Payment technology provider First Data is moving into the virtual prepaid space by acquiring Gyft.

Gyft is a digital platform that lets consumers buy, send, manage and redeem gift cards using mobile devices. Gyft is integrated with Facebook so users can send gift cards to their friends around special events.

The planned merger is intended to improve the gift card experience for both customers and retailers, First Data said in a Wednesday press release. Financial terms of the deal, which is expected to close in August, were not disclosed.

"As a part of First Data's suite of innovation-powered products, Gyft will be added to a portfolio of technology-driven gift solutions that link advanced consumer-engagement technology with point-of-sale business solutions," said Vinny Lingham, co-founder and chief executive officer of Gyft, in the release.

This deal would allow more than 300 of First Data's national retail prepaid clients access to this new gift card distribution channel.

First Data research revealed that electronic gift card sales increased 71% from 2012 to 2013. Furthermore, the company said virtual and mobile cards are gaining share in the $100 billion gift card market.

"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," said Guy Chiarello, president of First Data, in the press release. "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."