In Nigeria, the vibrant holiday season often comes with an unusual problem: wasted gift cards. A cousin in London might buy an Apple Store voucher and send it to a loved one in Lagos, but with no official Apple store, that card becomes little more than a shiny piece of plastic that sits unused until it expires.
This gap has quietly spawned a parallel economy. As of 2024, Nigeria’s gifting industry is worth $2.1 billion and is projected to grow to $3 billion in the next three years. Across the country, gift cards have taken on another function entirely as a form of currency.
A growing number of people prefer to sell gift cards for cash, and middlemen—gift card brokers—have stepped in to bridge the divide between foreign retailers and local realities.
Cardtonic, a Nigerian fintech startup, built its business on that simple proposition: turning unused or inaccessible gift cards into liquid money.
“The major issue was, people would get Nike or Adidas gift cards from their siblings abroad, and by the time it got to them in Nigeria, they didn’t know what to use it for. It just went to waste,” said Oluwatomisin Oduyemi, Cardtonic’s growth lead. “Our founders realised this was a problem that needed a solution.”
Building a business out of waste
Founded in 2019 by Balogun Usman and Kayode Faturoti, Cardtonic—operating under its legal setup, The Tonic Technologies—started as a cryptocurrency trading app before pivoting to gift card trading. Seeing the lack of utility around gift cards in Nigeria, the startup set out to provide a solution to curb wastage.
Cardtonic positioned itself as a reliable broker, where users could send in their gift cards, the startup validates them, and then offloads them to vetted partners who pay cash in return to take the cards.
That efficiency is central to its appeal. Some cards, known internally as “fast cards,” can be validated and cashed out within 10 minutes. Others, such as store-specific vouchers that require manual checks, take longer.
In January 2025, Cardtonic appointed Emmanuel Sohe as CEO, claiming it now serves more than one million users. Yet only around 500,000 to 600,000 of those users are considered “active”—customers who trade gift cards or use its other payment features at least once a month. The startup also claims it processes 400,000 gift cards monthly, emphasising that quick turnaround is its moat.
“Over time, we’ve been able to optimise the transaction time from when you submit your cards to when you get paid, to about 10 minutes for the fast cards,” Oduyemi said.
The business comes with plenty of risks. Some cards simply don’t work. Customers send in codes that turn out to have been used already, others submit numbers that don’t exist, and with physical cards, the digits sometimes get damaged when the surface is scratched off. These problems are so common that Cardtonic keeps a team focused only on quality checks before any payment is released.
Fraud is another part of daily life in this market. Scammers pose as company staff, try to hack into user accounts, or trick people into handing over their codes. And once a gift card code is stolen or redeemed elsewhere, the value is gone for good.
“Whenever you’re dealing with digital assets, there will always be an issue of authenticity,” said Oduyemi.
To reduce the risks, Cardtonic requires two-factor authentication on accounts and regularly warns customers to keep their cards secure. The startup has also been pushing product education, telling users not to share their cards among friends to prevent theft.
The economics of arbitrage
Cardtonic’s business runs on thin margins and constant balancing. At its core, the company buys gift cards at a discount and resells them to partners at a mark-up. Profit depends on volume and the spread between buy and sell rates. But those spreads are tied to exchange rates and demand cycles, which makes them unpredictable. A sharp swing in the naira-dollar rate can turn what looked like a profitable trade into a loss.
“Some specific gift card trades might not be the most profitable for us,” Oduyemi admitted. “If the rate fluctuates between when a user sends in a card and when it is approved, sometimes we still have to make up the difference.”
That fragility explains why the company relies heavily on human oversight—the company employs about 120 employees. Cardtonic needs staff to vet cards, assign trades to the right partners, and handle disputes in cases when gift cards fail the validity check. This makes the business labour-intensive than typical payment fintech platforms, which depend on automation.
“There are many things that cannot just run on autopilot,” Oduyemi said, contrasting the model with crypto platforms where blockchain finality locks transactions instantly.
Yet Cardtonic claims the numbers add up. The company has been self-funded from the start and says it has been profitable for years, though it declined to disclose revenue. It also has no immediate plans to raise external capital.
“We’re not looking to raise because we have not seen a very strong reason to,” Oduyemi said. “We’re profitable, sustainable and conservative to a good extent. [Raising external funding] is not top of mind.”
That stance reflects the nature of the business: cash comes in with every trade, and growth remains a function of expanding transaction volume rather than burning money on scale. But it also suggests limits; without fresh capital, Cardtonic’s expansion into new markets and new verticals will likely remain measured rather than aggressive.
Gift card trading falls on no man’s land
What complicates the picture is regulation. While crypto and mobile money are closely monitored by Nigeria’s Central Bank, gift card trading falls into a less defined space.
Cardtonic says it complies with anti-money laundering (AML) measures and is pursuing licences where required, but the business still exists in a grey area; one foot in fintech, another in an informal global trade.
This lack of clarity could be both a blessing and a vulnerability. On one hand, it allows the company to scale without the burden of heavy compliance costs. On the other, it leaves Cardtonic exposed to sudden regulatory shifts, much like the clampdowns that forced it to spin off its early crypto product into a separate app.
From gift cards to “super app”
As competition in gift card trading intensified, Cardtonic sought to broaden its offerings. Today, the app also sells gift cards directly, processes bill payments, issues virtual dollar cards, and runs an e-commerce gadget marketplace. The startup calls itself an “all-in-one payments app,” with gift card trading and dollar card streams providing the bulk of its revenue.
The most significant of its newer products is the virtual dollar card, which it launched this year to enable Nigerians to pay for international subscriptions and e-commerce purchases.
Cardtonic charges a card creation fee of $1.5—cheaper than some other dollar cards in the market—and cross-border charges on non-USD transactions as usage increases. Oduyemi said the pricing move was deliberate.
“What’s the point of releasing a card that is pricey and only a few people can access? Then what solution are you solving?” she asked rhetorically, referring to Cardtonic’s virtual dollar card product.
Yet, with legacy banks now enabling international payments on local naira cards, it throws the sustainability of virtual dollar cards into question.
Cardtonic’s other services remain secondary. Bill payments, for example, rely on licenced partners rather than in-house infrastructure. Just Gadgets, Cardtonic’s asset-light gadget marketplace, functions more as an add-on to the core business. The platform sources inventory from third-party vendors while Cardtonic handles delivery through logistics partners. With this move, the fintech startup plays the connector role, rather than a full-scale e-commerce business, in hopes of keeping users in its ecosystem.
The startup did not share specific revenue figures for Just Gadgets, but acknowledged it is the smallest contributor to its earnings.
Marketing to the streets
Cardtonic’s customer base skews toward young people. Many of them are students, gamers, or “hustlers” in their 20s, drawn to the speed and flexibility of earning from flipping gift cards. To reach them, the company leans heavily on influencer marketing and music culture. It has partnered with artists and skit makers, and even sponsors concerts.
“Our users are typically young people. They are street smart. They listen to certain types of artists, and that’s why we focus more on long-term partnerships in music and entertainment,” Oduyemi explained.
The company has also tried to root itself in the community in other ways. It runs an Upskill programme to train young people in tech skills, and says it is working on a scholarship scheme to support students who might otherwise be unable to continue their education. In May, it also launched Tonic Football Club, a grassroots project that taps into Nigerians’ deep love of football while offering a pipeline for finding local talent.
Together, these projects double as brand building and community outreach. They help Cardtonic remain visible in a crowded fintech space where trust and recognition are everything, but they also highlight the tension in its identity: part formal financial services provider, part youth culture operator.
Cardtonic’s outlook
Cardtonic is launching international bill payments and eSIMs by next quarter, while also eyeing expansion into East Africa. It also wants to introduce contactless cards as part of its push into everyday payments. On the business-serving side, Cardtonic plans to monetise its application programming interfaces (APIs), making it possible for other businesses to offer gift card trading directly into their own services out of the box.
Cardtonic is built on arbitrage; converting the value of global gift cards into local cash in a market where it competes with other startups such as Glover, Dtunes, and Cardpadi.
As long as gift cards remain popular abroad and inaccessible at home, that model has room to grow. Yet, the poser on whether Cardtonic can anchor a super app, in a market crowded with better-capitalised fintech competitors, is another question entirely.
For now, it thrives in the same space it began: taking wasted tokens of goodwill and turning them into usable money. What comes next will test whether that foundation can support something bigger.
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