Reward-based Payment App Market

Reward Based Payment App Market Outlook 2032

The global reward-based payment app market size was USD 7.26 Billion in 2023 and is expected to reach around USD 13.42 Billion in 2032, with a CAGR of 7.2% during the forecast period, 2024–2032. The growth of the market is attributed to the extensive use of mobile banking, the wide availability of different payment gateways, and the rising implementation of loyalty points offered by merchants mainly associated with online payment methods.

A reward-based payment app is a mobile payment platform that offers a range of rewards to users or customers for buying products either online or in-store. The app is primarily designed to offer customers a key platform to use their idle rewards, especially coins and loyalty points for further purchases. It is a platform through which a customer can accumulate all of their different forms of rewards received from different sources or brands and use them as a payment option for online shopping or buying goods from offline merchants.

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With the rising acceptance of rewards payment platforms across businesses, customers now can exchange these coins or loyalty points for the services provided in several sectors including restaurants, hotels, and travel. Moreover, different types of reward systems or multiple loyalty programs are increasingly implemented by banks, airlines, and commercial brands for every payment transaction made by customers using their credit cards or debit cards.

Every time a consumer makes a payment using reward offers through the app, service providers earn some percentage out of the total payment as a service charge. For brands, the app aids in building a large consumer base who prefer to return and buy products from the same brand in their next purchase.    

The COVID-19 pandemic has accelerated the expansion of the market due to a massive surge in the use of digital payment modes, impacted by consumers’ preference for online shopping and the emergence of numerous e-commerce platforms. Customers received a range of financial benefits in the form of different rewards such as cashback or heavy discount offers for buying products from online retailers.

Reward Based Payment App Market Trends, Drivers, Restraints, and Opportunities

• High penetration of the Internet and the rising number of smartphone users globally are key factors driving the market.
• The increasing emergence of numerous e-commerce platforms and the rising use of online mobile payment are expected to fuel the market during the forecast period.
• The rapid expansion of the fintech industry and the wide integration of advanced technologies for payment methods present another key driver of the market.
• Lack of awareness regarding the app especially in developing countries acts as a major challenge that can hamper the market in the coming years.  
• Rising introduction and development of new user-friendly reward-based payment apps for an easy customer experience is projected to offer lucrative growth opportunities for the market in the near future.

Scope of Reward-based Payment App Market Report

The report on the global reward-based payment app market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Reward-based Payment App Market Segment Insights

Wide implementation of loyalty points offers by several merchants drives the loyalty points segment

Based on reward type, the global reward-based payment app market is divided into cashback, discounts, gift coupons, coins, and loyalty points. The loyalty points segment accounted for a key market share in 2021 and is expected to expand at a rapid growth rate during the forecast period due to the wide implementation of loyalty points offers by several merchants including brick-and-mortar stores. Businesses mainly use loyalty point programs, as a key marketing tool to retain existing customers and attract new customers, which urges them to return to the same store or platform for their next purchase.

On the other hand, the gift coupons segment is anticipated to register a steady CAGR during the forecast period owing to rising consumers’ preference for gift coupons as they are easily exchangeable and can be used by anyone than the person who receives these coupons. Furthermore, sending gift coupons to friends, family, and relatives on several festival occasions presents a key driver of the segment.

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North America to dominate the market

In terms of regions, the global reward-based payment app market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America held a dominant market share in 2021 and is expected to dominate the market during the projected period owing to the wide acceptance of reward-based payment services across online platforms and offline stores. Moreover, the early adoption of advanced digital payment systems and the presence of key global players in the regions are other key factors boosting the regional market.

On the other hand, the market in the Asia Pacific has several potentials for rapid growth in the coming years due to the increasing use of mobile banking and other payment methods, impacted by the presence of a large pool of smartphone users in the region. However, a lack of awareness regarding using their idle rewards poses a major threat to the regional market expansion. For instance, Amit Koshal, a co-founder of an India-based reward-based payment service provider, Twid claimed that a large pool of loyalty points, which was worth nearly Rs. 16,000 crores were lying idle and consumers had no idea where and how to use their gift bonus and rewards.  
 

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Segments

The global reward-based payment app market has been segmented on the basis of

Reward Type

• Cashback
• Discounts
• Gift Coupons
• Coins
• Loyalty Points

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Cashrewards
• Checkout 51
• Coin Out, Inc. (CoinOut)
• Dosh Holdings LLC.
• Dreamplug Technologies Pvt Ltd. (CRED)
• FIVESTARS LOYALTY, INC
• Ibotta, Inc.
• Prodege, LLC
• Rakuten Group, Inc.(Rakuten Rewards)
• Shopkick, Inc.
• Twid

Competitive Landscape

Key players competing in the global reward-based payment app market are Cashrewards, Checkout 51, Coin Out, Inc. (CoinOut), Dosh Holdings LLC., Dreamplug Technologies Pvt Ltd. (CRED), FIVESTARS LOYALTY, INC, Ibotta, Inc., Prodege LLC, Rakuten Group, Inc.(Rakuten Rewards), Shopkick, Inc., Twid. Some of these players have adopted a series of business development strategies including merger and acquisition, entering into partnerships and collaboration, and rapidly developing innovative mobile payment apps to expand their consumer base and enhance their market share.

Many of these key players are in talks with giant fintech organizations such as Google Pay, Paytm, and PhonePe to expand their services and the better geographical reach of their business operations.

• On April 17, 2023, a credit card payment application, CRED announced the UPI-based peer-to-peer payments to create an elevated UPI experience for members. CRED UPI P2P can let users have access to a trusted and rewarding payment experience when they ‘pay anyone'.
• In September 2019, Twid raised USD 1.4 million in its funding round majorly led by a family-owned business of tech entrepreneur, SCV LLC. The former company secured funding from investors such as Whiteboard Capital, YourNest Fund, and Capillary Technologies.