- Credit and charge cards now account for an overwhelming 75.7% of total card payment values in 2023.
MUMBAI: The Indian credit and charge card payments market is anticipated to experience robust growth of 15.5 per cent in 2024, reaching a value of Rs22.3 trillion (approximately $270.4 billion).
The forecast, provided by GlobalData, reflects a significant shift in consumer preferences towards non-cash payment methods, driven by increasing financial literacy and the convenience associated with electronic payment options.
Recent years have marked a notable transition in the Indian payment landscape.
According to GlobalData, the value of credit and charge card payments surged by 48.1 per cent in 2022 and maintained a growth trajectory with a 27.8 per cent increase in 2023, culminating in an impressive market value of Rs19.3 trillion ($234.1 billion).
Analysts attribute this growth to a combination of rising consumer spending and expanding acceptance of digital payment methods, facilitated by government initiatives aimed at enhancing the country’s payment infrastructure.
Cash payments wane
Ravi Sharma, the Lead Banking and Payments Analyst at GlobalData, emphasises that while cash payments held sway in India for decades, their dominance has waned. Credit and charge cards now account for an overwhelming 75.7 per cent of total card payment values in 2023, indicating a shift in consumer preference.
The growing frequency of credit and charge card transactions, which stood at 35.9 times per year in 2023, is expected to increase to 37.6 transactions by 2028, highlighting the advantages these cards offer, such as rewards, discounts, and flexible installment payment options.
E-commerce: A key driver
E-commerce has emerged as a significant driver of this growth, with credit and charge cards preferred for online purchases, accounting for 15.4 per cent of the total e-commerce transaction value in 2023.
The expanding e-commerce sector dovetails with consumer demand for flexible payment methods, as retail banks offer varying options, including converting large purchases into manageable installments, further boosting card usage.
The Indian government has played a crucial role in promoting credit card usage and refining payment infrastructure. Initiatives such as the Payments Infrastructure Development Fund (PIDF), launched by the Reserve Bank of India in January 2021, aim to expand the availability of point-of-sale (POS) devices and increase merchant adoption of QR code payments.
By November 2023, significant progress had been made, with nearly 828,000 POS terminals and 27.2 million QR code acceptance points deployed, supporting the growth of electronic payments in cities across India.
