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 Indian digital gift card market is rapidly growing due to factors like an increase in digital transactions, corporate gift vouchers, and advanced technology adoption by fintech players born in India. E-gift cards are gaining popularity among consumers and businesses because they protect consumers’ money and SS7 is private about the consumers. It is older than, already having more digital transactions going on, the brands and the retailers are introducing many digital gift cards, thus becoming a popular part of the Indian payment systems. Among more recent trends, it is possible to refer to QR solutions, UPI gift cards, and AI-focused personalization.

Fintech Innovations Driving Growth

Today, India has one of the highest numbers of digital gift cards because companies have started using them in mobile wallets, UPI, or e-commerce applications. The major players are Paytm, PhonePe, and Google Pay, which provide technologies that make buying, sending, and redeeming of gift cards a simple process. The use of blockchain technology is advancing the safety levels of clients and minimizing fraud chances, as well as guaranteeing efficiency in transactions. Also, the companies in the fintech space are coming up with recommendations of gift cards to offer depending on a user’s favorite.

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Corporate Gifting Boom in India

The increase in corporate gifting requirements for employees and in business motivation has promulgated the corporate gifting industry where digital gift cards were most popular. Now, businesses are employing them to award employees, holiday bonuses, and clients, and it solves logistical issues. Currently, there are many gifting platforms available like Amazon, Flipkart, Gregg’s, Pine Labs, and many more which provide corporate gifting solutions alone. Also, HR technology solutions are now offering the use of digital gift cards in the program of engaging their employees, and they have become one of the most significant components of contemporary motivation.

The Increase in the Adoption of Contactless and QR codes as Part of Gift Cards.

The use of contactless payments is increasing in India and as a result, there is a growing use of QR code-based gift cards. Although gift cards have been in use for a long time, retailers and fintech firms are now allowing users to scan and pass the gift cards at the checkout points, reducing manual entry. This trend is especially true in young consumers as well as urban shoppers who expect an easy and quick interface. It is also being used in the same manner for marketing as companies are sending branded digital gift cards through social media and email. The expansion in small and medium enterprises as well as the offline shops' acceptance of QR codes for payments are also contributing to the growth.

UPI-Linked Gift Cards Transforming the Market

India being a market that has massively adopted the UPI method of payment, gift card providers are reportedly adopting payment platforms through which to make transactions. The use of UPI-associated wallets provides consumers with an opportunity to buy and use e-gift vouchers without the need to rely on bank instruments. This has extended the marketplace to the Tier II and Tier III cities where the adoption of digital payments is increasing. In addition, government policies aimed at boosting a cashless economy have contributed to the development of digital gifting solutions, making it easier for the market to penetrate widely.

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AI and Data Analytics Enhancing User Experience

Nowadays, the impact of artificial intelligence onboard and data analysis processes in determining the developing Indian digital gift card market is still growing. Today, there is also a high use of instances where companies use artificial intelligence to recommend appropriate gifts based on the profile of the user, as well as his/her purchase history. Another area where predictive analysis is also being used is in comprehending patterns of giving and when to introduce new seasonal promotions. In the retail industry and e-commerce, businesses are employing artificial solutions to loyalty programs, by offering gift cards as a part of value management. This trend is expected to change as organizations progress in their use of proper strategies on how to reach their customers.

Challenges in the Digital Gift Card Market

However, the growth rate of this industry in India has certain threats like – cybersecurity, no awareness among customers in rural areas, and hesitation of conventional traders. The problems of fraudulent transactions and the unauthorized use of digital gift cards persist today, which means that the companies have to allocate more money on their protection. However, digital literacy remains low in semi-urban and rural areas, making it difficult to go mainstream, efforts to increase usage therefore should include educational and publicity crusades. Effective interventions for these challenges will go a long way in ensuring the long-term sustainability of growth in the sector.

The Future of Digital Gift Cards in India

It is safe to say that the future of digital gift cards in India is bright and will have sustainable growth as there have been drastic improvements in fintech, AI, and payment technology. Every year new products like the subscription-based gift card, the gifting of experience, and cross-border solutions are expected to be introduced in the market by various companies. The decision to develop further activities targeting offline retailers and small businesses will contribute to the penetration of the market even more. The increase in the number of consumers who are looking for digital-first solutions has driven the Indian market of digital gift cards even stronger and is expected to remain firm in the future, making it one of the most important pillars of the digital economy of the country.

Conclusion

The market for gift cards is rising steadily in India due to technological advancements in the company’s finances and people’s shift to digital payments. With the help of AI, QR-based solutions, and linking to UPI, gift cards continue to evolve, which makes them more convenient for consumers. Nevertheless, the current factors that contribute to the advancement in technology and better security results will continue pushing the market forward. With the increasing level of technological advancement in the gifting business and customers, India is expected to be among the world’s fastest-growing in digital gift cards. According to the UnivDatos analysis, 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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