HomeBusinessRising credit cards, UPI payments indicate increase in consumption: Report

Rising credit cards, UPI payments indicate increase in consumption: Report

Rising credit cards, UPI payments indicate increase in consumption: Report

New Delhi:

Experts and market players said rising credit card and UPI payments point to an increase in consumption amid improving economic activity with the impact of the COVID pandemic.

Unified Payments Interface (UPI) transactions increased from Rs 9.83 lakh crore in April this year to Rs 10.73 lakh crore in August, according to RBI’s monthly data.

Similarly, credit card spend through POS (Point of Sale) terminals increased from Rs 29,988 crore in April this year to Rs 32,383 crore in August. Credit card spend on the e-commerce platform, which was worth Rs 51,375 crore in April, rose to Rs 55,264 crore in August.

SBI Card MD and CEO Ram Mohan Rao Amara said that as per industry data from RBI, credit card outstanding has grown at a compound annual growth rate (CAGR) of 16 per cent between FY17 and FY22.

“With the increase in the adoption and usage of credit cards, spending has also increased. Over the past few months, the industry has seen monthly credit card spends consistently crossing Rs 1 lakh crore, indicating a strong consumption pattern. With the upcoming festive season, there is hope and anticipation all around,” he said.

Experts and market players believe that the increase in the volume and value of digital transactions augurs well for the economy. It also indicates that consumers are getting familiar with different modes of digital payments and leaving their barriers.

Anand Kumar Bajaj, Founder, MD and CEO, PayNearby said that the increase in the volume and value of payments through cards and UPI paints a positive picture of the digital payments landscape in the country.

This boom, he said, shows that Indian consumers are letting go of their barriers and are more open to adopting online payments.

Bajaj said, “As consumers and merchants experience the ease and security of digital payment modes, this has led to a behavioral shift in them. This growth is aided by the increasing familiarity and convenience of e-commerce platforms where consumers can shop more online. are.” ,

The government’s push for digital transactions, rising incomes, increased use of smartphones and improved internet connectivity are aiding the growth of online payments. In addition, more and more merchants are deploying digital payment infrastructure.

According to Mandar Agashe, MD and Vice Chairman, Sarvatra Technologies, an increase in expenditure levels means a pick-up in consumption as the uncertainty induced by the pandemic is almost over and markets return to normalcy.

“July and August were primarily marked by the sales season on e-commerce platforms and various offers made available by merchants to encourage transactions through UPI. UPI is expected to pick up further during the current festive season. UPI is expected to pick up pace as there is increasing demand from Tier-II and III cities who are confidently adopting the UPI channel for their transactions,” Agashe said.

Anurag Sinha, CEO and Founder, OneCard and OneScore, said the growth in both volume and value of payments across all platforms in recent months clearly reflects the strength of the retail economy as well as the revival of consumer confidence.

Last month, the Reserve Bank of India had sought public views on fees and charges in payment systems, with an aim to make such transactions affordable as well as financially beneficial to the entities involved.

Fees in payment systems are charges levied on users (promoters or beneficiaries) by payment service providers (PSPs) for facilitating a digital transaction. The fee is collected from the promoters or beneficiaries depending on the type of payment system.

Ranen Banerjee, Partner – Economic Advisory Services, PwC India, said an increase in UPI transactions is good for the economy, but “we can’t possibly relate it directly to consumption” as there are several factors leading to more digital transactions – The primary one is the development of e-commerce.

“The rise in credit card spending and increase in debit card spending can be viewed from two lenses. One is that families are spending more or the other is that they are stressed and they are dependent on credit,” Banerjee said.

The market players further added that traditionally, the travel, entertainment and restaurant category has been one of the major categories for consumers when it comes to online spending via credit cards.

Amara said, “With the easing of travel restrictions, we have also seen an increase in travel expenses during the summer season. The expenditure in this category has now crossed the pre-Covid level.”

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Hello Friends, My Name is Raushan Kumar. I am a Part-Time Blogger and Student. I am author of https://searchnews.in . We're dedicated to providing you the best of News, with a focus on Business, Health, Lifestyle, World, Tech, India, Gadget.


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