Etsy has done quite well this year: its community has already racked up $500 million in total sales over the past 8 months, and its internal payment system (direct checkout) has already processed $50M on its own since launching back in February. Continuing this push towards internal transactions, Etsy is now announcing that gift cards will launch this October, just in time for the holiday season.

Update: The cards are now available. Head to etsy.com/giftcards to grab one today, or learn more via Etsy’s blog.

According to the announcement, side-wide gift cards have long been a requested feature, and so, as long as this need remains today, there’s no doubt it will help boost sales. Best of all, individual stores will likely help market the gift cards directly to their customers, which means word will spread fast.

As far as how gift cards will actually work, there are a few requirements: You must purchase one using a US credit card, and the gift cards only work with stores that have direct checkout enabled (aka not Paypal). Undoubtedly, this move will serve to drive user adoption of Etsy’s internal payment system, and as an added incentive, Etsy is offering its direct checkout service to stores sans credit card processing fees from now through September 30.

 Etsy to launch gift cards in October, powered by its direct checkout payment system (updated)

If you’re left wondering why Etsy decided to announce this new feature a month ahead of time, it’s probably because the company hopes to grow its current list of 100k shops that support direct checkout.

Seeing as this shopping community has nearly surpassed last year’s total sales ($525 million) in 2/3 time, it’s clear that Etsy is feeling success in 2012. Head here if you’re a seller looking to integrate direct checkout.

Featured image by nikoretro