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The New Era of Cashless and Invisible Employee Payments and Benefits

December 5, 2022


The size of the employee benefits market in India is about 3.5 to 4 billion. This is in terms of the pay-out volume that you can do.

The number of users who can be addressed is in the order of 10 million. As an industry, about 30% of this market is addressed by the existing service providers.

When you look at employee benefits – it comprises tax-saving benefits like food coupons and meal vouchers, paid leaves, post-retirement benefits, and the likes.

For our discussion, we looked at only the non-monetary benefits like food coupons and meal vouchers.

Until 2017, employee benefits were not digitized. The cost of offering these benefits were more than the benefits itself in many cases. In Feb 2018, it was mandated in India that food vouchers can no longer be offered in the paper form.

With the change in regulations and technologies, several companies came on board to provide these benefits. It is set to grow. With digitization, the variable costs are not very high for the issuers and bans as these are re-loadable cards.

Most popular among these issuers include Sodexho and Eden Red, with Sodexho literally owning the market share in India. Popular players outside India include Sodexho, Eden Red, and Upgroup.  

Today, if you have to offer a food voucher, then you will have to do that digitally. So, whoever has to offer a food voucher, it is digitized for sure, irrespective of who the issuer is or the technology player is.

The total pay-out or issuance of food vouchers across the world is about 85% digital now. The uptake will only keep increasing. Prepaid cards, QR codes, or barcodes are the different form factors that are being used.  

The concept of invisible payments is getting bigger and bigger – similar to Netflix subscription, google subscription – it is becoming completely frictionless.

Watch this video where I am in conversation with Jagannath Panigrahi, who is an expert in the employee benefits space.

Sabapathy Narayanan

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