Payment technology solution provider First Data has agreed to buy Gyft, a Silicon Valley, California-based mobile gift card company.

Gyft, which entered the $100bn gift card market in 2012, pioneered the concept of a mobile wallet for gift cards.

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Gyft is a digital platform that enables consumers to buy, send, manage and redeem gift cards using mobile devices.

The 18-person company raised $7.5m in funding prior to the acquisition, whose terms were not disclosed.

Currently, Gyft supports nearly 200 retailers, which includes Best Buy and Target. The transaction is expected to close next month pending Gyft shareholders approval.

First Data’s research shows that electronic gift card sales grew 71% from 2012 to 2013.

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Commenting on the deal, First Data president Guy Chiarello said: "Gyft, with its mobile gifting platform, and First Data, with its global scale and distribution network, together will accelerate the growth of virtual prepaid with powerful new tools for merchants of all sizes to deepen their relationships with their customers.

"This means that the same robust toolset deployed by big box retailers will be coming soon to small- to mid-sized businesses, perfectly synched with our mission to offer innovative solutions to help our clients grow," Chiarello added.