Debit and credit card transaction volumes in India are rapidly increasing despite a large portion of unbanked consumers.
From Bank Credit News:
Though more than 40 percent of India’s urban population remains unbanked, recent data from the Reserve Bank of India showed an increase in the volume of payment card transactions and the number of cards in circulation.
The number of credit cards increased 6.8 percent year-over-year to 18.9 million, and transaction volume increased 27 percent year-over-year to 105.6 million.
Additionally, the number of debit cards rose 19.2 percent to 314 million, though the data correlates with bank account openings rather than demand for debit cards. Debit card volume increase by nearly 50 percent year-over-year.
The data indicate existing card users are driving the significant growth in transaction volume. What immediately then comes to mind is the impression that the unbanked population is stuffing cash under their mattresses. But a portion of the unbanked population could be using alternative forms of payment such as prepaid cards and mobile payments. The rising trends in prepaid and mobile payments are bridging what was once a significant gap between the unbanked and those with credit or debit cards, namely, security and traditional banking services such as online purchases and bill-pay ability.
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