Amaten, the largest gift card exchange platform in Japan is adopting a gift card blockchain solution. Amaten is working with aelf, a blockchain technology solution provider, and the partnership could transform the gift card industry in Japan.
This development is important for the gift card industry given the challenges it faces. The move by Amaten is important for another reason too since it showcases the significant potential blockchain has in solving problems in various industries.
The gift card industry is a large one. A market research report estimates that this industry will reach $506 billion by 2025, from $318 billion in 2017. The report states that this industry will be a CAGR of 6% during this period. In Japan too, the market for gift cards is large, and reports state that it amounted to $21 billion in 2018.
Several challenges plague the gift card industry, e.g.:
- Gift cards are lucrative targets for cyber-attackers since they lack personally identifiable information.
- If you lose a gift card, it’s gone since there are not enough security features.
- Consumers often don’t get the balances locked in gift cards refunded.
- The secondary markets for gift cards aren’t effective.
Blockchain has several characteristics that can help the gift card industry. Decentralization, transparency, security, and immutable records are key features of blockchain that can help to address the above challenges. Blockchain smart contracts are transparent, tamper-proof, and they make contract administration easier.
Amaten and its gift card blockchain solution
The gift card industry can benefit from blockchain in several ways, e.g.:
- Immutability of blockchain can help eliminate the problem of fraud with gift cards.
- Ownership records of gift cards can be stored on a blockchain, and they are permanent.
- The in-built security features of blockchain can guard against cyber-attackers.
- Tokenized gift cards will provide an effective secondary market for consumers.
Given these advantages, it’s no wonder that experts predict a bright future for the blockchain technology in the gift card industry. They also believe that blockchain-powered gift cards could increase crypto adoption.
Amaten is the largest secondary marketplace for gift cards in Japan. The company has over 40% market share in Japan, with 240,000 active users. Amaten provides liquidity in a market that has traditionally lacked it, and the company reached 1 million transactions in 2018.
Amaten has partnered with aelf for rolling out the planned gift card blockchain solution. A provider of decentralized cloud computing blockchain networks, aelf will bring significant value to the table with its scalable blockchain network with sidechains and smart contract modules.
Amaten will launch its solution first in Japan. They will then expand into Korea and China, before rolling out the proposed solution in other countries.
A further boost to crypto adoption in Japan?
Japan is a bright spot so far as crypto is concerned, given the high adoption. The planned move by Amaten could further bolster crypto adoption in Japan, which is something that crypto enthusiasts will look forward to.