BENGALURU: India is ready to the touch 1 billion in debit cards. It used to be an insignificant 84 million a decade again. Even 4 years in the past, it used to be lower than half of what it is nowadays. This extra special growth is as a result of governments' consistent push against rural financial inclusion, with schemes corresponding to MNREGA, opening of Jan Dhan accounts, and direct benefit transfers (DBT).
The RuPay cards, which include all Jan Dhan accounts and more and more with other accounts too, have performed a unique role in the debit card surge. Sources advised TOI there at the moment are 560 million RuPay cards. These cards were introduced in 2012, but there may be been a surge in them in recent years. Two years in the past, the quantity used to be lower than half at 230 million.
Even utilization of debit cards has surged. Both the quantity and value of transactions have greater by way of 100% over the last 5 years. In August, debit cards were used for 1.16 billion transactions price Rs 3.24 trillion, in comparison to 579 million transactions price Rs 1.6 billion in August 2013.
Bankers say Jan Dhan account holders are savvy. A Okay Sahu, GM - debit cards, Canara Bank, says customers come to their office challenging their benefits underneath more than a few bank account schemes.
"They know they must keep their ATM PIN a secret. They know the account comes with pension plan, personal accident insurance of Rs 30,000, life insurance of Rs 1 lakh, and overdraft facility. The formalisation of the economy, and government schemes have ensured that most citizens are comfortable with debit card usage," he says.
Increasingly, the debit cards are being used now not only for cash withdrawal from ATMs, but in addition for merchant transactions. Five years in the past, ATM transactions formed 90% of debit card utilization in quantity and 95% in worth. Today, PoS (point-of-sale) and e-commerce form 31% of general transactions, and 15% of the price of transactions.
"We've seen our rural customers do e-commerce transactions to take advantage of festival offers on Flipkart, Amazon," says RA Sankara Narayanan, MD, Vijaya Bank.
Changing DBT disbursal patterns are also encouraging debit card utilization. Where earlier a bank's trade correspondent (BCs) would go in person to a village to disburse the Rs 2,000 monthly pension for senior citizens, widows and the disabled, nowadays many beneficiaries of state and Central executive schemes are seeing direct account switch.
Bankers say that in city areas, the federal government determination to waive MDR (merchant cut price price) fees for debit card purchases below Rs 2,000 has in reality helped debit card utilization in shopping. "Earlier, supermarkets and clothing stores did not like to swipe debit cards for purchases below Rs 200. They would warn the customer they'd charge an extra 2-3%. Now, with the MDR waived, we are seeing a surge in small-ticket purchases with debit cards," says Sanjeev Moghe, head, cards and merchant obtaining trade, Axis Bank.
Urban India additionally values comfort. "A majority of our customers pay their utility bills, mobile or DTH bills using their debit card. Of the total number of non-ATM debit card transactions, I'd say about 50% today goes towards online payments, including e-commerce, and 50% towards PoS machines at stores," says Moghe.
Another sturdy pull for debit card is the variety of cashbacks, discounts and particular offers that come with its utilization for activities like dining, shopping, and reserving flight tickets. Proving specifically widespread is the EMI choice all the way through check-out for acquire of high-end electronics on e-commerce websites.
"The consumption story in the country has been aided by the fact that today customers are also able to make big ticket item purchases through offers even on debit cards. Availability of finance for say durables purchase through EMI on debit cards is a big driver," says Parag Rao, country head - cards and merchant obtaining trade, HDFC Bank.
The RuPay cards, which include all Jan Dhan accounts and more and more with other accounts too, have performed a unique role in the debit card surge. Sources advised TOI there at the moment are 560 million RuPay cards. These cards were introduced in 2012, but there may be been a surge in them in recent years. Two years in the past, the quantity used to be lower than half at 230 million.
Even utilization of debit cards has surged. Both the quantity and value of transactions have greater by way of 100% over the last 5 years. In August, debit cards were used for 1.16 billion transactions price Rs 3.24 trillion, in comparison to 579 million transactions price Rs 1.6 billion in August 2013.
Bankers say Jan Dhan account holders are savvy. A Okay Sahu, GM - debit cards, Canara Bank, says customers come to their office challenging their benefits underneath more than a few bank account schemes.
"They know they must keep their ATM PIN a secret. They know the account comes with pension plan, personal accident insurance of Rs 30,000, life insurance of Rs 1 lakh, and overdraft facility. The formalisation of the economy, and government schemes have ensured that most citizens are comfortable with debit card usage," he says.
Increasingly, the debit cards are being used now not only for cash withdrawal from ATMs, but in addition for merchant transactions. Five years in the past, ATM transactions formed 90% of debit card utilization in quantity and 95% in worth. Today, PoS (point-of-sale) and e-commerce form 31% of general transactions, and 15% of the price of transactions.
"We've seen our rural customers do e-commerce transactions to take advantage of festival offers on Flipkart, Amazon," says RA Sankara Narayanan, MD, Vijaya Bank.
Changing DBT disbursal patterns are also encouraging debit card utilization. Where earlier a bank's trade correspondent (BCs) would go in person to a village to disburse the Rs 2,000 monthly pension for senior citizens, widows and the disabled, nowadays many beneficiaries of state and Central executive schemes are seeing direct account switch.
Bankers say that in city areas, the federal government determination to waive MDR (merchant cut price price) fees for debit card purchases below Rs 2,000 has in reality helped debit card utilization in shopping. "Earlier, supermarkets and clothing stores did not like to swipe debit cards for purchases below Rs 200. They would warn the customer they'd charge an extra 2-3%. Now, with the MDR waived, we are seeing a surge in small-ticket purchases with debit cards," says Sanjeev Moghe, head, cards and merchant obtaining trade, Axis Bank.
Urban India additionally values comfort. "A majority of our customers pay their utility bills, mobile or DTH bills using their debit card. Of the total number of non-ATM debit card transactions, I'd say about 50% today goes towards online payments, including e-commerce, and 50% towards PoS machines at stores," says Moghe.
Another sturdy pull for debit card is the variety of cashbacks, discounts and particular offers that come with its utilization for activities like dining, shopping, and reserving flight tickets. Proving specifically widespread is the EMI choice all the way through check-out for acquire of high-end electronics on e-commerce websites.
"The consumption story in the country has been aided by the fact that today customers are also able to make big ticket item purchases through offers even on debit cards. Availability of finance for say durables purchase through EMI on debit cards is a big driver," says Parag Rao, country head - cards and merchant obtaining trade, HDFC Bank.
India to have 1 billion debit cards soon
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Reviewed by Kailash
on
November 04, 2018
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