US Digital Gift Card Market 2025–2034

Reports Description

As per the current market research conducted by the CMI Team, the US Digital Gift Card Market is expected to record a CAGR of 14.4% from 2023 to 2032. In 2023, the market size is projected to reach a valuation of USD 130.4 Million. By 2032, the valuation is anticipated to reach USD 438 Million.

The US Digital Gift Card market represents a dynamic sector within the retail landscape, characterized by electronic vouchers or prepaid cards redeemable for goods and services online. Shaped by industry leaders like Amazon, Apple, and Google, the market reflects a consumer shift toward e-commerce, contactless transactions, and personalized gifting experiences.

With a tech-savvy consumer base and innovative initiatives, digital gift cards offer convenience, security, and versatility. The market’s resilience during the pandemic underscores its importance in the evolving retail ecosystem, providing a seamless and tech-forward solution for gifting in the United States.

US Digital Gift Card Market Growth Factors

The US Digital Gift Card Market presents significant growth opportunities due to several factors:

• Mobile Wallet Integration: Integration with popular mobile wallets and payment apps enhances accessibility and convenience for users. This integration aligns with the rising trend of mobile payments, further driving the demand for digital gift cards in the US.

• Gift Card Incentive Programs: The implementation of gift card incentive programs by businesses fuels the US Digital Gift Card market. These programs, often tied to loyalty schemes or employee rewards, drive increased adoption as consumers appreciate the added value and flexibility offered by digital gift cards.

• Strategic Partnerships: Strategic collaborations between digital gift card providers and retailers amplify market reach. Partnerships create synergies, expanding the availability and visibility of digital gift cards across various platforms, thus attracting a broader consumer base.

• Personalization and Customization: The demand for personalized gifting experiences is shaping the market. Digital gift cards with customization options, such as personalized messages and designs, resonate well with consumers, adding a personal touch to the gifting process.

• Tech-Savvy Consumer Base: The US market benefits from a tech-savvy consumer demographic. With a high level of digital literacy and widespread smartphone usage, consumers are more inclined to adopt digital solutions like digital gift cards, further contributing to market growth and innovation.

• Blockchain Integration: Integrating blockchain technology presents an opportunity to enhance security and transparency in digital gift card transactions. This can mitigate fraud risks and instil greater trust among users, contributing to the market’s long-term sustainability.

• Sustainability Initiatives: Growing environmental awareness influences the market as sustainability becomes a key consideration. Digital gift cards, by reducing the need for physical production and delivery, align with eco-friendly practices, attracting environmentally conscious consumers and contributing to the market’s ongoing growth.

US Digital Gift Card Market – Mergers and Acquisitions

The US Digital Gift Card Market has seen several mergers and acquisitions in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the US Digital Gift Card Market include:

• In 2023, Starbucks intensified its partnerships with tech giants Apple, Microsoft, and Amazon, aiming to double its 75 million Rewards members within five years. Leveraging these collaborations, Starbucks seeks to enhance its customer engagement and loyalty programs by tapping into the vast user bases and technological ecosystems of these industry leaders.

• In 2020, PayPal officially introduced its digital gift card platform. This new initiative expands PayPal’s offerings, allowing users to conveniently purchase and send digital gift cards. The platform aims to enhance user experience and provide a seamless way for customers to engage in digital gifting.

These mergers and acquisitions have helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the US Digital Gift Card Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

US Digital Gift Card Market Significant Threats

The US Digital Gift Card Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Consumer Privacy Concerns: Growing concerns about privacy and data usage can hinder the adoption of digital gift cards. Consumers may be reluctant to share personal information, impacting the effectiveness of targeted marketing strategies and limiting the potential for personalized digital gift card offerings. Addressing these privacy concerns is crucial to maintaining consumer confidence and market growth.

• Technological Obsolescence: Rapid technological advancements may render existing digital gift card platforms obsolete. Companies face the constant challenge of staying ahead in terms of technology to meet evolving consumer expectations. Failure to adapt to emerging trends can result in a loss of relevance in the market, posing a threat to the sustainability of digital gift card offerings.

• Cybersecurity Risks: The US Digital Gift Card market faces significant threats from cybersecurity risks, including data breaches and hacking attempts. As digital transactions increase, malicious actors may target vulnerabilities, potentially compromising sensitive user information and eroding consumer trust.

• Fraudulent Activities: Various forms of fraud, such as unauthorized use, counterfeiting, or fraudulent redemptions, pose threats to the market. Fraudulent activities can lead to financial losses for both consumers and businesses, undermining the integrity of digital gift card systems.

• Regulatory Challenges: Evolving regulations and compliance requirements pose a threat to the US Digital Gift Card market. Stricter regulations may impact operations and impose additional costs on businesses, potentially hindering the growth and flexibility of digital gift card offerings.

• Economic Downturns and Consumer Spending: Economic downturns and fluctuations in consumer spending patterns represent threats to the US Digital Gift Card market. During challenging economic times, consumers may reduce discretionary spending, impacting the demand for digital gift cards and leading to a potential decline in market growth.

Report Scope

Category-Wise Insights

By Channel

• Brick and Mortar: Brick and Mortar channels in the US Digital Gift Card market refer to physical retail locations. Despite facing challenges, traditional stores integrate digital gift cards, enhancing customer experience. Trends include in-store displays for digital cards, encouraging impulse purchases, and the blending of online and offline shopping experiences.

• Digital: Digital channels involve online platforms facilitating digital gift card transactions. Dominating the US market, digital channels offer convenience and rapid delivery. Trends encompass mobile wallet integration, personalized gifting options, and collaborations between digital gift card providers and e-commerce platforms, expanding accessibility and choice.

By Application Area

• Consumer Goods: Digital gift cards in the US Consumer Goods sector offer personalized and contactless gifting options, integrating loyalty rewards, and showcasing trends like sustainable product choices and curated online shopping experiences.

• Health and Wellness: In Health and Wellness, US digital gift cards encompass fitness memberships, wellness retreats, and nutrition plans. Emerging trends include virtual wellness consultations, holistic health subscriptions, and eco-friendly wellness product options.

• Restaurants and Bars: US digital gift cards for Restaurants and Bars emphasize not only contactless dining but also virtual events, curated culinary experiences, and exclusive chef collaborations, reflecting evolving consumer preferences in the dining landscape.

• Travel and Tourism: Digital gift cards in US Travel and Tourism introduce trends such as customizable travel packages, eco-friendly travel experiences, and virtual reality-based destination previews, providing consumers with immersive and flexible travel options.

• Media and Entertainment: In Media and Entertainment, US digital gift cards extend to virtual concerts, gaming add-ons, and premium content subscriptions. Trends include exclusive artist collaborations, augmented reality gaming experiences, and personalized content curation.

• Others: The “Others” category in US digital gift cards showcases innovative trends, such as personalized charity donations, virtual reality experiences, and unique niche offerings, meeting the diverse and evolving preferences of modern consumers.

By Card Type

• Closed Loop: Closed Loop digital gift cards are restricted to a specific retailer or brand. These cards can only be used for purchases within the issuing company, fostering brand loyalty. Trends show an increased focus on personalized promotions, exclusive offers, and enhanced customer experiences, deepening consumer engagement within specific brands.

• Open Loop: Open Loop digital gift cards, often bearing major payment network logos, provide versatility as they can be used across various merchants. A growing trend involves the integration of open-loop gift cards with mobile wallets, expanding accessibility and promoting widespread adoption in the US Digital Gift Card Market.

By End User

• Retail Establishments: Digital gift cards in the US Retail sector offer consumers a convenient and personalized gifting option. Trends include integration with e-commerce platforms, ensuring seamless online shopping experiences. Customizable features, instant delivery, and promotions enhance the appeal of digital gift cards, driving their popularity in the retail segment.

• Corporate Institutions: In the US Corporate sector, businesses utilize digital gift cards for employee incentives and rewards. Trends involve integration with employee wellness programs and heightened personalization, catering to the demand for versatile and meaningful corporate gifting solutions.

Competitive Landscape – US Digital Gift Card Market

The US Digital Gift Card Market is highly competitive, with a large number of manufacturers and retailers operating. Some of the key players in the market include:

• PayPal Holdings Inc.
• Sephora USA Inc.
• Best Buy Co. Inc.
• Home Depot Inc.
• Amazon com Inc.
• Apple Inc.
• Google LLC
• Starbucks Corporation
• Netflix Inc.
• Spotify Technology S.A.
• Walmart Inc.
• Target Corporation
• eBay Inc.
• Uber Technologies Inc.
• Facebook Inc.
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

New players entering the US Digital Gift Card market, such as Gyft, Prezzee, and Yiftee, have adopted innovative strategies, leveraging advanced technologies and user-centric approaches. Meanwhile, dominant key players like Amazon, Apple, and Google maintain market leadership through established brand recognition, expansive user bases, and continuous innovation.

These market giants consistently introduce new features, partnerships, and offerings, reinforcing their dominance. Strategic collaborations and seamless integrations across diverse platforms contribute to their stronghold, influencing consumer preferences and solidifying their positions in the competitive US digital gift card landscape.

The US Digital Gift Card Market is segmented as follows:

By Channel

• Brick and Mortar
• Digital

By Application Area

• Consumer Goods
• Health and Wellness
• Restaurants and Bars
• Travel and Tourism
• Media and Entertainment
• Others

By Card Type

• Closed Loop
• Open Loop

By End User

• Retail Establishments
• Corporate Institutions