Credit card spends jump 30 per cent in January
Reserve Bank of India (RBI) data showed that credit card transactions increased to Rs 1.7 lakh crore in January from Rs 1.3 lakh crore a year ago. In volume terms, the increase was 26%, to 330 million from 260 million, during this period.
E-commerce transactions and bill payments formed more than half the total transactions, the data showed. Experts said the bulk of the online purchases were by the younger generation who also enjoyed the additional credit benefit of equated monthly instalments (EMIs) and ‘buy now, pay later’ (BNPL) schemes.
Significantly, card spends as well as transactions increased despite the RBI prescribing higher risk weights on unsecured loans, including credit card outstanding.
“This is typical of any country which is moving from a savings economy to a credit or a consumption economy,” said V Balasubramanian, CEO of Financial Software and Systems, a payments technology provider. “The younger generation owns a bigger pie of the credit card ownership as well as spends. They are active buyers on e-commerce platforms.”
E-commerce platforms saw a 37% year-on-year jump in transactions in January and accounted for 65% of card spends during the month compared to transactions on point-of-sale machines, which had a less than 30% share.
“Most of the payments transactions on the Amazons of the world are through credit cards. Now we have BNPL, which is catching up. Also, there are EMI schemes which are popular among card users. All this is allowing card users to buy more and repay through
