Credit card market may double by 2028-29; but debit card usage is declining, know the reason

According to a PwC report, the number of credit cards in India is likely to exceed 20 crores, growing at a 15% annual pace. According to the research, the credit card business has grown significantly over the last five years, with the number of credit cards issued more than doubling. According to the analysis, this trend is projected to continue, and the market may grow at a similar rate in the future.

The report said, "The credit card market in India is expected to double the number of cards by FY 28-29, and this figure will reach 20 crore cards. The credit card industry has seen a growth of 100 percent during the last five years. The market can double this growth within the next five financial years." The report said that apart from the issuance of credit cards, there has also been a substantial increase in the transaction activities done through them. The volume or number of transactions has increased by 22 percent, while the value of transactions has increased by 28 percent. The report attributes this growth to the introduction of new products, innovative offerings, and expansion of customer segments. However, the report also mentions a decline in the use of debit cards. Both the volume and value of debit card transactions have decreased. This reflects a change in consumer preferences. In FY23-24, transaction volumes for debit cards declined 33% over the previous year, and spending on debit cards declined 18% year-on-year.

"Debit cards in the country have witnessed slow growth in terms of card issuances. Debit card volumes and value declined significantly during FY23-24," the report said. This decline is attributed to the growing popularity of Unified Payments Interface (UPI), which is easy to use and has become the preferred payment method for small to medium merchants due to its zero merchant discount rate (MDR).