Gift card market to grow by $1.33t by 2029

It is driven by e-commerce growth.

The global gift card market is expected to grow by $1.33t from 2025 to 2029, according to Technavio.

The market will expand at a CAGR of over 15.4%, driven by e-commerce growth and the rising popularity of open-loop gift cards.

The report said that gift cards have become a preferred payment method across retail, restaurants, and online stores. Millennials and Gen Z favor digital gift cards over physical ones, boosting demand. The shift toward cashless transactions, loyalty programs, and digital payments is accelerating market growth. Businesses are using gift cards as marketing tools, incentives, and customer engagement strategies.

FinTech and PayTech companies, along with mobile wallets, are driving digital gift card adoption.

Consumers are also increasingly choosing open-loop gift cards over closed-loop ones. Open-loop cards, backed by Visa, Mastercard, and American Express, offer more flexibility and broader acceptance.

The Digital India initiative and the rise of e-commerce are further fueling digital gift card usage. Retailers and financial platforms are forming strategic partnerships to enhance customer engagement.

Moreover, e-gifting, tax-advantage gift cards, and M-commerce are also expanding the market. Virtual and mobile gift cards are becoming popular due to their customization and eco-friendly appeal.

Despite their benefits, gift cards have some challenges. Expiry dates can lead to unused funds, and physical cards can be lost. Remaining balances may go unspent, resulting in financial waste.

To address these issues, businesses are promoting digital gift cards and introducing reminders for expiration dates.