Firms are forging strategic alliances to launch crypto-linked gift cards and expand the distribution network in 2023

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Over the last three to four years, the popularity of cryptocurrencies has grown significantly worldwide. The current macroeconomic environment, including rising inflation, is expected to further drive the uptake of digital assets. In Latin America, especially, more people are investing in cryptocurrencies to preserve the value of their money amid growing inflation. This rise in popularity and adoption of cryptocurrencies has led to the launch of various crypto-linked gift cards in 2023.

• In March 2023, Binance, one of the leading cryptocurrency exchanges worldwide, announced that the firm had entered into a strategic collaboration with MrPay, a payments aggregator in Italy. As part of the alliance, the two firms have launched Binance Gift Cards.
• These gift cards will enable Italians to buy cryptocurrencies from offline retailers, including at kiosks associated with MrPay. Currently, the Binance Gift Cards are available for purchase at 5,000 outlets. However, the firm is planning to increase the distribution network to 15,000 outlets by the end of 2023.

Binance is not the only firm focused on expanding the distribution network for crypto-linked gift cards. Amid the growing popularity of cryptocurrencies, many other firms offering crypto-linked gift cards are forging strategic alliances to expand their distribution network and reach more potential customers worldwide. In the United States, for instance, BitCard and Blackhawk Network entered into a strategic partnership in March 2023. The alliance will see the availability of Bitcoin Gift Cards, offered by BitCard, at select retailers in the North American market.

Through the collaboration, BitCard is seeking to leverage the widespread network of Blackhawk Network in the United States to drive the sales of its Bitcoin Gift Cards. Blackhawk Network, on the other hand, is seeking to diversify its offerings and drive better customer engagement. The alliance will enable retailers, airlines, loyalty firms, and many more within the Blackhawk Network to purchase Bitcoin Gift Cards and offer them to their customers as part of their existing rewards or loyalty programs.

These collaborations and the expanded distribution network are expected to further drive the popularity and adoption of crypto-linked gift cards worldwide from the short to medium-term perspective.

As new technologies come to the forefront, innovation in the gift card ecosystem is expected to accelerate over the next three to four years. Currently, firms are seeking to integrate gift cards and the Web3 ecosystem.

• In February 2023, DigiGift, an innovative startup in the gift card industry, announced the launch of an NFT-based decentralized marketplace for gift cards. By integrating the NFT (non-fungible token) technology, the firm seeks to disrupt the conventional methods of buying, selling, and trading such assets.

Gift card fraud is a growing concern for the fast-growing industry and through the integration of NFT technology, DigiGift is seeking to provide a secure and unique identification and management platform for gift cards. While the platform and the technology are currently under the testing phase, the firm had collaborated with 100s of partners and sold a few gift cards as well.

From the short to medium-term perspective, PayNXT360 expects more such innovative startups to emerge in the global gift card landscape and aid innovation and market growth worldwide. The amalgamation of technology and gift cards, enabling a tamper-proof-way of verifying ownership and ensuring the authenticity of each transaction, will also aid the adoption of gift cards among consumers, who are still reluctant to adopt the payment method due to the growing number of gift card frauds around the world.

Furthermore, such innovative gift card projects can also aid government disbursement programs, ensuring that the funds are received and used by the intended person. Widespread adoption of such NFT-powered gift card marketplaces can, therefore, lead to more government institutions adopting gift cards as a tool to disburse aid and incentives to their citizens. This will subsequently support the growth of the overall gift card market globally over the next three to four years.

While innovation is expected to grow significantly in the global gift card market, PayNXT360 also expects more firms to enter into strategic alliances to launch crypto-linked gift cards and expand their distribution network in 2023.

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