Home Biz Operations RISE IN THE USE OF DEBIT AND CREDIT CARDS

RISE IN THE USE OF DEBIT AND CREDIT CARDS

Independence day saw shoppers using credit and debit cards more than last year

RISE IN THE USE OF DEBIT AND CREDIT CARDS
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The Indian shopper is progressively moving towards digital payment methods. The credit and debit cards are proving to be more convenient for the shoppers as they are using them not only for big transactions but also for small transactions at grocery and apparel stores. 

While there was a sharp rise in the total volume and total value of transactions made using credit and debit cards, the average ticket size observed a dip in grocery, apparel and jewellery stores. A recent trend analysis on August 15 by Worldwide India observed a 20% rise in the number of transactions and 3% increase in the value of transactions.

According to the findings of the trend analysis credit card transactions increased by 30% in terms of volume and 13% in terms of value. Credit cards accounted for 335 of total transactions and the value transactions remained around 39%. The reason for this could be the increase in the issuance of credit cards by 8 million, an increase by 20%, between August 2018 and June 2019. The average ticket size, however, dipped this year by 15% to Rs 1,995.

Similarly, the debit card transactions increased by 15% and 2% in terms of volume and value respectively. It accounted for 67% of total transactions and the value of transactions remained around 61%, representing that debit cards were the primary mode of payment for majority people who do not wish to accumulate debt on their credit cards. However, like credit cards, the average ticket size for debit cards dipped this year by 14% to Rs 1,496.

Debit card vs Credit card transactions:

Mode

Total Volume (%)

Total Value (%)

Credit Card

30

13

Debit Card

15

2

Source: Worldwide India

As per the Reserve Bank of India data, debit and credit card payments for merchant transactions have gone up between 2016 and 2019 by more than 250%. The rise in the use of debit cards was witnessed at the time of demonetization in November 2016. Most people find digital payment methods convenient, as most merchants these days opt for PoS transactions and there is no hassle of visiting ATMs or carrying cash around with you.

With the convenience that digital payments provide, more and more Indians are moving towards cashless payments for the smallest of transactions. While the use of credit and debit cards has increased on a day-to-day basis, during festivals these transactions witness a huge spike as many people go out for shopping with their families.

Grocery stores accounted for the highest volume of transactions at 24% and value of transactions at 16%. Spends at apparel stores accounted for 12% of the total volume of transactions and 16% of the value of transactions. Likewise, jewellery story spends accounted for 2% of the total volume of transactions and 11% of the value transactions. The average ticket sizes of the three merchant categories, though, saw a dip this year by 23% to Rs 1,100 in grocery, by 7% to Rs 2,210 in apparel and by 18% to Rs 10,111.
“The overall dip in average ticket size could be likely due to a positive change in consumer behavior of using cards to pay for smaller value items and is an indication of higher uptake of digital payments,” findings specified.

Transactions across merchant category:

Merchant Category

Total Volume (%)

Total Value (%)

Ticket Size Dip (%)

Grocery Stores

24

16

23

Apparel Stores

12

16

7

Jewellery Stores

2

11

18

Source: Worldwide India

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