Credit card base to reach 19 mn by FY13 end

The credit card segment in India witnessed growth in FY 2012-13 after a four year period of sluggishness.

Although it is still far from the peak of 2008, there has been an uptick in issuance from both private and public issuers and the base is expected to reach 19 million by the end of this financial year, said a report by Atos Worldline.

The debit cards issuance continued to see strong growth, with a 17% increase in FY13 estimated over FY12. The compounded annual growth rate (CAGR) over the past five years is now at 24%.

Banks have been adding between 40-50 million cards each year and this trend is likely to continue given large un-banked population, said the report.

Since the decline in FY10, credit card transactions have grown at a CAGR of 19%. With the increase in issuance expected to continue, a higher growth in spends and volumes is likely next year. Debit card transactions have grown at a CAGR of 38% in the five year period from FY09-13.

Unlike their limited presence in credit cards, the Public sector banks continue to have the dominant share in debit card issuance. The shares for all sectors remain unchanged from FY12.

As in past years, SBI continues to have the lions share in debit card issuance with a third of the market share. Large private and public banks follow, usually in proportion to their branch network and customer base across the country.

Debit cards account for nearly 94% of the total cards issued in India. The strong growth in transaction volumes has continued this year with a 33% increase over FY12 (42% growth in debit card transactions and a 23% growth in credit card transactions over FY12).

Debit card transactions in FY13 are estimated to account for 54% of the overall transactions, up from 33% in FY09. Per card activity in debit cards has increased at a slower pace at 11% since 2009, indicating that most of the growth in transactions and spends is fuelled by the increase in card base.

The per card activity in credit cards has increased substantially to over 21 transactions per card per year, an CAGR of 18% over the figure of 11 in FY09.