Banks manage reward points costs with hike in slabs, explicit cuts

With the rise in use of debit and credit cards, banks should have seen a significant rise in card reward points as well. However, banks are managing these costs closely through a hike in slabs and some explicit cuts.

As a result, even as key private banks witnessed 45% annual growth in the value of card transaction over FY16-18, the provisions for rewards have grown a mere 16%. 

This reflects the changes in reward structures and also the rise in share of debit cards in total transactions in which rewards are lower. Across banks, reward points are 0.1-0.2% of the total card usage, (with credit cards at 0.8-1%).