According to PayNXT360's Q4 2021 Global Gift Card Survey, the gift card industry in the United States is expected to grow by 9.5% on an annual basis in 2022. The growth momentum is expected to grow over the forecast period, recording a CAGR of 8.3% from 2022 to 2026. The strong growth over the last two to three years has created many growth opportunities for gift card providers in the country. Consequently, these companies are launching innovative products to expand their market share in the country. Moreover, the market is expected to witness increasing strategic partnerships over the period.
In April 2022, Giverrang, a Connecticut-based start-up in the United States, introduced community-based gift cards in around 98 cities and towns across the state. These gift cards work the same as prepaid cards; however, these can only be used for transactions in local, independent businesses.
These are the company's unique, hyperlocal gift cards, which enable the provision of a gift that will allow the recipient to keep their money within the community. Additionally, this will also provide the users the flexibility to visit different shops and small businesses.
The company designed this gift card leveraging the technology to ensure that the card is being used in the correct location and also will not work for national chains such as Walmart, Starbucks, or Olive Garden. Notably, the company has a list of a comprehensive database of national chains, and if a user is using the gift card in one of the 98 cities and also not in a chain, the transaction will be accepted. Therefore, community gift cards are designed to incentivize people to shop locally year-round.
Gift cards are serving a new purpose in a pandemic-struck world. Various businesses around the world are using prepaid cards for families; small and medium-sized businesses have also been affected by the onset of the global pandemic. To provide support for such SMEs, specifically restaurants, businesses are launching these hyperlocal gift cards.
A recent expansion of gift card partnership took place in April 2022 between United States-based gift card provider eCard Systems and fintech Toast. Notably, in 2019, these two companies entered into a partnership for the online gift card and also to enable merchandise ordering and manufacturing services.
Toast, which provides fintech solutions for restaurants through its SaaS platform, will now be able to access eCard's digital, online as well as physical gift card transaction processing and program management. Consequently, 13,000 customers of Toast will be able to fulfill their complex gift card needs through this new integration.
Through eCard, Toast provides the restaurants with omnichannel gift card experiences such as same-day onboarding, money movement pooling reconciliation, advantageous pricing, transaction reporting, personalized support, and many more. Therefore, these two platforms together provide restaurants with customer insights, customer loyalty, feedback, multi-channel marketing campaigns, and results measured in real revenue, all in one platform.
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