Future Outlook of Indian Credit Card Industry: Ken Research

Overview of Indian Credit Card Industry and Market Size

Indian Credit Card Industry was valued at ~XX INR Crore in FY'22, expanding at a CAGR of XX% in between FY'17 and FY'22 on the basis of revenue generated with massive expansion in the adoption of credit card as the mode of payment due to rising industry valuation, trend of contactless payments and the emergence of credit card lending startups going beyond the typical credit card issuance model. The primary factors driving the market growth is the emergence of instant payment anytime and anywhere, rising internet penetration in the country, growing awareness among the users, controlled, secured and efficient transactions with convenience of use and a highly rewarding experience provided by the market players to their users. The volume of digital payments in India grew by 33% during the financial year 2021-2022. These payments are assisted by advanced technology and are, therefore, quick, simple and convenient. When these payments are assisted by credit products, they boost the purchasing power of people. Digital lenders like LazyPay have made these payment facilities widely accessible to all kinds of Indian residents in all major tier-I and tier-II cities. On the other hand, consumers too are increasingly being drawn to digital payments due surging adoption of contactless payments post COVID-19 which is also contributing in the growth of credit card market by increasing their userbase. The smartphone penetration rate in India is projected to increase from 54% in 2020 to 96% in 2040. As more and more people across India, including people in rural areas, use smartphones, they get increasingly exposed to digital payment modes. Gen-Zs and millennials are already comfortable with using them as they grew up with technology.  Merchants are linking themselves to new-age online payment gateways to allow more and more consumers to access and shop for their products easily. Thus, as digital payment modes are forming the bridge between multiple consumers and merchants, they're undergoing exponential growth. For instance, virtual cards like LazyCard by LazyPay are receiving 99.5% acceptance all over India. Besides the apps of digital lenders like LazyPay can be downloaded on both Android and iOS devices. The best part of digital payments is that they can be carried out instantly anytime anywhere and even on the move. However, especially when people are travelling, it often becomes a hassle to follow the OTP and remember the PIN. Thankfully, new-age digital payments have removed these hassles to speed up the process further. For instance, LazyPay's Buy Now Pay Later facility allows people to shop at 250+ partner merchants in a flash by skipping PINs and OTPs.

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Overview of Indian Credit Card Industry and Market Size

In the wake of the pandemic, the National Payments Corporation of India (NPCI) encouraged customers and providers of emergency services to adopt digital payment systems, ensuring the safety of contactless transactions. As a result, transactions increased to some extent. However, reduced international travel due to restrictions imposed during the 2020 - 2021 period negatively impacted credit card usage during that time. Revenue levers are likely to be hard to pull as several customers are unwilling to use credit cards frequently. Therefore, various cost management strategies need to be adopted by issuers to attract customers and attain a competitive and robust future for the credit cards market.

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Indian Credit Card Industry Segmentation, 2022

By Purpose of Usage: Credit Card market in India can be segmented on the basis of Purpose of Usage: ATM Withdrawals and non- ATM Purposes where number of credit cards issued for non-ATM purposes accounted for the highest market share of XX% as compared to the ATM withdrawals on the basis of revenue generated in the year 2022. Attributed to the fact that after Covid-19, there is an increase in online shopping rather than going to the stores which in turn increased the credit card usage.

By Type of Credit Card: Credit Card market in India can be segmented on the basis of Type of Credit Card: Personal Credit Card and Commercial Credit Card where Personal Credit card are dominating the Indian credit card industry with market share of XX% when compared to the commercial credit card on the basis of revenue contribution in 2022. This is due to the fact that Credit card companies often offer 0% APR on purchases and/or balance transfers for a limited period of time with better promotional incentives in case of personal cards.

By Payment System Operator: Credit Card market in India can also be segmented on the basis of Payment System Operator: VISA, Mastercard, Rupay, American Express, etc. where VISA is dominating the market with a share of XX% since 2017 whereas market share of Mastercard has declined in 2022 as RBI had barred Mastercard in 2021 from enrolling new customers for not storing their data in India.

Average Ticket Size of Loan Disbursement: Credit Card market in India can also be segmented on the basis of Average Ticket Size of Loan Disbursement: 1,00,000. Ticket size between Rs 50,000 to Rs 1,00,000 captures the major market share pf XX% in 2022 on the basis of revenue contribution. This is attributed to the rise in disposable income of consumers and better living standards.

Business Model Analysis of Newgen Cards

The business model of New Generation Credit Card players particularly revolved around being able to provide an extension of credit to individuals with no prior notable history of having used credit through organized sources, hence lacking a bureau-recorded credit score

Business Model Analysis Of BNPL Cards

The business model of BNPL players revolves around revenues earned from sellers and revenues earned from customers. Typically, there is a transaction fee which a vendor has to burden as part of offering BNPL as an alternative payment method to regular credit and debit cards, along with wallets and COD.

Business Model Analysis Of Loan EMI Cards

The Bajaj Finserv EMI card lets a person pay for a purchase in affordable EMI. As per research conducted, this card is mainly used for high ticket purchases such as electronics. Customers can visit any store of their choice which is affiliated with Bajaj Finserv, select a repayment tenor as per their choice, share the EMI network card details and complete the purchase process by submitting an OTP which is sent to the customer's mobile.

Government Initiatives in the Indian Credit Card Industry

With India on its path towards becoming digitally enhanced country which is majorly fueled by various initiative taken by Government of India in the recent years such as launch of Digi locker as a part of Digital India Initiative and PMJDY scheme among others. Government of India is focusing on complete digitalization of financial services in the country which helps in keeping the track of each activity happened at ease hence encouraging citizens to opt for these online services and is continuously promoting them.

There are several steps/initiatives taken by government to facilitate the Credit card issuance.

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Key Segments Covered in Indian Credit Card Industry

Indian Credit Card Market

By Purpose of Usage

Shopping/ Non-ATM Purpose
ATM Withdrawals

By Payment System Operator

Regular VISA
Peer to Peer Mastercard
Rupay
America Express
Others

By Type of Credit Card

Personal Credit Card
Commercial Credit Card

By Average Ticket Size of Loan Disbursement

Less than Rs. 25,000
Between Rs 25,000- Rs. 50,000
Between Rs. 50,000- Rs. 100,000
More than Rs. 100,000
Business Model Analysis of NewGen Cards
Business Model Analysis of BNPL Cards
Business Model Analysis of Loan EMI Cards

Overview of India Credit Card Industry

Comparison of Indian Credit Card Industry with Other Countries
Value Chain Analysis of Credit Cards
Scope for the Credit card in Semi-Urban and Rural India

Key Target Audience

Credit Card Issuing Banks
New Gen Credit Cards Players
Traders Loan EMI Credit Cards Players
Banking Institutions Payment System Operators
Regulatory Bodies BNPL Credit Cards Players
FinTechs
Various International Digital Lending Platforms and Players
New Entrants in Credit Card Space
Potential Credit Card Users

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Time Period Captured in the Report:

Historical Period: FY'2017-FY'2022
Forecast Period: FY'2022-FY'2027F

Indian Credit Card Industry Players/Ecosystem

Credit Card Issuing Banks

HDFC Bank
SBI
ICICI
Axis Bank
IDFC Bank
RBL
IndusInd Bank
Citibank
Bank of Baroda
Standard Chartered Bank
Kotak Bank
South Indian Bank

New Gen Credit Cards

Slice
OneCard
UniPay Card

Loan EMI Credit Cards

Bajaj Finserv
Tata Capital
HDFC EasyEMI
Home Credit India

Cards BNPL Credit Cards

Simpl
ZestMoney
LazyPay
CASHe
PostPe
Amazon Pay Later
Flipkart Pay Later
Ola Postpaid
Paytm Postpaid
Flexmoney
ICICI PayLater

Payment System Operators

Visa
Mastercard
American Express
Rupay
UPI

Key Topics Covered in the Report

Overview and Genesis of Indian Credit Card Market
India Credit Card Industry Cycle
Overview of Credit Card Services/ Products
Consumption Expenditure and Borrowing Trends
Emerging business models- Loan against Credit Cards
Socio-Demographic Outlook of India
Economic Outlook of India
Bank Loan Rates
Financing Options in India
Overview of India's Banking Industry
Digital Payment Growth v/s Cash Payment Growth
India Credit Card Industry Introduction
Comparison of Indian Credit Card Industry with Other Countries
Ecosystem of Entities in the Indian Credit Card Industry
Value Chain Analysis of Credit Cards
India Credit Card Market Sizing on the basis of number of credit cards outstanding, Number of Credit Cards Issued by Issuer Bank. Credit Card Transaction by Volume & Value and Annual Credit Card Spend and Monthly Transactions
India Credit Card Market Segmentation (By Purpose of Usage, By Payment System Operator, By Type of Credit Card, By Average Ticket Size of Loan Disbursement).
Business Model Analysis of NewGen Cards
Cross Comparison of Major Players in the NewGen Cards Segment
Business Model Analysis of BNPL Cards
Cross Comparison of Major Players in the BNPL Cards Segment
Business Model Analysis of Loan EMI Cards
Cross Comparison of Major Players in the Loan EMI Cards Segment
Trends and Developments
Growth Drivers of the Indian Credit Card Industry
Restraints and Challenges
Alternative Assessment for NIP (No-Income-Proof) Customers for Credit Card Offerings
Collection risks associated with credit card
Key Metrics of Credit Card Issuers in India
Government Initiatives in the Indian Credit Card Industry
Pradhan Mantri Jan Dhan Yojana (PMJDY)
Pradhan Mantri Jan Dhan Awas Yojana (PMAY)
Initiatives to Promote Access to Data & Innovation
Regulatory Sandbox
Launch of India Stack
Recognising P2P Lenders
Increase in number of Fintech start-ups
Growth of Digital Lending,
Credit Growth in Rural India
Evaluation of KYC Norms
Company profile of major Bank players operating in the ecosystem (Bank Overview, About the Company, Business Model, Product Offered, Key Features, Strengths, Recent Developments and Key Takeaways)
Company profile of major FinTechs players operating in the ecosystem (Company Overview, About the Company, Revenue Model, Funding and Investors, Key Features, Fee Structure, Product Offered, Strengths, Recent Developments, Key Takeaways and Financials)
Analyst Recommendations
Industry Speaks

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https://www.kenresearch.com/banking-financial-services-and-insurance/financial-services/indian-credit-card-industry/596370-93.html

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Ken Research is a Market Research and Consulting Firm, based out of India, Indonesia and UAE. Since 2011, we have been assisting clients globally with our Syndicate and Bespoke Market Research and Advisory Services.

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