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Over last few years, the gifts cards market has been shaping up as a well-defined niche industry with strong growth. During the last five years the global gift card market has recorded a CAGR of 9.3%, increasing from US$ 258 billion in 2014 to reach US$ 368 billion in 2018. Over the last 4-6 quarters, the segment has emerged as a payment tool with increased adoption by Gen Z and younger millennials.

According to PayNXT360’s Global Gift Card Survey (Q1 2019), retailers are using gift cards to achieve higher sales and customer base across B2B and B2C consumer segments. One of the key emerging trends is increased focus on M&A across the gift card value chain. Based on inputs gathered from 867 respondents, it is expected that industry is heading for a wave of consolidation. Below are examples of some of the key M&As in the industry

Stored Value Solutions, a leading gift card processing and program management acquired Buyatab, a Vancouver based leader in online gift card services in Feb 2019. The acquisition is expected to solidify Stored Value Solution’s industry positioning by enhancing their capabilities to make the purchasing and receiving of digital gift cards as compelling as a physical one.

LaSalle Capital’s acquisition of National Gift Card Corporation in July FY 2018 is another important move in this space. National Gift Card Corporation is a provider of gift cards in the B2B regards, loyalty and incentive market. Founded in 2004, NGC services more than 450 international and domestic clients in the retail, restaurant and prepaid segment. Some of the big clients include Amazon, iTunes, Starbucks and Target. NGI’s scalable application provides operational aspects to connect with retailer’s processors, eGift card activation and their delivery through custom branded mails. It is expected that its extended customer network and real-time digital gift card solutions will enhance La Salle’s portfolio.

Demand for gift cards and prepaid cards has recorded strong growth in India, a trend expected to continue over the forecast period. Low gift card penetration along with huge population base makes India one of the most lucrative markets globally.

According to PayNXT360, Indian gift card market in terms of transaction value is expected to record a CAGR of 17.5% during 2019-2023 to reach US$ 8.8 billion by 2023, increasing from US$ 4.6 billion in 2019.

In 2018, the main players in the Indian gift card industry, Qwikcilver and Gift Cards India, were acquired by bigger overseas companies. Qwikcilver, a Bengaluru based gifting solutions company was acquired by Pine Labs, a Singapore based provider of Point-Of-Sale software, for a staggering US$ 110 million. Qwikcilver’s client network paired with its brand intensive software-as-a-service (SaaS) is expected to enhance the gift card portfolio of Pine Labs. Before the acquisition, Qwikcilver had a gross transaction value of around US$ 1.5 billion after combining operations in India, Middle-East and South East Asia. The acquisition of Qwikcilver was a strategy to scale up the operations of Pine Perks, Pine Lab’s home-grown gift card division which was started four years ago.

Another major acquisition in this sector was of Mumbai based GCI Network, a prepaid product distributor in India serving more than 250 brands in May 2018 by Swych. Swych is a US based mobile app that provides first hand gift cards, promotional offers, discounts and the option to swap gift cards. The acquisition of GCI will give Swych access to a strong network of merchants which will expand Swych’s global network in the South-Asian gifting and loyalty segment.

To know more and gain deeper understanding of gift card industry globally, click here.

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