P2P Gifting: Seizing the Virtual Gifting Opportunity
Report Summary
P2P Gifting: Seizing the Virtual Gifting Opportunity
Gift cards have displaced cash and checks in many gift-related P2P transactions over the past 10 years, but virtual gifting is primed to be the next method of P2P gifting.
Boston, December 6, 2010 – A new report from Aite Group analyzes person-to-person (P2P) gifting in the United States, United Kingdom, and Australia, and sizes the opportunity for electronic and virtual P2P gifting to displace paper-based methods of P2P gifting. Based on an August 2010 Aite Group survey of 3,190 consumers in the United States, Australia, and United Kingdom, the report outlines gift card providers’ prospects for increasing market share of P2P payments.
Cash will still account for nearly half of the dollar volume for gift-related P2P payments in 2010, but only 35% of the transaction volume. This year, half of all Americans will give a gift card instead of cash. Overall, the number of gift card transactions will exceed 1.25 billion.
Over the past 10 years, gift cards have displaced cash and checks in many gift-related P2P transactions. During the next five years, Aite Group believes that virtual P2P gifting will make significant inroads, further displacing cash and checks. The dollar volume of virtual gift cards will grow from less than a half-billion dollars in 2010 to nearly US$10 billion in 2015. As a payment method for P2P gifting, PayPal and similar services will increase more than fivefold, growing at 40% per year through 2015.
“Although electronic and virtual P2P gifting providers would love to replace all paper-based payment methods, that is not going to happen in the short term,” says Ron Shevlin, senior analyst with Aite Group and author of this report. “There are, however, customer segments that are ripe for migration to virtual gifting solutions—these segments, in aggregate, represent US$25 to US$30 billion in paper-based P2P gifting.”
The report references the following vendors that are emerging to service the virtual P2P gifting space: Blackhawk Network, Cashstar, Chase Paymentech, Comdata SVS, First Data, Giftango, Giiv, Heartland Payment Systems, Incomm, Lottay, Mocapay, ModoPayments, PayPal X, Swagg, and Transaction Wireless.
This 38-page Impact Report contains 15 figures and 21 tables. Clients of Aite Group's Retail Banking service can download the report.