India card payments market

The primary factor driving the growth of the market in the region is the rising adoption of #digitalpayments supported by government initiatives and strong growth in E-commerce, among others.

As per #GlobalData, card payments value in India registered a strong growth of 26.7% in 2022, supported by improving economic conditions. This trend is expected to continue in 2023 and India’s card payments market is set to grow at a CAGR of 18.7% between 2022 and 2026 to reach Rs 43.3 trillion ($581.1 billion) in 2026.

Experts say that, India, which is primarily a cash-driven economy, made robust progress in the adoption and usage of card payments supported by consumers’ increasing preference for electronic payments, improvement in payment infrastructure, and constant efforts by financial authorities to increase financial inclusion and boost cashless payments.”

The introduction of low-cost banking services under Pradhan Mantri Jan Dhan Yojana program, the appointment of banking correspondents to serve remote population, the launch of payments banks, and the reduction of merchant fees on card-based payments are some of the initiatives from government and the central bank that led to rise in card payments in the past few years.

The post-pandemic recovery in card payments is mainly driven by credit and charge cards, with this card category growing by 39.2% in 2022, as consumer spending increased on travel, accommodation, restaurants, and transportation. Regular benefits such as loyalty programs, discounts, and availability of instalment facilities are also aiding to rise in credit and charge card usage.

The card payments market, however, is witnessing some hiccups due to the rising inflation rate as the country’s central bank is on an interest rate hike path to control inflation. The repo rate was increased in phases to 6.50% in February 2023 from 4.40% in May 2022, making credit costlier for consumers.

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