The Australian gift cards market size witnessed significant growth in the past and is expected to grow at a CAGR of 16.3% during the forecast period (2023-2030).
A gift card is like a prepaid debit card with a specific amount of money loaded onto it, which can be used for purchasing goods. These cards often come with minimum and maximum initial loading limits, such as a minimum of USD 10 and a maximum of USD 500. Typically, gift cards cover part of a purchase while the remaining expense is paid through cash, debit, or credit. Many gift cards can be registered online to minimize the risk of loss, allowing users to track their remaining balance and freeze the card if it gets lost. Gift cards offer increased security compared to cash and can be easily traced, reducing fraud risk.
The gift card market is experiencing growth due to the increasing adoption of advanced payment technologies and the growing awareness of digital payments worldwide. The widespread use of smartphones and corporate and financial institutions' acceptance of gift cards further contribute to this market expansion. However, concerns about the security of gift cards may impede market growth. Nevertheless, the rising demand for gift cards in developing countries presents promising future market opportunities.
In Australia, Gift cards share similarities with prepaid debit cards and have gained popularity among consumers for their convenience, flexibility, reliability, and security as a payment method. With consumers consistently connected to shopping platforms and utilizing various payment methods, including mobile apps, the rapid growth of digital commerce, particularly on mobile devices, presents an opportunity for merchants and issuers. They can leverage this trend to adopt more innovative and seamless payment options, utilizing new technologies to cater to their customers' needs.
The gift card market faces several security challenges that significantly restrain its growth. One prominent concern is the heightened risk of hacking and theft by malicious individuals, jeopardizing gift card security. An example of such a threat is the GiftGhostBot, discovered by Distil Networks, which targeted nearly 1,000 websites to gain unauthorized access to gift card balances, exposing vulnerabilities in the system. This incident serves as an illustration of the growing threats faced by the global gift card market.
Furthermore, certain companies like Target and Starbucks have inadvertently overlooked security vulnerabilities in their endeavor to make mobile gift card rollouts convenient and cost-effective. This oversight has resulted in instances where any shopper can utilize funds loaded onto another gift card, presenting security loopholes. These security weaknesses impede the growth of the gift card market.
In recent years, there has been a notable rise in the demand for advanced payment solutions and technological advancements in the industry. This trend has been observed globally, with countries showing untapped potential and a growing need for more efficient transactional solutions. As mobile usage and internet penetration continue to increase, the gift card market is experiencing a shift from traditional plastic cards to digital gift cards. Furthermore, the widespread adoption of smartphones and digital wallets presents promising opportunities for the gift card market in the foreseeable future.
The Australian gift card market is segmented into card type and type.
By card type, it is further segmented into open and closed-loop cards.
The closed-loop card dominated the market and is expected to register a CAGR of 19.7% over the forecast period.
By type, it is further segmented into B2B and B2C.
The B2C dominates the market and is expected to register a CAGR of 19.6% over the forecast period.
Over the past decade, this region has experienced significant market growth, primarily driven by the high demand for gift cards during festive periods and shopping seasons. The presence of emerging economies and the widespread use of smartphones contribute to the region's progress, fueled by rapid industrialization and the growing preference for cashless and convenient payment methods at stores.
Factors such as increasing internet penetration, a surge in internet-savvy individuals, and a rise in disposable income propel the gift card market in the Asia-Pacific region. Occasion-based gifting, personalized gifting, festive season gifting, and corporate gifting also significantly drive market growth.
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