Synopsis: The number of credit cards in India doubled to 10.80 crore by December 2024 from 5.53 crore in December 2019. Debit card usage remains stable, with a marginal increase from 80.53 crore to 99.09 crore during the same period. Credit card transactions accounted for Rs 20.37 lakh crore across 447.23 crore transactions in 2024.
India's financial ecosystem witnessed a remarkable transformation in the adoption of credit cards, as highlighted in the Reserve Bank of India's (RBI) latest report.
The number of credit cards in circulation has more than doubled, soaring from 5.53 crore in December 2019 to an impressive 10.80 crore by December 2024.
This growth underlines a shift in consumer preference towards credit-based transactions in recent years.
In contrast, debit card circulation remained relatively stable, increasing from 80.53 crore in December 2019 to just over 99.09 crore in December 2024.
While debit card growth stagnated, credit card adoption surged, driven by an evolving digital payment landscape and targeted banking strategies.
Transaction Insights:
The growth in credit card circulation is paralleled by a significant rise in card transactions.
In 2024, credit card transactions reached 447.23 crore, accounting for Rs 20.37 lakh crore in value.
Debit card transactions, by comparison, were 173.90 crore, amounting to Rs 5.16 lakh crore.
This stark contrast underscores the increasing preference for credit cards, which saw a 15% year-on-year growth rate in recent years.
Sectoral Breakdown:
- Public Sector Banks (PSBs): PSBs expanded their credit card base from 122.6 lakh in 2019 to 257.61 lakh by December 2024, marking a 110% growth.
- Private Sector Banks (PVBs): With a 71% market share and 766 lakh cards issued, PVBs led the growth, driven by co-branded offerings and digital innovations.
- Foreign Banks: In contrast, foreign banks faced a decline in both card numbers and market share, dropping from 11.9% to 4.3% due to high fees and restrictive lending policies.
- Small Finance Banks (SFBs): Emerging players like SFBs issued 10.97 lakh cards by December 2024, focusing on financial inclusivity and underserved markets.
Technological Advancements and RBI Initiatives:
The RBI played a pivotal role in advancing card security and functionality:
- EMV Chip and PIN-based Cards: Mandated since January 2019, these cards enhance transaction security.
- UPI Integration with Credit Cards: The linkage of RuPay credit cards with UPI and the allowance of payments through pre-sanctioned credit lines have further boosted credit-based payments. These initiatives aim to reduce costs, enhance user experience, and promote innovative payment products.
Conclusion:
India’s credit card ecosystem has evolved significantly over the past five years, with a robust growth trajectory fuelled by strategic banking innovations and digital payment initiatives.
While credit cards gained immense traction, debit card usage has plateaued, reflecting a shift in consumer behaviour toward credit-based transactions.
The continued focus on financial inclusivity, technology adoption, and enhanced security measures positions India’s card payment system for sustained growth in the years to come.
