When did you last took out your debit card for payment?
Since the pandemic, the more convenient Unified Payments Interface (UPI) has taken over as the preferred choice for payments by consumers, even online, and that is being reflected in the Reserve Bank of India’s data.
In July 2020, the total debit card spends stood at Rs 2.81 lakh crore, as compared to Rs 3.15 lakh crore in July 2023, reflecting a growth of 11.96 per cent.
On the other hand, UPI spends have seen a whopping growth of 428 per cent, zooming from Rs 2.90 lakh crore to Rs 15.33 lakh crore during the same period, the data revealed.
The other reason for rise in UPI spend is convenience for micro transactions, just a few clicks by the customer, mostly after aiming the scanner.
Rising transactions
In August this year, UPI transactions hit 10 billion for the first time in a month.
Monthly UPI payments in value terms are now clocking at more than Rs 15 lakh crore.
In July 2020, banks issued 852.35 million debit cards. Three years later, that number has touched 970.74 million, indicative of the flat growth trajectory.
This was also due to the Pradhan Mantri Jan Dhan Yojana (PMJDY), which gave account holders a debit card during the opening of a Basic Savings Bank Deposit Account.
Meanwhile, the use of credit cards continues to surge, reaching a record high of Rs 1.45 lakh crore in July 2023, compared to Rs 0.45 lakh crore in July 2020. This increase is likely due to more Indians choosing to put their significant expenses like travel, dining, groceries, and shopping on their credit cards to take advantage of rewards, cashback, or discounts. The growth of co-branded credit cards may have also played a role in driving this credit card usage growth.
