RuPay Credit Card Demand Surpasses Visa And Mastercard In Tier II Cities
The integration of UPI has led to increased demand for Rupay credit cards in India’s Tier-2, 3, and 4 towns and cities, according to a recent consumer study by fintech platform ZET, boasting over 1.5 million financial distributors.
As per the study, in June 2022, the Reserve Bank of India (RBI) permitted individuals to link their credit cards to the United Payments Interface (UPI). This enables consumers to effortlessly utilise their credit cards for transactions.
The process involves scanning asset-light QR codes, with payments being secure and protected through UPI PIN authentication.
The report indicates that demand for Rupay credit cards saw a 37 per cent increase in the July-September period across India’s 706 small towns and cities, following a 23 per cent increase in the April-June quarter.
The top 10 cities with the highest demand for Rupay cards during the July-September quarter were Jaipur, Meerut, Surat, Nagpur, Ranchi, Raipur, Varanasi, Indore, Kanpur, and Jhansi.
In the April-June quarter, Rupay cards accounted for 29 per cent of issuances, with Mastercard and Visa at 36 per cent and 35 per cent respectively. However, in the subsequent quarter, demand for Rupay cards surpassed that of Visa and Mastercard.
Among the banks distributing Rupay cards, the most preferred were Axis Bank, HDFC Bank, and SBI.
Manish Shara, Co-Founder and CEO of ZET, highlighted, "Ever since the integration with UPI, Rupay credit cards are witnessing a rise in demand for Rupay cards across India’s Tier-2, 3 and 4 towns and cities. Almost 37 per cent of the cards issued through the platform in India’s hinterland during the July-September quarter was for Rupay cards followed by Mastercard (32 per cent) and Visa (31 pr cent). This highlights the increasing popularity of digital payments in the country that has now expanded to India’s hinterlands as well."
In June 2023, the total number of cards in circulation was 1,376 billion, reflecting a 9 per cent YoY increase. Credit cards numbered 88.68 million, debit cards 975.8 million, and prepaid cards 312.1 million, with respective YoY growth rates of 13 per cent, 6 per cent, and 18 per cent.
The top five issuers of credit cards were HDFC, SBI, ICICI, Axis, and Kotak. For debit cards, the top issuers were SBI, Bank of Baroda, Canara Bank, HDFC, and Bank of India.
Private sector banks dominated credit card issuance (70.1 per cent), while public sector banks led in debit card issuance (67.4 per cent) in the first half of 2023. The report noted a contrast in the risk appetite between private and public sector banks.
While private sector banks focused on credit card issuance, public sector banks aimed to provide accounts to a broader section of the population, including the unbanked.
In terms of transactions, the volume of card transactions in H1’23 fell by 8.9 per cent from H1’22, primarily driven by debit cards followed by prepaid cards.
Credit card transactions, used for higher value payments, saw a significant increase of 19.6 per cent compared to H1’22, reflecting their resilience to market shifts.
