The number of credit cards in India is projected to reach 200 million by FY28-29, driven by a compound annual growth rate (CAGR) of 15%, according to a report by PwC. Over the past five years, the credit card industry has experienced a 100% increase in the number of cards issued, with expectations of similar growth in the coming years.
The report also highlights a significant surge in credit card transactional activity, with volumes and values rising by 22% and 28%, respectively. The introduction of new products, expansion of customer segments, and innovative offerings have been identified as key contributors to this growth.
Debit card transactions fall
In contrast, the report noted a decline in debit card transactions, with both volume and value dropping by 33% and 18%, respectively, in FY23-24. While the issuance of debit cards has seen modest annual growth, their usage has significantly decreased. This decline is largely attributed to the rising popularity of the Unified Payments Interface (UPI), which offers seamless transactions and has become the preferred payment method for small and medium-sized merchants due to its zero Merchant Discount Rate (MDR).
Additionally, debit cards have struggled to compete with credit cards in terms of rewards, with lower customer awareness and less attractive reward programs contributing to their reduced appeal.
Despite the decline in debit card usage, digital payments in India continue to flourish, with transactional volumes increasing by 42% annually in FY23-24. This trend is expected to quadruple by FY28-29, driven by new business models, technological advancements, growing customer awareness, and innovations within the payment ecosystem.
