MUMBAI: Spending is back with a bang. The July-September quarter has set a new record with the value of credit card transactions expected to have crossed Rs 2 lakh crore. According to payment industry officials, as transactions in September have matched or surpassed August, the l transactions for the quarter would be in excess of Rs 2 lakh crore.
Banks are expecting the spending spree to continue because of coordinated online and offline sales coupled with further opening up of travel and hospitality. October could see a new monthly record in credit card spends at Rs 80,000 crore, according to banks.
Spending on credit cards had taken a severe hit during the first nine months of the pandemic between (March 2020 to December 2020) with spending on debit cards outstripping credit for this period. October has begun with a bang thanks to the reopening of malls and online sales.
“Spending picked up in August with the festivals. Usually, September is muted but this year we saw a 50% increase over last year despite there being a shraadh period when spending is muted,” said Kush Mehra, president, Pine Labs, a merchant platform for payments. According to him, there are multiple factors at work.
“What is driving up volumes is that the size of the shopping cart has increased. There has also been a record deployment of point-of-sale terminals in smaller towns. We are planning to add 30,000 terminals in a month. The average ticket size has gone up because of the ‘buy now, pay later’ option on cards and we have seen 2x growth in our BNPL programme,” he said.
Innoviti, another payment solution provider for big-box retailers across the country, was taken aback by the surge in-store sales last weekend despite the shraadh period. “Volumes were17-18% higher than September pre-shraadh,” said Rajeev Agarwal, CEO, Innoviti.
“One insight we received was that the media campaigns by e-commerce giants were resulting in increased walk-ins into retail showrooms and many were able to convert the customers,” he said.
