Tier-2 and Tier-3 cities drive 4X surge in credit card spending, says Visa India Head

India’s credit card market holds a massive untapped opportunity, according to Sandeep Ghosh, Group Country Manager at Visa India & South Asia. Despite a population of over 1.4 billion, India has only around 110 million credit cards in circulation, with just 50 million unique users. Ghosh estimates there are another 100 to 150 million credit-eligible individuals without a card. “That’s a huge opportunity,” he said in an interview with CNBC-TV18.

He attributed the low penetration in part to information asymmetry and the cautious stance of banks, especially when it comes to underwriting self-employed individuals—who form a large part of India’s workforce. “A credit card is a form of unsecured loan, and banks need to be comfortable before they issue one,” he explained.

One key driver of increased card usage has been international travel. As more Indians go overseas for business, leisure, and education, they’re getting used to the convenience of card-based payments, especially in places where cash is no longer even an option. “From a duty-free store to the London Metro, digital payments have become the norm, and within that, cards are the most popular way to pay,” Ghosh said.

Back home, the explosion of e-commerce and delivery networks has also boosted digital payment adoption. Ghosh revealed that over 60% of card payments now happen in “card-not-present” transactions—online shopping, food delivery, and other digital services. “Digital payments are a function of habit. The more you do it, the more comfortable you become,” he noted.

Greater card acceptance across India—fueled by point-of-sale machines, and low-cost terminals—has further helped. The pandemic acted as a strong catalyst, pushing even traditionally hesitant consumers toward digital payments and credit products.

Interestingly, today’s affluent Indian is not just from the metros. “Many of the new emerging affluent are coming from cities like Ludhiana, Agra, and Coimbatore,” Ghosh said, adding that credit card spending in tier-2 and tier-3 cities has grown 4x since the pre-COVID period, compared to 1.5x growth in tier-1 cities.

And it’s not just about transactions. The affluent class, especially younger consumers, are looking beyond cashback and rewards. “People are also increasingly looking for experiences, privileges, access, and benefits that are curated and really address their aspirations,” said Ghosh. This shift from material rewards to aspirational experiences is reshaping the way financial services companies like Visa approach product design and consumer engagement.

India, he said, is undergoing a “democratisation of affluence,” where aspiration, access to digital tools, and experience-driven consumption are redefining what it means to be affluent—well beyond income or geography.

Watch the accompanying video for more

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}