Debit cards will outgrow credit cards in the next two years, according to HSBC senior manager personal banking and cards, Vivek Kudwa. "Debit cards will complement credit cards for the customer. High-end purchases will be made through credit cards," he said, "while middle and lower end purchases will be made through debit cards."
Indians' credit aversion has been reflected in the total number of credit card customers at around 5 million, said Kudwa. There is a rejection rate of 40 to 60 per cent in credit cards as well, he added.
Kudwa was speaking at a press meet in Mumbai on Monday to announce HSBC's extension of card acceptance service to MasterCard's Maestro debit card.
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MasterCard International vice president and country manager, south Asia, Sameer Vakil, said India is a relatively new market with over a million debit cards with immense potential to grow further.
"In Asia-Pacific, while credit cards took over 30 years to cross the 100 million card mark, Maestro card (MasterCard's debit card) took just eight years to cross the 120 million mark," he said.
HSBC also proposes to double its merchant customer base from the current 4,000 base by 2002 end. HSBC's manager card products, Roopam Asthana, said that the merchant services of the bank is offered currently in 13 cities. The plan is to expand its card acceptance network over the next two years. HSBC will now be able to provide acceptance of all credit, debit and charge cards of MasterCard and Visa franchise.
Asthana added that card sales volumes in the country is estimated at Rs 9,800 crore in 2001. The market is expected to grow by 25-30 per cent and 85 per cent of the volumes is from the top 12 cities.
He also added that 30 per cent of the spends are from international travellers.
HSBC currently has around 5.4 lakh credit cards and it expects to reach the six lakh mark by the year end.