Chennai: UPI transactions are eating into the market of debit cards as the latter registered a drop in both volume and value of transactions in the first half of the year, while UPI continued to grow. However, transactions using credit cards meant for high-value purchases remained unaffected.
The volume of card transactions in H1’23 was 3.64 billion, a fall of 8.9 per cent from H1’22. The fall was driven primarily by debit cards followed by prepaid cards. In contrast, credit card transactions saw an upswing. Debit card transactions in H1’23 were 1.379 billion, a huge 28 per cent drop off from H1’22 while prepaid card transactions in H1’23 were 0.711 billion, a drop of 9.2 per cent from H1’22. Meanwhile, credit card transactions in H1’23 were 1.550 billion, a significant increase of 19.6 per cent when compared to H1’22, as per the data of Worldline India.
This same pattern was seen in the value of transactions and debit card transactions, which were a casualty of the upswing in UPI transactions. Credit card transactions which are usually used to make payments of higher value transactions such as for white goods, travel etc. have not been affected.
The value of total card transactions in H1’23 was Rs 11.35 trillion, an increase of 11.7 per cent from H1’22. This growth was largely supported by credit cards. Credit card transaction value in H1’23 was Rs 7.94 trillion, a strong rise of 30.5 per cent from H1’22 while during the same period, debit cards transaction value was Rs 3.17 trillion, a fall of 14.8 per cent and prepaid card transaction value was Rs 325 billion, a fall of 32.8 per cent.
Meanwhile, in H1’23, the volume of UPI transactions increased by 62 per cent from 31.95 billion to 51.91 billion. UPI is mainly used for smaller or micro-transactions similar to debit cards. The data also suggests that some of the debit card transactions were moving up in value. This was evident by the 18.3 per cent increase in the average ticket size (ATS) of debit card transactions to Rs 2303.
