Money & Banking

People are now using credit cards for everyday purchases: Worldline MD

KR Srivats New Delhi | Updated on January 16, 2018



Demonetisation has resulted in ‘habit changing’ behavioural shift among card users

The Centre’s move to remove bulk of the high value banknotes from circulation has transformed the way consumers use their cards over the last month, a top official of leading electronic payment processor Worldline has said.

Describing it as “habit changing” behavioural shift, Deepak Chandnani, Managing Director, South Asia & Middle East, Worldline, said that people have now started to use credit cards for purchase of everyday items.

“Since you have a credit card and there is not enough cash in demonetisation scenario, one tends to use more of such cards for payments”, he noted.

Till November 8 — when demonetisation was announced — most of the credit card usage was only for buying big ticket items. Now, that has changed.

“We have found a decline in average ticket size in transaction for both debit and credit cards in last 30 days,” Chandnani told BusinessLine here.

In the case of credit card, the average transaction size has come down by about 30 per cent. It used to be about ₹4,000-5,000. Now, it is about ₹3,000. For debit card, it has come down by 15 per cent and the average ticket size is ₹2,000.

Chandnani should know better as Worldline — a B2B payments company — is a leading electronic payments processor and already manages a third of 1.5 million point-of-sale (POS) terminals in the country.

He is quite encouraged by the Finance Ministry’s latest directive to banks to ensure deployment of additional million POS machines by March 2017.

“As more terminals get deployed, we will get more terminals managed by us. That’s how our business will grow. Also, when more transactions happen on these terminals, our business will only increase as we also process transactions at POS,” Chandnani said.

He also said that use of debit cards, which is the bulk of the new cards issued, has already gone up dramatically.

“Debit cards used to contribute 57 per cent of all transactions and about 50 per cent of value in POS machines till two months ago. Now since demonetisation happened, debit cards account for 80 per cent in numbers and roughly 80 per cent in value at POS,” Chandnani said.

Published on December 11, 2016

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