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Consumer spending through credit cards saw a big jump in the first three days of implementation of GST 2.0, industry players told FE.
According to lenders, there has been a fivefold rise in the daily average spending to Rs 20,000-25,000 crore from the usual Rs 5,000-6,000 crore.
For SBI Card, consumer spending was seen in discretionary and non-discretionary categories, said Salila Pande, MD & CEO at SBI Card, adding that she expects this upward trend to continue throughout the festive season.
Bikram Yadav, head-credit cards at RBL Bank, said: “We have seen a sharp 20% increase in customer demand over the past couple of days, driven primarily by the recent GST relief and the resulting positive market sentiment. This uplift reflects growing consumer confidence and a readiness to spend ahead of the festive season.”
Besides the rollout of tax reforms, aggressive e-commerce festive sales programmes also contributed to the boom. “September’s data for the last three days show a fivefold jump signalling a potent mix of policy reform and market-led activation, setting the stage for a robust Q3 in retail finance,” said a source at NPCI, India’s retail payment and settlement system.
Festive Campaigns Fuel Spending Surge
Ravindra Rai, MD & CEO of BOBCARDS, said: “With GST 2.0 benefits and exciting BOBCARD festival offers in place, we are already witnessing a surge in spending. As the festive season kicks off, consumer momentum is set to soar even higher.”
BOBCARDS witnessed a 40% jump in credit card spends in the past two days, compared to the same period in the previous month.
Analysts said a smoother input credit flow, reduced rate multiplicity, and early merchant adoption across retail, travel, and services created a ripple effect in consumer sentiment, with merchants passing on benefits through discounts and bundled offers, especially in high-frequency categories like electronics, fashion, and dining.
Pande added that with strengthened consumer confidence and demand, SBI Card has launched a festive campaign – Khushiyan Unlimited by offering 1,250+ merchant-funded, cashback, and instant discount offers across 2900+ cities, including tier 2 and 3. Covering all key categories such as consumer durables, mobiles, laptops, fashion, jewellery, e-commerce, and grocery, along with EMI-focused offers for high-value purchases, the festive campaign has accelerated transactions across e-commerce, travel, and discretionary retail.
Market Share Gains and Sector Impact
The surge in credit card spends comes after a subdued August that witnessed a fall in total value spend to `1.91 lakh crore, down 1.4% on a month-on-month basis. In July, the total value spent was at Rs 1.94 lakh crore. In August, the total number of credit cards was at 112.31 million.
The per-card spends increased 6.6% on year to Rs 17,053 crore. Since July, spends are lower by nearly 2%. On the online e-commerce platform, transactions saw a dip of 4.1% month-on-month to Rs 1.18 lakh crore in August. Credit card point-of-sale increased 3.4% m-o-m to Rs 72,747 crore.
In terms of credit card spending, HDFC Bank gained market share – it stood at 28.2% in August from 27.8% a month ago. SBI and IndusInd Bank, too, gained market share on a m-o-m basis. Share of ICICI Bank and Axis Bank stood at 18% and 11.4%, respectively, with both the lenders reporting decline.
According to government data, the implementation of GST 2.0 on September 22 marked a pivotal shift in India’s indirect tax architecture. According to the GST 2.0 Day 1 records, the new regime saw record-breaking numbers in the automobile sector, with Maruti recording the highest single-day performance of 80,000 enquiries and 30,000 deliveries of cars in the past 35 years. Similarly, Hyundai recorded the best single-day dealer billing performance in five year of 11,000, while Tata Motors recorded 10,000 deliveries on the first day of Navaratri.
The excitement extended to e-commerce/digital platforms where shoppers rushed to stock up on fashion and home essentials. For instance, television sales surged in the 43 and 55 inches segment, with companies like Super Plastronics reporting a 30-35% growth, largely sold through Flipkart.
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