Transforming Unused Gift Cards into Cash: Nigeria’s Emerging Fintech Solution

During festive seasons in Nigeria, a peculiar challenge arises: many gift cards sent from abroad remain unused. For instance, a relative in New York might purchase an Apple Store gift card for a family member in Abuja, but since Nigeria lacks an official Apple retail presence, these cards often become worthless, gathering dust until they expire.

The Rise of a New Economic Niche in Nigeria’s Gift Card Market

Despite this, Nigeria’s gift card sector has quietly evolved into a significant economic force. Valued at approximately $2.1 billion in 2024, the gifting market is expected to reach $3 billion by 2027. Gift cards have morphed beyond their original purpose, increasingly functioning as a form of currency within the country.

Many Nigerians now prefer converting these gift cards into cash, creating demand for intermediaries known as gift card brokers. These brokers facilitate the exchange between international retailers and local consumers, adapting foreign gift cards to Nigeria’s unique market conditions.

Cardtonic: Pioneering the Conversion of Gift Cards to Cash

Founded in 2019 by Balogun Usman and Kayode Faturoti, Cardtonic initially launched as a cryptocurrency trading platform but soon pivoted to focus on gift card trading. Recognizing the widespread issue of unusable gift cards, the company developed a platform that allows users to sell their gift cards for immediate cash.

Cardtonic operates by verifying the authenticity of submitted gift cards and then selling them to trusted partners who pay cash in return. This process has made it possible for users to liquidate cards that would otherwise expire unused.

“Many Nigerians receive gift cards from brands like Nike or Adidas through relatives abroad but find no practical way to use them locally,” explains Oluwatomisin Oduyemi, Cardtonic’s growth lead. “Our founders saw this gap and created a solution to prevent these cards from going to waste.”

Streamlining Transactions: Speed and Reliability as Competitive Advantages

Cardtonic’s platform is designed for efficiency. Certain “fast cards” can be validated and cashed out within 10 minutes, while others, such as store-specific vouchers requiring manual verification, take longer. As of early 2025, the company serves over one million users, with approximately 500,000 to 600,000 active monthly participants.

Each month, Cardtonic processes around 400,000 gift cards, emphasizing rapid turnaround as a key differentiator in the market.

However, the business faces challenges such as invalid or previously redeemed cards, damaged physical cards, and fraud attempts. To mitigate these risks, Cardtonic employs a dedicated quality assurance team and enforces two-factor authentication to protect user accounts.

Economic Dynamics: Navigating Thin Margins and Currency Fluctuations

Cardtonic’s profitability hinges on buying gift cards at discounted rates and reselling them at a markup. Margins are slim and sensitive to exchange rate volatility, especially fluctuations between the Nigerian naira and the US dollar. Sudden currency shifts can quickly erode profits, forcing the company to absorb losses in some transactions.

With a workforce of about 120 employees, Cardtonic relies heavily on human oversight to validate cards, allocate trades, and resolve disputes, making it more labor-intensive than many automated fintech platforms.

Despite these complexities, Cardtonic has remained self-funded and profitable since inception, opting not to pursue external investment at this stage.

Regulatory Ambiguity: Operating in a Grey Zone

Unlike cryptocurrencies and mobile money, which are tightly regulated by Nigeria’s Central Bank, gift card trading occupies a less defined regulatory space. Cardtonic adheres to anti-money laundering protocols and seeks necessary licenses but continues to operate in a somewhat ambiguous environment.

This regulatory uncertainty offers both flexibility and risk: it allows for rapid scaling without heavy compliance costs but leaves the company vulnerable to sudden policy changes, as experienced when Cardtonic had to separate its crypto services into a distinct app following regulatory pressure.

Expanding Horizons: From Gift Cards to a Multifaceted Payment Platform

To diversify revenue streams amid growing competition, Cardtonic has expanded beyond gift card trading. The platform now offers direct gift card sales, bill payment services, virtual dollar cards, and an e-commerce marketplace called Just Gadgets.

Launched in 2024, the virtual dollar card enables Nigerians to pay for international subscriptions and online shopping. Priced competitively with a $1.50 issuance fee, it aims to be accessible to a broad user base, contrasting with pricier alternatives in the market.

However, the rise of local banks offering international payments on naira cards poses a challenge to the long-term viability of virtual dollar cards.

Just Gadgets operates as an asset-light marketplace, sourcing products from third-party vendors and partnering with logistics companies for delivery. This approach positions Cardtonic as a facilitator rather than a full-scale e-commerce retailer, helping to retain users within its ecosystem.

Engaging Youth: Marketing Through Culture and Community

Cardtonic’s primary audience consists of young Nigerians, including students and gamers attracted by the quick cash opportunities from gift card trading. The company leverages influencer partnerships, music collaborations, and event sponsorships to connect with this demographic.

Beyond marketing, Cardtonic invests in community initiatives such as the Upskill program, which offers tech training to youth, and plans for scholarships to support education. In 2025, it also launched Tonic Football Club, a grassroots project that nurtures local football talent while enhancing brand visibility.

Looking Ahead: Growth Plans and Market Challenges

Cardtonic is preparing to introduce international bill payments and eSIM services within the next quarter, alongside plans to expand into East African markets. The company also aims to launch contactless payment cards and monetize its APIs, enabling other businesses to integrate gift card trading into their platforms.

Operating in a competitive landscape with startups like Glover, Dtunes, and Cardpadi, Cardtonic’s success depends on the continued popularity of gift cards abroad and their limited accessibility in Nigeria.

While the company’s foundation lies in converting unused gift cards into cash, its ambition to evolve into a comprehensive “super app” faces stiff competition from better-funded fintech rivals. The coming years will reveal whether Cardtonic can leverage its niche to build a broader financial ecosystem.

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