In this article, we will check the main differences between gift cards and wallets.
Gift cards are mainly used for giving gifts. Soon they became the main and considered way to give someone freedom of choice. Gift cards are often given as gifts for special events such as birthdays and anniversaries.
They are primarily used in domains or sectors such as retail stores, restaurants, entertainment, as well as for charitable donations.
Magento 2 gift cards can be easily generated and sold as vouchers similar to regular products.
Statista reports show that the market value of gift cards has grown exponentially and is poised to reach a value of US$510 billion by 2025.
Moving on, now let’s get to know digital wallets.
Wallets can be called applications that are developed for websites, smartphones or electronic devices that simulate a physical wallet in terms of loading money and storing other essential information.
With a simple tap, e-wallets can be used for payments and purchases. It also includes technologies such as NFC (Near Field Communication) for contactless payments.
Wallets can also be used to store information such as coupons, tickets, digital IDs, boarding passes, etc. Some examples of digital wallets are Apple Pay, Google Wallet and Samsung Pay which are used worldwide.
Wallets can also be used to make partial payments in case there is not enough money in them, then a secondary payment can be combined with them to pay for a purchase.
So using Magento 2 Wallet Extension allows users to process their payments using the wallet amount at checkout.
According to a recent report by Gminsights, the mobile wallet market share from the technology companies segment that includes Apple, Google and Samsung is expected to grow at a CAGR of 18% between 2023 and 2032.
Along with gift cards and wallets, rewards points are also a great way to incentivize customers and can be used to pay for purchases. They can be earned and then redeemed at the checkout accordingly.
Also, if you are looking for a reward points module for your store, then you can check out the Magento 2 Reward Points extension.
Differences between gift cards and wallets
Now that we have some knowledge about gift cards and digital wallets, let’s check out some of the key differences that differentiate them from each other.
Using:
Gift cards can be used in physical and digital form. Usually, physical cards are made of plastic or gift cards are delivered electronically.
On the other hand, digital wallets, as their name suggests, are purely software applications made for smartphones or other smart devices.
Adaptability:
Because they have a limited use, gift cards are mostly limited to certain stores or brands.
However, digital wallets or e-wallets offer a wider range of uses and can be used across a variety of stores, brands and platforms that accept a particular wallet service, offering better customization.
Management and monitoring:
Tracking balances and checking spending history can be a big challenge with gift cards unless the gift card issuer provides online tools. This can lead to lost or forgotten funds.
Since digital wallets are software-based, they can provide real-time metrics such as balance, spending or transaction history, etc. This is effective in helping the user manage their budget and make informed financial decisions.
Validity:
Gift cards usually have an expiration date associated with them. This means that the prepaid amount becomes invalid after the expiry date.
The main limitation associated with digital wallets is the availability of participating merchants with a particular wallet.
Source of funds:
Gift cards are prepaid and cannot be linked to any bank account as they are locked to a certain amount.
Also, if you want a source of funding for a cause, you can also check out the Magento 2 Crowd Funding extension.
Digital wallets can be linked to bank account(s). Thus, it enables the direct transfer of funds from the bank account to the wallet. It can then be used for payments later.
Both gift cards and wallets are paving the way for the future of payment.
Gift cards offer great gift giving appeal. Digital wallets are strengthened by their financial management capabilities and offer flexibility and security.
It is worth noting that technology is always evolving. So there is plenty left to offer in both gift cards and digital wallets in the future.
