Four-fold rise in debit card use at point of sales: Study

The country witnessed a four-fold rise in debit card transactions at point-of-sale (POS) terminals last year, according to a study by Mastercard Worldwide.

The increase in debit card usage at swipe machines did not come at the cost of ATM transactions, which recorded an increase of 34 per cent in the average number of withdrawals per active debit card on an annual basis. However, the average transaction value for both POS and ATM withdrawals remained relatively unchanged between 2008 and 2009.

“It is evident that Indian debit cardholders are becoming more aware and comfortable with using debit cards to make electronic purchases at merchant outlets,” said Lance Blockley, managing director of Edgar, Dunn & Company, which assisted in the study.

 

“Although there has been significant growth in debit card usage in the country, the overall debit card activity remains behind that of the United States and Europe, indicating further growth potential.”

While the number of credit cards in issue declined, there was 28 per cent growth in the average number of transaction per active card, indicating increased usage of existing cards. However, the average transaction value remained unchanged.

The study found that compared to other markets like the US and Europe, Indian credit card holders are generating higher levels of international spend. Indian card-not-present transactions over internet also reported higher volumes compared to its international peers.

“The increase in average spend, transactions and cross-border activity is clearly seen as one progresses from standard to gold to platinum cards and this trend indicates that people are getting cards that match their capabilities,” said Blockley.