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India's credit card market is projected to reach 200 million cards in five years, with a 15% CAGR. Transaction volumes grew by 22%, and values surged by 28%, indicating a shift to credit-based spending.
India’s credit card market is on track for unprecedented growth, with projections estimating the number of cards to hit 200 million over the next five years. This sharp rise is propelled by a compound annual growth rate (CAGR) of 15%, according to a report by PwC. The country’s digital payments ecosystem is evolving rapidly, and this surge in credit card adoption underscores the ongoing shift in consumer behaviour towards credit-based spending and digital transactions.
The credit card market’s growth is not just in card numbers but also in transactional activity. The PwC report reveals a 22% increase in transaction volumes and a 28% jump in transaction values over the past year. This growth is attributed to new products, innovative offerings by banks, and expanding customer segments. HDFC Bank continues to lead the market, followed closely by SBI Card, ICICI Bank, and Axis Bank, with the total number of credit cards reaching 101 million as of March 2024.
Interestingly, India ranks 8th globally in terms of active credit cards, boasting 120 million active cards. This milestone highlights the nation's increasing appetite for credit-based solutions.
While credit cards thrive, debit card usage is declining. Transaction volumes for debit cards dropped by 33%, with spending decreasing by 18%. This shift can be largely attributed to the growing popularity of the Unified Payments Interface (UPI). UPI’s ease of use, coupled with zero Merchant Discount Rate (MDR), has made it the preferred choice for smaller, everyday transactions, leading to a gradual decline in debit card usage.
The digital payments landscape in India is thriving. Transactional volumes grew by an impressive 42% year-on-year in FY23-24, and this trend shows no signs of slowing down. Analysts predict that by FY28-29, the digital payments ecosystem will triple in size, further solidifying India’s position as a global leader in the digital payments sector.
India’s credit card market is set to double in the next five years, driven by a robust CAGR, changing consumer preferences, and a thriving digital payments ecosystem. As the industry continues to evolve, the future of credit card adoption looks promising, positioning India as a global leader in the digital finance space.
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