Tap or Swipe: Just get your cards right

We are a few months into a new decade, which made us look back to the last 19 years of banking. To get deep insights into the data we studied everything around debit and credit cards from April 2011 to Jan 2020, thanks to RBI’s public data releases.

A plethora of things have changed since 2011, we have seen the rise of plastic money, change in the behavior of banking users, the rise of payment banks, NPA’s and all sorts of other issues.

When it comes to a debit card market State Bank of India is far ahead of everyone else in the segment. Debit card transactions have grown substantially over the last decade and surprisingly payment banks like Paytm were able to surpass all other known players and become the bank that has the second-most outstanding debit cards.

Active Debit Card

Number of Debit Card Transaction

Amount of Debit Card Transaction

Indians have changed their behavior when it comes to the use of credit cards; the rise of non-conventional micro-lending platforms is an indication of that. HDFC has been a decade long leader in this segment, SBI and ICICI  are trying to catch up with HDFC, but still, there is a lot of ground to cover for them to become a leader in this segment.

Active Credit Card

Number of Credit Card Transaction

Amount of Credit Card Transaction

But this was in retrospect, looking forward to the current pandemic crisis and WHO guidelines, people are preferring contactless payments or digital payments. So even though the credit card and debit card market is growing, banks need innovation to keep up with the fierce competition in online transfers and mobile payments. We have seen innovation around virtual cards that can be accessed from your payment apps, and the number of contactless cards and terminals is growing at a decent pace.

We estimate that banks will open up to adopt virtual cards and online payments as the key mode of payments across all channels. This could shape up by active collaboration with payment fintech or by leveraging the Bank’s own strength to grow their existing market of credit and debit cards. If this works out, the future will look ‘PINK’ and we will see more taps and fewer swipes in the future!!!

Download our detailed WinSights report on the Indian card payment Industry 2020 to get complete insights about what happened in the debit card and credit card segment in the last decade and what trends you should look out for.

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