Are Gift Cards the Future of Cross-Border Payments?

Published on May 21, 2025
Updated on May 21, 2025

Grace Young

Cross-border payments have long been the lifeblood of global commerce and personal remittances. Traditionally dominated by banks, wire transfers, and remittance companies like Western Union and MoneyGram, these payment systems are often plagued by inefficiencies—high fees, long processing times, and regulatory barriers. But as the digital world evolves, an unexpected contender is gaining traction in the international payment scene: gift cards.

Whether it’s a prepaid Visa card or a digital Amazon voucher, gift cards are no longer just festive gifts—they’re becoming an increasingly popular way to send money across borders. But can gift cards challenge or even replace traditional cross-border payment systems? Let’s explore this evolving landscape.

Understanding Cross-Border Payments Today

Cross-border payments involve transferring money from a sender in one country to a recipient in another. They’re essential for international trade, family remittances, freelance payments, and online shopping. While crucial, the infrastructure supporting cross-border payments is often outdated and costly.

Challenges with Traditional Payment Methods

Traditional cross-border payment methods face high fees, slow processing times, and limited accessibility, especially in underserved regions.

High Fees: Banks and remittance services often charge a percentage-based fee plus a flat fee, which can be substantial.

Slow Processing Times: Depending on the countries and institutions involved, transfers can take anywhere from a few days to a week.

Limited Accessibility: People in rural or underbanked regions often lack access to bank accounts, making it difficult to receive funds.

Currency Conversion: Unfavorable exchange rates further eat into the funds received.

Enter Digital Alternatives

With the rise of digital technology, solutions like cryptocurrencies, mobile wallets, and gift cards are beginning to reshape how we think about international money transfers. Gift cards, in particular, offer a simple, fast, and often more affordable way to send funds across borders.

What Are Gift Cards and How Do They Work for Cross-Border Payments?

Gift cards are prepaid payment instruments that can be used to purchase goods and services. They come in various forms:

Prepaid Visa/MasterCard gift cards: Can be used almost anywhere that accepts card payments.

Retailer-Specific Cards: These include Amazon, Flipkart, Apple, or Walmart gift cards, redeemable only with those specific retailers.

In a cross-border context, someone in the U.S. might buy an Amazon India gift card online and email it to a relative in India. The recipient can then use the card to shop online, pay bills, or convert it into local currency through third-party services.

The Pros of Using Gift Cards for Cross-Border Payments

Gift cards are emerging as a compelling alternative for cross-border payments, offering benefits such as lower fees, faster transactions, improved accessibility, enhanced security, and ease of use for global users:

1. Lower Fees: One of the most significant advantages of using gift cards for international transfers is the cost. Traditional services can charge hefty fees (sometimes up to 10% or more of the transfer amount), while most digital gift cards have no additional fees beyond the face value.

Example:

Sending $100 via Western Union may incur a $10-$15 fee, whereas sending a $100 Amazon gift card only costs $100.

2. Faster Transactions: Virtual gift cards can be delivered instantly via email or text. Compared to the 2-5 business days many banks require, this immediacy can be a game-changer for emergencies or time-sensitive needs.

3. Accessibility for the Unbanked: Roughly 1.4 billion adults globally remain unbanked. Gift cards can bridge this gap by offering people financial access without a bank account.

This is especially valuable in developing nations with low bank penetration, but smartphone and internet access are growing rapidly.

4. Security and Privacy: Sending a gift card does not require sensitive financial information like account numbers or SWIFT codes. This minimizes the risk of fraud, identity theft, or phishing attacks.

Many gift cards also have added layers of security, such as PIN protection and limited usage options, making them safer than traditional cash transfers.

5. Ease of Use: Sending a gift card is simple. Most major retailers and platforms allow users to select the card, input an amount, and send it via email within minutes. There’s no need to navigate banking systems or complex remittance portals.

The Cons of Using Gift Cards for Cross-Border Payments

Despite their advantages, using gift cards for cross-border payments has drawbacks, such as limited redemption options, exchange rate issues, potential fraud risks, and transaction limits, that may hinder widespread adoption.

1. Limited Redemption Options: Not all gift cards are usable everywhere. A Walmart gift card may be useless outside the U.S., while Flipkart cards are limited to India. The card holds little value if the recipient doesn’t have access to the specific retailer.

2. Currency Conversion and Exchange Rate Issues: Some gift cards are priced in different currencies, which could lead to unfavorable exchange rates or lost value during conversion. Furthermore, the card’s value may fluctuate if not redeemed immediately.

3. Fraud and Scams: While gift cards can be secure, they’re also a favorite tool for scammers. Fake websites, phishing emails, and counterfeit cards can trap the unaware. It’s crucial to purchase and send gift cards only through reputable and verified platforms.

4. Transaction Limits: Gift cards often have maximum value limits, usually around $500 per card. Multiple cards may be needed for larger transfers, which can be cumbersome and subject to more regulatory scrutiny.

Are Gift Cards Ready to Replace Traditional Cross-Border Payment Methods?

While gift cards present a compelling alternative, they’ll likely not completely replace traditional cross-border payment systems, at least not immediately.

Key Drivers for Adoption:

Digital Literacy: Gift card adoption could grow as more people become comfortable with digital tools.
Retail Expansion: Global brands like Amazon, Google, and Apple are expanding their gift card reach across borders.
Cost Sensitivity: In regions where cost is a significant concern, gift cards’ low fee structure is appealing.

Barriers to Adoption:

Regulatory Restrictions: Financial authorities in some countries restrict or monitor prepaid instruments for money laundering risks.

Merchant Availability: Not all countries can access global retailers that accept these gift cards.

Customer Support and Refunds: Unlike banks, resolving issues related to gift cards (lost, stolen, or undelivered) can be more complex.

Nonetheless, gift cards could fill a significant niche as a complementary solution, especially for small transfers, e-commerce gifting, or supporting family and friends abroad.

How Will Technological Advancements Shape the Future of Gift Cards in Cross-Border Payments?

The future of gift cards is closely tied to broader fintech and digital currency developments.

Blockchain Integration

Gift cards issued on blockchain platforms can be tracked, verified, and even traded across borders with more transparency and lower risk of fraud. Tokenized gift cards also allow for easier resale or peer-to-peer transfers.

Digital Wallets

Digital wallets like Apple Pay, Google Pay, and Paytm increasingly support gift card integration. This could make redemption seamless for users globally and boost the utility of gift cards beyond one-time purchases.

Cryptocurrency Partnerships

Some platforms are experimenting with crypto-funded gift cards, allowing users to convert Bitcoin or Ethereum into gift card balances. This hybrid approach may pave the way for decentralized cross-border transfers using mainstream retail infrastructures.

Alternatives to Gift Cards in Cross-Border Payments

While gift cards are promising, they’re not the only game in town. Other emerging solutions include:

Cryptocurrencies: Decentralized, fast, and borderless—but still volatile and subject to regulatory concerns.

Mobile Wallets: Platforms like M-Pesa, Venmo (limited globally), and Paytm offer convenient transfer methods.

Peer-to-Peer Apps: Services like Wise (formerly TransferWise), Revolut, and Remitly offer better exchange rates and lower fees for bank-to-bank transfers.

Comparison

Feature	Gift Cards	Crypto	Mobile Wallets	Traditional Services
Cost	Low to none	Low (varies)	Moderate	High
Speed	Instant	Instant	Fast	Slow
Accessibility	High	Medium	High (region-dependent)	Low
Flexibility	Low (limited usage)	High	Medium	High

Conclusion

Gift cards are no longer just for birthdays and holidays—they’re emerging as a practical, low-cost alternative for cross-border payments. With lower fees, instant delivery, and broader accessibility, they can offer a compelling solution, particularly for micro-transfers and unbanked populations.

However, their limited redemption options, currency issues, and fraud risks mean they are unlikely to replace traditional cross-border payment methods fully soon. Instead, they’ll serve as one piece of a rapidly evolving global financial puzzle.

Beem lets you send money instantly and effortlessly—even to unbanked recipients. Whether it’s a last-minute bill or a friend in need, Beem’s fast and user-friendly platform has you covered. Thanks to Send Now, Pay Later™, you can make payments on time—even if your wallet isn’t.

As digital innovation disrupts financial services, gift cards—especially when integrated with blockchain, digital wallets, and crypto—could become a core component of the cross-border payment ecosystem. The key lies in enhancing usability, expanding retailer reach, and ensuring secure, seamless experiences for senders and recipients.

So, are gift cards the future of cross-border payments?

Perhaps not the future, but certainly, a future worth watching.