Data shows shift in spending pattern

NUMBERS FOR MAY SHOW THAT CREDIT CARD SPENDING AND NEW CARD ISSUANCES ARE ON THE RISE

MUMBAI: India’s credit card companies and banks are seeing a rebound in customer spending with more customers shifting towards contactless modes of payments, mirroring a global trend.

Data for May shows that credit card spending is rising and new card issuances have also increased.

In a business update earlier this month, SBI Cards said daily card spends have reached 60-65% of the levels seen prior to the lockdown, with managing director and chief executive Hardayal Prasad saying the company is witnessing pent-up demand.

“Online spends have been going up and there is a shift in payment from cash to digital. We are going to witness a significant shift in the customer behaviour. The daily spends are touching pre-Covid-19 levels and, interestingly, there is significant amount of stability in daily spends,” Prasad said.

SBI Cards added 27,000 cards in May, compared with a 250,000300,000 run-rate per month normally.

The trend towards credit cards was substantiated by a Mastercard study, which said that e-commerce and contactless payments are continuing to grow in popularity as people make the move to digital by default and reduce dependence on cash.

“A large majority in India (77%) believe the shift to contactless payments is here to stay. The shift is underway globally as almost six in 10 consumers say the move to digital payments is likely to be permanent and nearly half plan to use cash less even after the pandemic passes,” said Mastercard.