India’s credit card expenditure in October 2023 set a new record, reaching an unprecedented high of Rs 1.8 trillion, marking a significant year-over-year growth of 38.3%. This remarkable increase can be attributed to various factors, including the festive season, which revitalized markets that had been quiet for months. This period saw a surge in spending, benefiting businesses with substantial profits.
- Overall Growth in Credit Card Spending: The overall credit card expenditure in India for October surged by 38.3% year-over-year, reaching Rs 1.8 trillion. This growth is the highest recorded in the past nine months, with a month-on-month increase of 25.4%.
- E-Commerce Platform Transactions: Transactions on e-commerce platforms using credit cards saw a 30% increase, amounting to Rs 1.2 trillion. Additionally, credit card usage at Point of Sale (POS) terminals rose by 16%, totaling Rs 57,774 crore.
- Average Expenditure and Online Shopping Trends: On average, each credit card transaction in October amounted to Rs 18,898, marking a 16% increase. Approximately 65% of credit card users opted for online shopping, with a significant portion of these transactions attributed to online ticket booking. The introduction of no-cost EMI (Equated Monthly Installment) facilities has further encouraged the use of credit cards.
- Leading Credit Card Providers: SBI Card led the market with a 42% increase in transactions, exceeding Rs 35,000 crore. ICICI Bank and Axis Bank cards saw a 35% increase in transactions, while HDFC Bank credit cards witnessed a 17% increase. The period also saw a rise in the use of City cards, with most purchases involving electronics, home products, and clothing. The total number of credit cards in use also increased to 9.47 crores.
Implications
- Economic Indicators: This surge in credit card spending is a positive indicator of economic recovery post-pandemic, reflecting increased consumer confidence and spending capacity.
- Digital India Initiative: The data aligns with India’s ongoing digital transformation, highlighting the increasing reliance on digital payment solutions.
- Banking Sector Growth: The rise in credit card transactions underscores the growing importance of the banking sector in India’s financial landscape, especially in consumer finance.
The record-setting credit card spending in India in October 2023 underscores the dynamic nature of the country’s economy and the pivotal role of digital finance. It highlights the increasing consumer confidence and the pivotal role of the banking sector in facilitating this growth. This trend is expected to continue, given the ongoing push towards digital transactions and financial inclusivity in the country.