Data shows Indians prefer credit over debit for high-value transactions

The average ticket size (ATS) for all cards in the first half of 2024 was Rs 2629, a 2% increase from the first half of 2023.

In June 2024, India saw a significant increase in the number of credit, debit, and prepaid cards, reaching a total of 1.451 billion cards—an 11 per cent jump from the previous year, according to the India Digital Payments report for the first half of 2024 (January to June) by payment technology service provider Worldline.

Breakdown of Cards

Among the total cards:

1. Credit cards: 103.8 million (up 26% from January 2023)
2. Debit cards: 979.71 million (up 4%)
3. Prepaid cards: 367.5 million (up 32%)

Private sector banks, like HDFC and ICICI, issued 71% of all credit cards, while public sector banks, such as SBI and Bank of Baroda, led the charge with 65 per cent of debit cards. This shows a trend where private banks are more willing to take risks with credit, while public banks focus on serving a wider population, including those without bank accounts.

 

Transaction Trends

In the first half of 2024, card transactions totaled 3.735 billion, which is a 3% increase compared to the same period last year. However, there were mixed results for different card types:

• Credit card transactions: Rose significantly to 2.04 billion (up 32%).
• Debit card transactions: Dropped to 0.92 billion, down 33% from 1.379 billion.
• Prepaid card transactions: Increased to 0.77 billion, an 8% rise.

The total value of card transactions also surged to Rs 13.49 trillion, marking a 21% increase. The driving force was credit cards, which saw a whopping 37% rise in transaction value, reaching Rs 10.62 trillion.

Average Spending

The average amount spent per transaction (known as the Average Ticket Size or ATS) also changed:

Overall ATS: Rs 2,629 (up 2%).

Credit cards:

The ATS for credit cards rose to Rs 5,190 compared to Rs 4,992 in the first half of 2023. This represents a 4% increase. 

Prepaid Cards:

For prepaid cards, the ATS increased to Rs 357 from Rs 325 in the same period last year, marking a 10% rise.

Debit Cards:

Debit cards saw an ATS of Rs 2,830, up from Rs 2,303 in the first half of 2023, which translates to a substantial 23% increase. However, it’s important to note that this increase in average spending per transaction is primarily attributed to a decline in the overall number of debit card transactions. As fewer transactions occurred, the total spending value didn't drop as much, thus raising the average ticket size.

POS Terminal Transactions

Transactions through Point of Sale (POS) terminals reached 2.16 billion, a 7% increase year-over-year. Credit card use at POS saw an increase of 30%, while debit card usage fell by 30%. 

Prepaid cards, however, surged by 82%, although this spike is partly due to changes in reporting methods.

The value of these POS transactions also grew to Rs 5.395 trillion, with credit card values rising 21% to Rs 3.58 trillion. Debit card values, in contrast, fell to Rs 1.75 trillion (down 18%).

Overall, the data shows a clear shift in how consumers are using cards in India, with credit cards becoming increasingly popular, especially for higher-value transactions. 

"The use of credit cards has grown, reflecting its stronghold in high-value transactions, while debit card volumes have seen a steady decline, reflecting UPI’s dominance," noted the report.