Cobranded credit cards to form 25% of market by FY28: report
Cobranded credit cards are expected to account for about 25% of the Indian credit card market in terms of issuances by the end of FY28, growing at a compound annual growth rate of 35-40%, according to a report by fintech startup Hyperface and consultancy firm Redseer.
Currently, cobranded credit cards have a market share of 12-15%, the report has estimated. Data from the Reserve Bank of India (RBI) shows that there are around 1 million outstanding credit cards in the country.
RBI does not disclose the market share for cobranded cards.
Cobranded credit cards are ones where the bank is the issuer of the card and a different brand is the customer acquisition channel. Among the popular cobranded credit cards in the country are Flipkart and Axis Bank, Amazon and ICICI Bank, and Swiggy and HDFC Bank.
“We have seen a higher activation rate and higher spend rate on cobranded credit cards and customer engagement with large brands is getting stronger. Overall these factors are helping in faster rate of growth for these cards vis-a-vis traditional credit cards,” said RV Ramanathan, chief executive officer, Hyperface.
Hyperface runs a tech platform which enables banks and brands to offer digital first credit programmes.
The report said credit cards are emerging as the more popular payment mode for consumption expenses of Indian households. Usage of credit cards as a payment mode has doubled from 5% of total personal consumption spending in FY21 to an estimated 10% by FY24, it said.
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