Indian consumers in March generated sharply higher sales volume on fewer credit card transactions over the same period a year ago, while the number of cards in circulation fell, according to India’s central bank. The trend proves that Indian banks are succeeding in their effort to woo more upscale customers, according to one analyst.
Indian consumers in March initiated 20.4 million credit card transactions, down 1.4% from 20.7 million during the same month last year. Credit card sales volume, however, rose 35.8%, from 49.5 billion rupees (US$1.1 billion) to 67.2 billion rupees, according to data from the Reserve Bank of India. The number of credit cards in circulation fell to 18.3 million credit cards as of end of March, down 26% from 24.7 million a year earlier, the central bank says.
The strong increase in sales volume despite fewer cards underscores the dominant strategy card issuers pursued over the last one year, Mrinalini Manral, an analyst with Mumbai-based electronic payments research firm Dassler Business Intelligence, tells PaymentsSource. “Earlier, when the economy was booming between 2001 and 2008, banks issued to all segments,” she says. “But the financial crisis shocked banks to cut down on the mass segment and instead focus on the premium segment."
Manral believes the increase in credit card spending sales volume proves that banks have succeeded in driving higher card usage among upscale, heavier-spending customers while weeding out less productive cardholders.
Debit card use in March increased 32.4%, to 15.5 million transactions from 11.7 million a year ago, the central bank says. The value of those transactions increased 54.1%, to 24.2 billion rupees from 15.7 billion rupees. Indian financial institutions issued 181 million debit cards as of the end of March, up 32.1% from 137 million issued a year earlier.
