Market Overview
The Middle East and Africa gift cards market size witnessed significant growth in the past and is expected to grow at a CAGR of 15.3% during the forecast period (2023-2030).
Highlights
- The closed-loop card dominated the market by card type.
- B2C dominates the market by type.
- South Africa dominates the market by region.
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.
Market Dynamics
Middle East and Africa Gift Cards Market Drivers
Rising Demand for Advanced Payment Solutions
In MEA, 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.
High Adoption Rate of Smartphones
In MEA, the continuous advancement of smartphones has brought about increased innovation in gift cards. Integrating modern technology and strategic marketing approaches has given rise to new and convenient ways for gift card enthusiasts and smartphone users to combine their preferences into a user-friendly package. This convergence is expected to propel the gift card market forward, as the widespread adoption of smartphones offers customers flexible and convenient payment options.
A notable example is Gift, a highly popular solution on both iPhone and Android platforms. With gifts, users can load their gift cards into the app and utilize them while shopping, providing a seamless and streamlined experience.
Middle East and Africa Gift Cards Market Restraints
Lack of Security
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.
Middle East and Africa Gift Cards Market Opportunities
Growing Demand for Gift Cards in Developing Countries
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.
Regional Analysis
The Middle East and Africa gift cards market is segmented by country: Saudi Arabia, South Africa, UAE, the Rest of The Middle East, and Africa. South Africa dominated the market with a CAGR of 16.7% during the forecast period.
The gift card market in the Middle East and Africa (MEA) region is experiencing growth and holds significant potential. Countries like the United Arab Emirates, Saudi Arabia, South Africa, and Egypt contribute to this positive trend. The market's expansion is fueled by the adoption of digital payment solutions, a rising disposable income, and an expanding consumer base. Additionally, the thriving tourism industry and the cultural tradition of gift-giving further contribute to the growth of the gift card market in the MEA region.
Segmental Analysis
Middle East and African gift card market are segmented into card types and types.
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 19.9% 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 20.4% over the forecast period.
