NewKerala.com

Credit Card Spending Shifts: Why POS Transactions Surged 22% in October

Credit card spending saw a slight dip in October, but the story is in the details. A big shift happened as people flocked to physical stores for Diwali shopping, causing point-of-sale transactions to jump significantly. Meanwhile, online spending took a backseat, partly because of high spending in the previous month. Banks like HDFC and SBI were busy issuing new cards, even though the average amount spent per card actually went down.

Key Points: Credit Card Spending Eases in October as POS Transactions Grow

  • Overall credit card spending eased by 1.1% month-on-month to Rs 2,142 billion in October
  • Point-of-sale transactions surged 22% MoM, while online spending declined by 12.7%
  • The average spend per transaction fell by 6% MoM as transaction volume growth outpaced spending
  • HDFC Bank led new card issuances and gained the highest market share in monthly spending
2 min read

Credit card spends ease in October as point‑of‑sale transactions grow 22pc

Credit card spending moderated in October despite a 22% surge in point-of-sale transactions, driven by festive Diwali purchases and a shift from online spending.

"The strong POS growth can likely be attributed to festive (Diwali) spending, whereas muted online spends are due to the elevated base of the previous month. - Asit C. Mehta Investment Intermediates Report"

New Delhi, Dec 2

Credit card spending eased by Rs 2.5 billion in October to Rs 2, 142 billion, a moderation of 1.1 per cent month‑on‑month but an increase of 6.1 per cent year‑on‑year, driven by a sharp shift toward point‑of‑sale transactions, a report said on Tuesday.

"The strong POS growth can likely be attributed to festive (Diwali) spending, whereas muted online spends are due to the elevated base of the previous month," the report from Asit C. Mehta Investment Intermediates Limited said.

Point‑of‑sale transactions grew 22 per cent month‑on‑month and 11.4 per cent year‑on‑year, while online spending declined 12.7 per cent MoM and rose 2.7 per cent YoY. The top 10 banks accounted for 94 per cent of total spending, with HDFC Bank recording the highest MoM spending market share gain in October.

An increase of 6.7 per cent is seen in the total number of cards outstanding on a YoY basis, adding a total of 0.63 million cards, the report said.

Transaction volumes saw a healthy growth of 4.6 per cent MoM and 19.2 per cent YoY. The YoY growth is lower than the historical average due to a high base last year.

Since volume growth outpaced spend growth, the average spend per transaction declined by 6 per cent MoM and 11 per cent YoY. With card issuance rising and overall spending remaining flat, the average spend per card declined 1.7 per cent MoM and 0.5 per cent YoY.

IndusInd Bank reported a steep 36 per cent MoM decline in average spend per card, due to a sharp fall of 34 per cent in its total spends.

Among major banks, HDFC Bank led with 0.14 million new cards, followed by SBI (0.13mn), ICICI Bank (0.1mn), and Axis Bank (0.08mn). HDFC Bank reported the highest YoY gain of 1.12 per cent.

- IANS

Share this article:

Reader Comments

R
Rohit P
Interesting data. While overall spending is up year-on-year, the average spend per transaction is down significantly. This suggests people are using cards more for smaller, everyday purchases now, not just big-ticket items. A shift towards cashless for daily needs.
D
David E
The report mentions a "muted online spends" due to an elevated base. I think the bigger story is the relentless push by banks to issue new cards. Adding 6.3 lakh cards in a month! No wonder average spend per card is falling - they're giving cards to people who spend less.
A
Ananya R
HDFC Bank leading in new cards and market share gain is no surprise. Their rewards and offers during the festival season were very aggressive. But what happened with IndusInd Bank? A 36% drop in average spend is quite steep. Hope they address whatever caused that.
K
Karthik V
As a respectful criticism, I wish the RBI or banks would release more granular data. Which cities saw the highest POS growth? Was it mostly metro cities or tier-2/3 as well? This macro data is useful, but micro-data helps understand real penetration of digital payments.
S
Sarah B
The 22% month-on-month jump in POS is huge! It shows that despite all the talk about e-commerce, Indians still love the in-store experience, especially during festivals. The touch-and-feel factor, plus the immediate gratification, is still king.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50