9 key findings on credit card usage in September 2021
Increased economic activity, combined with the festive season, would allow for a moderate rate of spending increase in the medium term
The banking sector reported net additions of 1,091k new credit cards in September’21 (up 110 % year-on-year), led by a dramatic resurgence in HDFC Bank which issued 2,44,000 new cards. This brings the total credit card base to 65 million (10.8 % year-over-year increase – the highest in 11 months).
Here are 9 key findings
1. According to digital payments tracker report from Motilal Oswal Financial Services Limited (MOFSL), the ICICI Bank emerges as the second-largest player in spends after HDFC Bank.
2. ICICI Bank had the strongest growth (26.1% YoY), followed by IndusInd Bank (IIB) (15.6%), SBI CARD (14.3%), and RBK (RBL Bank) (14.1%).
3. In September 201, the total number of outstanding credit cards in the system increased 10.8 % year-on-year to 65 million — the highest in 11 months.
4. Foreign players such as American Express and Citibank saw a 5-10% drop. SBI Cards and ICICI Bank continued to perform well, increasing market share by 59–218 basis points year-on-year to 19.3% /18.0%, respectively in September 2021.
5. Monthly spends per card grew to Rs 12,400 in the industry, up from an average of Rs 10,700 in the previous six months (higher than pre-covid levels). This was due to a ticket price rise to Rs 4,300, the largest in previous years.
6. IIB and Kotak Mahindra Bank (KMB) experienced the largest increases of Rs 2,400 and Rs 2,200, respectively, in monthly spends while ICICI Bank saw an increase of Rs 1,400.
7. On the other hand, the number of transactions per card decreased to 2.8 in August 2021 (3.1 in March 2021).
8 UPI continues to grow rapidly, with total payments increasing by 99% year-on-year to over Rs 6,54,000 crore in September 2021. UPI ticket sizes remained unchanged on a month-to-month basis at Rs 1,791.
9. UPI’s market share has been steadily expanding; it was at 80% during April-September 2021, up from just 9% in FY18 (73% in FY21), while debit/credit cards held an 8–10% share.
Credit card spending has been reviving in recent months. Increased economic activity, combined with the festive season, would allow for a moderate rate of spending increase in the medium term.