Competition in Indian gift card industry intensifies as Paytm launches Paytm Postcards

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Indian mobile payment platform and e-commerce company Paytm introduced gifting envelopes called Paytm Postcards on the occasion of widely celebrated festival, Raksha Bandhan. This corresponds to the gift card concept during festivals and can be customized with personal messages as well. It is also beneficial for companies who plan on giving monetary bonuses to employees on special events and occasions.

Currently, Indian gift card industry is estimated to be US$ 2.6 billion with Qwikcilver platform accounting for nearly 90% of the market. In 2015, it launched its online purchasable gift card range Woohoo which has been popular since then. There are similarities between Paytm’s gift envelope and messaging services with China based Tencent owned social media and payment platform WeChat. Gifting envelopes known as Red Packets have significantly added to increased adoption and revenue generation. Over 46 billion cash gifts were exchanged through virtual red envelopes in 2017. Last month, Hike messaging service backed by Tencent Holdings introduced “Blue Packets” in India along similar lines. In 2015, Tencent had invested USD 175 million in Hike along with Taiwan's Foxconn increasing the company value at USD 1.4 billion.

Alibaba which owns AliPay and backs Paytm, has taken the competition to a higher level in Indian market. Paytm raised US$ 1.4 billion from Soft Bank in May 2017, for 20% share in One 97 communications that operates Paytm. Alibaba and its payments affiliate Ant Financial owns 40% share in One 97 communications. It is evident that combining messaging service with payment platform is a popular trend being adopted by service providers to gain access to major customer base and source of revenue. There are anticipations of Paytm launching chat service for the platform as well by Q3/Q4 2017. Paytm might have an edge over other companies with its 250 million users. WhatsApp currently has more than 200 million users and Hike has 100 million.

To know more and gain deeper understanding of prepaid gift card industry in India, click here.