Number of debit cards fell 11% year-on-year in June

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Published: August 23, 2019 2:16:48 AM

Card issuance is likely to see an uptick with the rise of several metro and smart city projects, and with payments banks and aggregators also set to introduce credit cards to a new all-digital consumer base, Worldline observed.

debit card, RBI, Jan Dhan account, Reserve Bank of India, debit card, National Payments Corporation of India, NPCI, POS, visa, master cardDebit cards continue to be used more frequently for cash withdrawals than for making digital payments, with the volume of ATM transactions made in the June quarter standing at 2,411 million — nearly double that of POS transactions.

The number of debit cards in circulation dropped over 11% between June 2018 and June 2019 to 837 million, as per data released by the Reserve Bank of India (RBI) and shared by payment service provider Worldline in a recent report. The drop in cards outstanding was a result of mass closure of zero-balance accounts, Worldline said.

“It is interesting to note that between June 2018 and June 2019, there was an addition of about 10 million credit cards and reduction of about 107 million debit cards. While the rise in credit cards may be attributed to growing digital payments and the expansion of retail borrowers in the market, the fall in debit cards could be due to the mass closure of zero-balance accounts,” it said in its India Digital Payments Report for the second quarter of 2019.

At the same time, the customer base of RuPay cards, linked to a large number of Jan Dhan accounts, is now over 600 million. In other words, the category has a 58% market share in card issuance while the combined point of sale (POS) and e-commerce transactions share in volume and value is currently at 30% and 25%, respectively, the report said, citing data from the National Payments Corporation of India (NPCI).

Card issuance is likely to see an uptick with the rise of several metro and smart city projects, and with payments banks and aggregators also set to introduce credit cards to a new all-digital consumer base, Worldline observed.

Debit cards continue to be used more frequently for cash withdrawals than for making digital payments, with the volume of ATM transactions made in the June quarter standing at 2,411 million — nearly double that of POS transactions. “Also, consumers tend to make larger ticket size purchases through credit cards at POS terminals when compared to debit cards,” the report said.

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