The number of debit cards in India has increased to 1 billion from 84 million a decade ago, Times of India has reported. The number of debit cards as well as the value of transactions have more than doubled in the last five years.
Last August, debit cards were used for 1.16 billion transactions worth Rs 3.24 trillion as compared to 579 million transactions worth Rs 1.6 billion in August of 2013.
These findings mark a great success for Indian government’s ‘Digital India’ mission as well as push to cashless transactions. The government has launched several initiatives like Jan Dhan Yojana, Direct Benefit Transfer (DBT), MDR waiver, BHIM Application etc for its laudable goal of financial inclusion.
Government’s push to RuPay cards which come with all Jan Dhan accounts have played a significant role in the increase. The number of RuPay cards have doubled in the last two years, currently numbering 560 million.
Debit Cards are also increasingly being used, not just for cash withdrawal from ATMs, but also for merchant transactions. Five years ago, ATM transactions constituted 90% of the total number and 95% of the total value. Currently, PoS transactions have expanded to cover 30% of the total number and 10% of the total value of debit card transactions.
While urban customers value convenience as well as various advantages like cashbacks, discounts and special offers on digital payments, rural consumers are not far behind.
“We’ve seen our rural customers do e-commerce transactions to take advantage of festival offers on Amazon or Flipkart,” says RA Sankara Narayanan, MD, Vijaya Bank, as quoted by TOI.
The rural consumers are also increasingly becoming tech savvy, demanding information on benefits of various government schemes, said AK Sahu, GM-debit cards, Canara Bank.
The online consumption patterns are also changing with customers carrying out big ticket purchases. “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, durable purchase through EMI on debit cards is a big driver,” says Parag Rao, country head- card and merchant acquiring business, HDFC Bank.