The number of debit cards in India is falling and has hit a two-year low. Having come strikingly close to the 1-billion mark a year ago, the debit card figure never breached the milestone and is on a decline ever since. India had 843 million debit cards at the end of October, which is now down by 15% from a year ago, according to RBI data. The fall in the number of debit cards in India is intriguing as it was knocking on the one-billion mark in November 2018 at 998 million. The UPI effect and rising digital wallet usage in the Indian market are said to be potential reasons behind the fall in the number of functional debit cards.
“Between September 2018 and September 2019, there was an addition of about 11 million credit cards and reduction of about 154 million debit cards,” Worldline said in its recent report on India’s digital payments scenario. While the rise in credit card usage may be attributed to the growing digital payments, the fall in debit cards is likely due to the discontinuation of magnetic stripe and the mass closure of accounts with zero balances, the report further added.
The Reserve Bank of India’s major push towards Digital India has resulted in a rise of online payments and according to the official portal Digidhan, payments worth Rs 2,729 crore have been settled from 1st April 2019 to date. The same has only seen an upward rise from the start of this year, the portal showed. UPI interface’s success is also evident. “The total volume of UPI transactions in Q3 2019 was 2.7 billion, a 183% increase from Q3 of the previous year. In terms of value, UPI clocked Rs 4.6 trillion, up 189% from Q3 2018,” Worldline said. The government has been undertaking various measures to spur digital payments. Under the same, RBI recently directed all banks to stop charging savings bank account customers for online transactions in the NEFT system and the same is expected to further accelerate digital payments.
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Source: Financial Express