The report notes that the credit card industry has seen significant expansion, doubling the number of credit cards issued over the past five years. This momentum is expected to continue and the market is expected to replicate this growth in the coming years, the report notes.
“He credit card market In India, the number of cards issued is expected to double by fiscal year 2028-29, reaching 200 million cards. The industry, which has seen a 100 per cent increase in cards issued over the last five years, is projected to replicate this growth in the next five financial years,” the report said.
Along with the increase in credit card issuance, the report added that the credit card industry has seen a substantial increase in transactional activity. Transaction volumes Sales revenue grew by 22 percent, while transaction values increased by 28 percent. The report attributes this growth to the introduction of new products, innovative offerings and the expansion of customer segments.
However, the report also noted a decline in Debit card Usage. Debit card transactions have declined in both volume and value, reflecting a shift in consumer preferences. In fiscal year 2023-24, debit card transaction volume declined 33 percent compared to the previous year, and debit card spending declined 18 percent year-on-year.
The report notes that “debit cards in the country have seen moderate growth in terms of the number of cards issued in the year and the volume and value of debit cards took a significant hit during FY23-24.” This decline is attributed to the growing popularity of the Unified Payments Interface (UPI), which offers ease of use and has emerged as a preferred payment method for small and medium merchants due to its zero merchant discount rate (MDR). “This decline can be attributed to the inclination towards UPI due to ease of use and small and medium merchants pushing for UPI due to 0 percent MDR,” the report stated.
Furthermore, the report mentions that debit cards have struggled to compete with credit cards in terms of rewards, which has further contributed to their decline. A lack of attractive rewards programs and less awareness of existing benefits have made debit cards less attractive to consumers.
Meanwhile, digital payments In India, trade transactions continue to thrive, with transaction volume growing 42 percent year-on-year in fiscal years 2023 and 2024. This trend is expected to triple by fiscal years 2028 and 2029.
The report noted that the continued growth of digital payments is driven by a variety of factors, including innovations by payment ecosystem participants, new business models, technological advancements and increased customer awareness.
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