As per their “India Digital Gift Card Market” report, the market was valued at USD 9,150 Million in 2023, growing at a CAGR of about 16% during the forecast period from 2024-2032 to reach USD Million by 2032.

The information technology landscape in India has been growing exponentially, especially through the adaptation to the use of digital monetary transactions and the business of gifting solutions. It is widely used as a form of payment for either individual use during the year-end festivities or for business since it provides easy, convenient, and personalized methods of transacting. This growth is a result of the proliferation of fintech innovations, government policy, and a shift in traditional customer expectations. In this paper, an attempt is made to understand the direction in which the digital gift card market is shifting in India, from the adoption of digital payments and corporate gifting perspective.

The Growth of Digital Payments in India

There has been tremendous expansion in digital payments in the context of India through Fintech firms, Digital India, and the launching of UPI. The use of mobile phones and the internet has also enhanced cashless payments due to the enhancement of smartphone gadgets. Given the volumes of monthly transactions by UPI, digital wallets and contactless payments are no longer a novelty. Therefore, digital gift cards are becoming popular and are a convenient method of transacting in society. Additional enhanced acceptance of this sector has also been experienced through the development of the use of QR code and Near Field Communication (NFC) payment systems through which digital gift cards have also become friendly to the retail sector.

As per the Department of Financial Services, the Digital Payment Dashboard has been integrated with 118 public sector, private sector, payments, regional rural, and foreign banks. In FY 2021-22, 8,840 Crores of Digital Payment Transactions were achieved with 87.20% Current & Savings Accounts seeded with Aadhaar Numbers, and 81.05% Current & Savings Accounts seeded with Mobile Numbers.

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How Digital Payment Adoption enhances the use of Digital Gift Cards

The convexity of digital gift cards with mobile wallets and the UPI platforms has also increased the availability of gift cards. Digital cards are also preferred since they grant instant access to the cards across various categories. Presently, firms like Paytm, Google Pay, and PhonePe are improving their experience of purchasing and using gift cards through a few taps in their smartphone applications. The use of digital payments has been made secure and at the same time, the awareness of fraud checks has also gone up among the consumers. Also, existing financial, IT, and many other industries, startups are partnering with retailers to encourage the utilization of digital gift cards and offer cashback and discounts.

Corporate Gifting Culture: A Key Market Driver

Business gift-giving is not new in the corporate world, and with the advancement of technology in the modern world, digital gift cards are seen to have revolutionized the corporate world in terms of the rewards given to employees and clients. Digital gift cards are now being used as a flexible gifting solution when added to incentive programs in various companies. Unlike physical gifts which are often presented in a generic nature, a digital gift card allows the recipient to select what they would like. This change has also made gifting in organizations to be more effective by eliminating hindrances that are posed by tangible gifts. The trend is most suited for sectors such as IT, BFSI, and retail sales where the customer shows a direct attraction with their employees.

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Why Companies Prefer Digital Gift Cards for Corporate Gifting?

The corporate sector in India is demanding digital gift cards more and more as it is easy and economical to implement. Apart from the manual processing, it is easier to purchase and send in bulk gift cards rather than individually packaged ones. Also, offering digital gift cards to employees is tax advantageous to organizations for companies that offer such items among their employee benefit options. Most corporate vendors such as Amazon, Flipkart, and Pine Labs have bespoke corporate gift voucher services for organizations. Also, digital gift cards are helpful where employees work remotely, and other employees can be enabled to enjoy other organizational bonuses that come with their work and place of work.

Integration of Digital Gift Cards with Corporate Reward Programs

The situation herein shows that many firms are incorporating the use of digital gift cards in the company’s loyalty and incentives to boost the morale of their employees. Various human resource and rewards platforms are turning to gift card providers to ease the process. Companies are also employing AI analysis to monitor personnel’s choices for gifting, thus matching their concepts with the expectations among organizations. The incentive programs offered by corporates are as follows: Subscription-based gift cards for streaming services, wellness programs, and travel experiences. It not only enriches the staff bond but also assists firms in recruiting and maintaining staff during the rising talent competition.

What are the Advancements of Digital Gift Cards to the Indian Customer:

Mobile gift cards have high appeal as personal gifts in India because they come with flexibility in usage and are easy to use. Gift cards, especially during occasions like Diwali, Holi, or Rakhi, can be termed as the best form of gifts as they come with no issue of choosing physical products. There is emerging interest in using multi-brand and experience-based gift cards such as spas, eating out, and retail shopping. On the same note, electronic gift certificates can also be termed as a secure means of gifting that would reduce instances of loss or theft. The opportunity to write the desired type of message on the card is another advantage of the gift cards.

Challenges and Future Outlook

There are, however, a few imperatives; first, digital gift cards are still not very popular in Tier 2 and Tier 3 cities since it is still relatively new in the market; second, people are still anxious about the risk of cybercrime attacks. Some traditional businesses still practice the use of material gifts because they do not understand or are not versed with the online platforms. Nevertheless, these challenges have been anticipated to be reduced with the increase in fintech, enhanced support from the authorities, and features such as security. Policies for the use of blockchain technology for securing transactions and the use of Artificial Intelligence to advance personalization for the gift card will also enhance the occasion.

Conclusion

Thus, the factors influencing the growth of the digital payments sector and the changing trend of corporate gifting are impacting the digital gift card market in India. The more flexible, safe, and easy to use they are, the more they remain a favorite choice of both buyers and sellers. Considering the emerging innovations and the growing size of the fintech sector, digital gift cards shall remain an important solution for India’s further digitalization. Hence, with better awareness and new solutions, the market has a tremendous scope for even further growth, making digital gift cards a necessity for the gifting market. According to the UnivDatos, increased usage of UPI, mobile wallets, and fintech platforms, the surge in online shopping, increased spending on digital gift options, and companies offering digital gift cards as incentives and rewards are driving demand in the India Digital Gift Card market.

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