credit card benefits: Credit card usage sees a big jump this festive season

Usage of credit cards and credit-based payment instruments like pay-later products showed a robust increase during this year’s festive season sales, according to industry insiders.

While trends point towards a 35-50% jump in the total number of transactions this year against the festive months of last year, a significant chunk of the payments was through credit cards, EMIs (equated monthly instalments) and pay-later modes.

“Between October 3 and 12 this year, our platform saw a remarkable 106% increase in credit card transactions and a 60% rise in UPI transactions compared to the Navratri season last year,” said Rahul Kothari, chief operating officer at Razorpay, which offers omnichannel payment capabilities to merchants.

Amazon Pay, the fintech offering from the ecommerce giant, observed that around 20% of the purchases were made with EMI and 80% of EMI transactions were no-cost ones. In no-cost transactions, the brand subsidises the cost and consumers do not pay anything extra on instalments.

People bought video games like PlayStation 5 on no-cost EMIs through Amazon Pay.

“Over one in four customers used Amazon Pay instruments-Amazon Pay UPI, Amazon Pay ICICI Bank Credit Card, Amazon Pay Later, and Amazon Pay balance to shop (during Amazon Great Indian Festival),” Amazon Pay chief executive Vikas Bansal said. Using the platform for recharges and bill payments, meanwhile, has increased 30% from a year earlier, he said.

Besides pay-later products, industry insiders also observed a higher usage of credit cards this year.

“The use of credit cards has shown the highest growth, with 53% more transactions processed compared to the previous year. This demonstrates a notable increase in the use of credit cards,” said Sheik Mohideen, executive vice president, Worldline India, a major deployer of point-of-sale terminals for banks.

As per central bank data, the number of credit cards issued in India was 105 million as of August.

Lifestyle, fashion and electronics emerged as the major sectors driving the jump in the usage of credit cards.

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