Visa Eyes 50 M Debit Cards Base By 2010

The debit card base in the country is set to touch 50 million by 2010 from the around 3.3 million cards, at present.

"The frustration is that other than ATMs there are not enough merchant outlets where one can use the debit cards. A typical person wants to use the card in a grocery or a pharmacy which is not there right now. The credit card is perceived as for the elite. With the advent of debit card anyone can have a card," James Murray, general manger and executive vice president (Asia- Pacific), Visa International, said.

According to Murray, the problem is it is difficult to unlock the opportunities in India. "There is a lot of retailing in very small shops. The merchant and the consumers needs simple, safe and inexpensive payment products," he said.

 

Currently, of the total one lakh terminals across the country, only around 45,000 are electronic data terminals. "India should have around 3,00,000 terminals. Each EDC terminal costs Rs 25,000 and this is costly for small shop owners. India needs something which is cheaper and is also a workhorse," Santanu Mukherjee, country manager, South Asia, said.

On MasterCard's debit card initiative - Maestro- Murray said " It was introduced in Bangalore and has stayed as an experiment . The problem is that it is a pin-based card. It never broke out of the ATM network. India needs to put a lot more electronic terminals on the merchant side," Murray added.

Murray claims that Visa's debit card -Electron - is a better product. According to him, "It is a human product and rides on the existing infrastructure in the country."

Debit cards can be segregated into pin-based and signature-based debit cards. Visa's debit card is a signature-based debit card. Of the 3.3 million debit cards in the country, Visa claims to have a base of 2.5 million. It has signed 17 banks in the country for its debit card.

Added June Seah, senior manager for south-east Asia, there is a zero fraud rate on signature-based debit cards in the country and this is seen also in other markets across Asia.

According to Murray, 40 per cent of the cards in the country are dormant and is kept only for emergencies. The average card spend in the country is at Rs 19,000 a card with 50 to 55 per cent of the cards revolving the credit.