AI-Powered gift cards transform holiday consumer behaviour

By Vriti Gothi

As FinTech companies navigate a cautious economic climate, opportunities for growth may emerge from an unexpected source this holiday season: stored value. Recent research from Blackhawk Network (BHN) highlights a notable shift in consumer behaviour, showing that gift cards are no longer merely convenient presents they are becoming essential tools for both budgeting and payments. This trend has significant implications for FinTechs, particularly those operating in digital payments, wallets, and loyalty ecosystems.

The research shows that consumers are increasingly prioritising practicality when it comes to holiday spending. Physical gifts, while still relevant, are gradually taking a backseat. Gift cards are expected to account for 39% of holiday budgets, marking a 12% increase from last year. This uptick is driven by consumers seeking effective ways to manage costs while maintaining the tradition of giving. In essence, gift cards serve as a practical bridge between consumer spending restraint and the desire to participate in holiday gifting rituals.

Digital adoption is a key factor in this evolution. While physical gift cards remain widely used, digital gift cards are experiencing strong growth. BHN’s research indicates that four in five Americans purchased gift cards in the past year, with 78% opting for physical cards and 47% choosing digital versions. Moreover, more consumers plan to buy eGifts in 2025 than in the previous year, signalling a steady rise in digital adoption. For FinTechs, this presents an opportunity to integrate stored value into digital ecosystems, offering seamless experiences within digital wallets, apps, and loyalty programs.

Artificial intelligence is also reshaping the gift card experience, further reinforcing FinTech relevance. AI tools help consumers discover the best deals, generate creative gift ideas, and select cards tailored to each recipient. For example, Giftcards.com’s AI search bar allows users to navigate an extensive range of gift card options efficiently. Younger consumers, particularly Gen Z and Millennials, are leading this trend, with nearly 70% using AI-driven tools to optimise gifting decisions. FinTechs can leverage this behavioural insight to enhance personalisation, improve engagement, and offer AI-powered recommendations for stored value products.

Beyond gifting, stored value is increasingly intersecting with the broader financial ecosystem. Consumers are using gift cards alongside loyalty programs, cashback apps, and digital wallets, highlighting opportunities for embedded value exchange. FinTechs can position stored value as more than just a seasonal tool; it can function as a budgeting aid, a loyalty driver, and a payout mechanism across both consumer and enterprise applications. This evolution creates potential for long-term engagement, encouraging repeated interactions and enhancing customer lifetime value.

The structural shift toward stored value also has implications for payments innovation. FinTechs can harness the trend to expand their digital offerings, integrating gift cards into mobile wallets, point-of-sale solutions, and AI-powered personalization tools. By doing so, they can create holistic financial experiences that resonate with modern consumers who value flexibility, convenience, and choice.