the United Kingdom. Furthermore, gift cards have also emerged as the most requested gifting item during the holiday season. In the United States, for instance, 54% of Americans said that gift cards are the most requested items during the 2022 holiday season, according to a report from the National Retail Federation.
The growing adoption of digital gift cards has led to a high growth period for providers in the last 12 months. To further support their growth and scale their operations by launching new products and categories, digital gift card providers are raising venture capital and private equity funding rounds globally.
Along with consumer-focused gift card providers, the trend of fundraising is also seen among business-focused gift card providers. For instance,
Along with gift cards, the firm also provides benefit programs for meals, transport, nursery, training, and others. The firm is currently operational in Spain and Portugal. However, the firm plans to expand its operations in more countries, including Mexico and other countries in Latin America and Southern Europe.
With the corporate gifting economy booming over the last few years, and the trend projected to further continue over the next three to four years, PayNXT360 expects more such global firms to raise venture capital and private equity funding. Furthermore, the competitive landscape is also expected to grow significantly, amid the entry of new players and expansion strategy adopted by well-funded firms.
On the consumer side, the demand for digital gift cards is also projected to grow significantly over the next five years. The shift to digital channels, along with the rising internet and smartphone penetration rate, are among the factors that will support the demand for digital gift cards. Consequently, PayNXT360 also expects more players to foray into the consumer-focused gift card segment from the short to medium-term perspective. This coupled with the trend of funding raising from venture capital and private equity firms will keep driving the competitive landscape and innovation in the global gift card market over the next three to four years.
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