According to the latest Reserve Bank of India (RBI) data, credit card spending rose 13 percent (year-on-year) to Rs 2.02 lakh crore in October.
Credit cards outstanding in the system rose 12.85 percent to 106.88 million, up 0.74 percent from September, according to central bank data.
HDFC Bank topped the chart with 241,119 credit cards issued, followed by SBI Cards with 220,265 cards and ICICI Bank with 138,541 cards.
Meanwhile, as UPI-based digital payments picked up, debit card-based transactions fell nearly 8 percent to around Rs 39,920 crore in September from around Rs 43,350 crore in August, according to RBI’s monthly data. .
On the other hand, credit card transactions in the country picked up, growing nearly 5 percent in the month of September, to Rs 1.76 lakh crore from Rs 1.68 lakh crore in August.
According to market experts, the rise in credit card spending is due to a lower base last year and the festive season as promotional schemes such as equal monthly installments increase during the festive season.
The share of digital payments increased from 14-19 percent in March 2021 to 40-48 percent in March 2024, with Unified Payments Interface (UPI) playing a key role.
UPI transactions have grown at an impressive 75% compound annual growth rate (CAGR), while UPI spending has grown at a CAGR of 68% in the period August 2019-August 2024, as card industry growth continues to accelerate.
According to a recent report by Axis Securities, the immense popularity of UPI is reflected in the transaction volume ratio which is 38.4 times the credit card transaction volume.
However, given the lower ticket size of UPI transactions, UPI-to-Credit Card spend was 0.3 times in August, which is fairly stable at current levels.