debit-cum-credit-cards-india

Credit Card Business set for Big Take Off in India

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Credit Cards Spend in India is an evolving industry with >50mn base (~32mn unique customer base), >INR1tn loan outstanding (~1.2% of system credit) and 3% spends/GDP. Over the previous decade, while credit card spends posted ~25% CAGR, growth in the card base has lagged and remains low at ~32mn of unique customer base. Rapid proliferation of e-commerce, improving POS infrastructure and demonetisation were key inflection points for the credit card business.

Penetration of Credit Cards by CIBIL Score
CIBIL has 550 mn records (individuals plus businesses), of which the unique credit card customer base is mere 32mn — sub 6% penetration in credit cards. Moreover,

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300% Spike in Cashless Transactions During Rs 500 / 1000 Demonetisation Drive of 2016

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The Narendra Modi led government Demonetized highest value currency notes of Rs 1,000 and Rs 500 in November 2016. India primarily being a Cash Economy of which 50% is the parallel Black Money Economy, suffered during demonetization as their was total chaos on the availability of cash. Citizens had to rely on their Debit Cards or Credit Cards to transact at Point of Sale [POS].

We have obtained data from RBI and presenting the same here. We are only considering the Point of Sale Transactions for this study as this is actual transaction on Sale of Goods / Services. The following Chart

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Why Consumers Spend More in Cashless Transactions ?

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consumer-spending-indiaAcademic research indicates that digital mediums (credit/debit cards, digital wallets, etc.,) do not have cash outflow vividness, and hence reduce the pain of payment during a transaction in comparison to cash. As pain of payment reduces, spending propensity increases. Also, when using these mediums, people are more likely to underestimate or forget the amount spent on recent purchases; the lack of saliency for these mediums leads buyers to believe that they have more liquidity than they actually do, and this increases the purchasing probability of additional products (even non-essential ones).

Research also indicates that

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Demonetization Effect – New Payment Platforms Grows

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india-payment-platformsWith the boldest move in the History of India, The Demonetisation of Rs 500 and Rs 1,000, the nation continues to see a gradual shift towards newer payment platforms which should help India move towards a less cash economy. Higher tax compliance as well as lower costs have the potential to accelerate this change, especially post demonetization, but we would watch the pace of change for a few more quarters.

With 200,000 ATMs and 1.4 million POS machines, Indian banks seem to getting an unexpected benefit coming through demonetization as the bulk of 711 million debit cards and

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Credit / Debit Card Acceptance on Rise as Indian Banks Push POS Terminals

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Credit card POS Terminals Rise in IndiaIndians are increasingly spending Plastic Money – using Credit / Debit cards as RBIs favorable regulations has helped develop the Eco-system for Banks & Consumers as well. For Banks, Credit Cards has become a profitable portfolio and thus the race began with private banks beginning to be the end points for sale [POS] transaction which helps them keep the 1.65% Merchant Discount Rate they charge to the business establishment.

HDFC Bank began the race for establishing POS terminals and it has reached a whopping 245,842. ICICI Bank has also made a strong

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Central Bank of India to Launch – Debit Cum Credit Card

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CBI - Debit Cum Credit CardState owned Central Bank of India has embarked on an innovative product for Indian Consumers – Debit Cum Credit Card which will be launched very shortly according to the management of the bank in a release to CardBhai. The Card will automatically act as a Credit Card when Customer’s Bank account Runs out of Funds which is linked to the Debit Card.

S Das Gupta GM of Cards Division told,

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