Credit And Debit Card Transactions Continued A Slow Rebound In June 
Logos of Mastercard and Visa sit on credit cards in this arranged photograph. (Photographer: Andrey Rudakov/Bloomberg)

Credit And Debit Card Transactions Continued A Slow Rebound In June 

Monthly credit and debit card transactions, which fell sharply in April amid the Covid-19 outbreak, began a slow rebound in May and June, data released by the Reserve Bank of India shows. Data for card transactions is released with a lag.

Debit card spends in June rose to 77% of the levels seen in February before the pandemic hit. In May, debit card spends were at 59% of February levels. For credit cards, spends in June rose to 69% of February levels compared to just 52% in May.

The Narendra Modi-led government announced a national lockdown in March, which led to fewer spending options for customers and a drop in transaction volumes as well as value. Since then, the restrictions have been eased, even though local checks have continued.

Volume of transactions improved as well.

Debit cards recorded 31 crore transactions in June, compared with 43.8 crore in February. Credit card volumes were at 12.5 crore in June, as compared with 18.82 crore in February.

Further, the RBI data showed that online transactions via debit cards in June outstripped payments and withdrawals via point-of-sale terminals. In January, point-of-sale terminals saw higher spends than other modes of transactions through debit cards.

While credit card transactions have rebounded, the proportion of spends being converted into loans has slowed significantly, suggesting that a larger part of the spend is getting paid within the first 30-day cycle. The RBI’s monthly sectoral credit data showed that credit card loans rose 2.8% year-on-year in June, as compared with over 22% year-on-year growth in March. On a year-to-date basis, outstanding credit card loans have been shrinking since March.

Card transaction data is released with a longer lag compared to payment data via the UPI platforms. Those transactions have risen to above the levels seen in January and February. To be sure, this may also be due to a switch away from card transactions and towards UPI-based payments.

In June, UPI reported over 133 crore transactions worth Rs 2.6 lakh crore. The numbers rose to nearly 150 crore transactions worth Rs 2.9 lakh crore in July, according to data available with the National Payments Corporation of India.

Also read: Covid-19 Crisis Continues To Give Digital Payments A Boost

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