Summary of this article
Consumers are redeeming points like currency, merchants are leveraging them, driving business growth, and issuers are unlocking stronger engagement with highly-improved economics.
The Indian consumer’s relationship with digital payments has undergone a significant shift. Once viewed as occasional perks, rewards are now emerging as a mainstream payment instrument—a trend made especially clear during festive spending peaks.
A rewards-led payment network recently recorded platform visits twice as high as non-festive periods, 1.5 times more transactions, and a 15% increase in average customer spend.
“The deeper story lies in how this behaviour is extending well beyond festivals and becoming a durable part of everyday commerce,” says Amit Koshal, Founder and CEO, TWID, adding, “rewards are moving beyond seasonal bonuses to becoming an everyday benefit that shapes how you pay.”
Now you don’t just earn points, you seamlessly use them for payments, making rewards a part of your daily spending. This shift is powered by three key changes.
From Occasional Bonuses To Everyday Balances
Consumers now view reward points as spendable balances. Interoperable platforms make it possible to use points across categories - from booking travel to paying utility bills or shopping online.
Notably, 24 per cent of users transacted with a new brand via rewards, and GMV contributions improved 34 per cent during the festive season, highlighting cross-category adoption and the reactivation of dormant users.
Businesses Are Turning Rewards Into Strategic Levers
Businesses are increasingly designing rewards as strategic levers for consumer loyalty, engagement, and margin management. Unlike discounts, reward points enable deferred value delivery, giving issuers and merchants better control over economics while sustaining retention.
“Users redeeming rewards with their payments at merchants repeat 3x more compared to non-redeemers,” says Koshal.
Digitisation Is Embedding Rewards into Daily Payment Behaviour
Innovation and digitisation are weaving rewards into everyday payments. Rewards now shape not just where people shop, but also how they pay. Many consumers who once preferred Cash on Delivery are shifting to prepaid orders when they can pay with rewards, reducing RTOs and extending their purchasing power in daily spending.
The Takeaway: Rewards Are Becoming A Parallel System of Value
Taken together, these shifts signal a structural change in how rewards are perceived and used in India. Festive surges act as catalysts, but the core behaviour is one of everyday integration.
“Consumers are redeeming points like currency, merchants are leveraging them, driving business growth, and issuers are unlocking stronger engagement with highly-improved economics,” says Koshal.
Rewards are, thus, steadily shifting from the periphery of customer decision-making to the centre, creating a parallel value system that is shaping the future of digital commerce.
