With UPI payments rapidly gaining ground in India as businesses, big and small, adapt to the technology, it is not surprising that India ranks among the top three countries globally in terms of digital payments.
However, recent data from the Reserve Bank of India (RBI) has pointed at another major behavioural change emerging in India: the usage of credit cards has gone up tremendously, surpassing debit card usage in the last one year, Economic Times reported.
The data shows that India, which was primarily a country that used debit cards, is increasingly using credit cards.
India recorded 25 crore credit card-based merchant payments in April 2023, overtaking debit card payments which stood at 22 crore. The total transaction value of credit cards also stood some distance ahead, clocking in at Rs 1.3 lakh crore against 53,000 crore for debit cards.
Data further showed that credit card usage has increased by 20 per cent while debit card swipes have dropped by 31 per cent.
India currently has 8.5 crore credit card users, a jump from 7.5 crore a year ago.
Companies, too, have started capitalise on the change to benefit from the situation: already, Myntra and Paytm launched co-branded credit cards in partnership with major banks like Kotak Mahindra Bank and the State Bank of India (SBI). There is a probability of more apps joining hands with banks to give such offers to consumers.
However, there are risks associated with credit cards when it comes to repayment of the credit you have utilised. RBI data shows that along with the jump in usage, the amount that needs to be repaid by credit card users has also increased by 35 per cent.