Financial Cards in India
Euromonitor International's Financial Cards in India report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
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Tables: 87 | Publication date: Apr 2008
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Financial cards in circulation; Transactions
Executive summary
Economy driving spending
India is the second fastest growing market for financial cards in the Asia-Pacific region. The country’s credit card base, pegged at 27 million in 2007, is growing at an annual rate of 30-35%. The cardholders are increasingly using credit/debit cards for dining, purchasing clothing, petrol, durable goods and jewellery. Most Indians now have multiple cards, through which they utilize balance transfers to reduce their interest burden over the short term. A thriving economy, substantial increase in disposable incomes and consequent rise in consumer expenditure, growing affluence levels and consumer sophistication have all led to robust growth in credit cards, and each issuer has posted an enviable annual growth rate for several years. New products, foreign participation and a booming tourism industry are combining to create high levels of growth in India’s nascent financial cards market, helped by product innovation and a supportive regulatory environment.
Cards are increasingly feature-driven
Despite the high demand, the quality of services has not declined. Product features match the best anywhere in the world. Almost all the credit cards come with standard benefits such as free accident insurance, medical insurance at a heavy discount and much more. The cardholder is offered the option of converting a big purchase made on a credit card into a loan at a lower rate of interest spread over a long period. Banks even offer details of expenses incurred on credit cards under different headings – such as food, clothes and jewellery - to enable easier tracking by the customer. E-mail alerts and mobile alerts on credit cards are commonplace.
Debit card growth to continue
Debit cards are expected to continue their spectacular growth rate. The re-carding of ATM cards into debit cards will boost hugely the current numbers. However, in terms of usage, there is still a long way to go with a substantial number of the cards remaining inactive at point of sale (POS). The industry will have to work hard to educate the cardholder, to create awareness about the benefits and create some form of incentive to initiate first usage.
POS deployment to continue at an aggressive pace
Many new categories are expected to open up in terms of acceptance: petrol, grocery, healthcare, automobiles, for example. The traditionally all-cash categories are also expected to accept cards soon. Furthermore, expansion will occur beyond the six metros leading to a much wider market across the country. A few more banks are also expected to enter the market. However, industry growth is inhibited by the lack of the infrastructure necessary to reach a critical level of utility for the general population.
Favourable regulatory environment
India’s regulators have been generally supportive in the development of the financial cards industry in the country. The Reserve Bank of India recently allowed certain non-banking finance companies to issue co-branded credit cards with commercial banks, though the non-bank partner’s activities are restricted to the marketing and distribution of the co-branded cards. The government has also been a leading player in encouraging access to financial cards for India’s poor, especially in rural areas, through schemes such as the Kisan Credit Card, which is aimed at the farming community.
Indian banks planning rival to Visa, MasterCard
India’s banks are considering establishing a domestic card transaction settlement company called “India Pay”, as an alternative to Visa and MasterCard. This plan was proposed by the Indian Banks’ Association (IBA), following a forecast that Indian card payments will increase threefold over the next five years. Between 2005 and 2006, interchange on Indian card transactions totalled around US$50 million. Setting up a domestic card payment settlement company would enable Indian banks to save interchange fees paid to Visa and MasterCard.
It is expected that India Pay would use different payment networks depending on the cost advantage and the nature of particular transactions. For foreign transactions, the India Pay switch could link up to Visa or MasterCard or to another payment system such as China Union Pay, China’s national bank card scheme.
Table of contents
FINANCIAL CARDS IN INDIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Economy driving spending
Cards are increasingly feature-driven
Debit card growth to continue
POS deployment to continue at an aggressive pace
Favourable regulatory environment
Indian banks planning rival to Visa, MasterCard
KEY TRENDS AND DEVELOPMENTS
Trends
Biometric cards for rural India
Effect of foreign players
Attracting the affluent
Diversification/Expansion of the role of ATM
Growing beyond metros
Public sector banks eyeing the financial cards market
Value-Added Services
OPERATING ENVIRONMENT
Consumer credit and lending
Issuer Fraud
Acquirer fraud
E-commerce
M-commerce
ATM and POS terminals
Cash Withdrawal versus Card purchase
Governmental regulation and legislation
MARKET INDICATORS
Table 1 Number of POS Terminals 2004-2007
Table 2 Number of ATMs 2004-2007
Table 3 Disposable Income 2002-2007
Table 4 Consumer Credit 2002-2007
Table 5 Value Lost to Fraud 2002-2007
MARKET DATA
Table 6 Financial Cards: Transactions 2002-2007
Table 7 Financial Cards: Value 2002-2007
Table 8 Financial Cards: Number of Cards in Circulation 2002-2007
Table 9 Financial Cards: Number of Accounts 2002-2007
Table 10 Domestic versus Foreign Spend 2007
Table 11 Card Expenditure by Sector 2007
Table 12 Card Expenditure by Location 2007
Table 13 Financial Cards: Number of Internet Transactions 2002-2007
Table 14 Financial Cards: Internet Transaction Value 2002-2007
Table 15 Financial Cards: Number of Cards by Issuer 2002-2006
Table 16 Financial Cards: Number of Cards by Operator 2002-2006
Table 17 Financial Cards: Point of Sale Transactions by Acquirer 2002-2006
Table 18 Financial Cards Forecast: Transactions 2007-2012
Table 19 Financial Cards Forecast: Value 2007-2012
Table 20 Financial Cards Forecast: Number of Cards in Circulation 2007-2012
Table 21 Financial Cards: Forecast Number of Accounts 2007-2012
Table 22 Financial Cards Forecast: Number of Internet Transactions 2007-2012
Table 23 Financial Cards Forecast: Internet Transaction Value 2007-2012
DEFINITIONS
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - INDIA
BANK OF BARODA - FINANCIAL CARDS - INDIA
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Bank of Baroda: Key Facts
Summary 3 Bank of Baroda: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
CITIBANK INDIA - FINANCIAL CARDS - INDIA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Citibank: Key Facts
Summary 5 Citibank: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
HDFC BANK LTD - FINANCIAL CARDS - INDIA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 HDFC Bank Ltd: Key Facts
Summary 7 HDFC Bank Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
ICICI BANK LTD - FINANCIAL CARDS - INDIA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 ICICI Bank Ltd: Key Facts
Summary 9 ICICI Bank Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
STATE BANK OF INDIA - FINANCIAL CARDS - INDIA
STRATEGIC DIRECTION
KEY FACTS
Summary 10 State Bank of India Ltd: Key Facts
Summary 11 State Bank of India Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SMART CARDS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 24 Smart Cards Sector Performance: 2002-2007
Table 25 Smart Cards Sector Performance: % Growth 2002-2007
Table 26 Smart Cards: Memory Vs Microprocessor 2004-2007
Table 27 Smart Cards: Contact Vs Contactless 2004-2007
Table 28 Smart Cards: Forecast Sector Performance: 2007-2012
Table 29 Smart Cards: Forecast Sector Performance: % Growth 2007-2012
ATM TRANSACTIONS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 30 ATM Cards Sector Performance: 2002-2007
Table 31 ATM Cards Sector Performance: % Growth 2002-2007
Table 32 ATM Cards: Forecast Sector Performance: 2007-2012
Table 33 ATM Cards: Forecast Sector Performance: % Growth 2007-2012
DEBIT TRANSACTIONS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 34 Debit Cards Sector Performance: 2002-2007
Table 35 Debit Cards Sector Performance: % Growth 2002-2007
Table 36 Debit Cards: Number of Cards by Issuer 2002-2006
Table 37 Debit Cards: Number of cards by Operator 2002-2006
Table 38 Debit Cards Transactions by Acquirer 2002-2006
Table 39 Debit Cards Transaction Value by Operator 2002-2006
Table 40 Debit Cards: Forecast Sector Performance: 2007-2012
Table 41 Debit Cards: Forecast Sector Performance: % Growth 2007-2012
CREDIT CARD TRANSACTIONS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 42 Credit Cards Sector Performance: 2002-2007
Table 43 Credit Cards Sector Performance: % Growth 2002-2007
Table 44 Personal Credit Cards Sector Performance: 2002-2007
Table 45 Personal Credit Cards Sector Performance: % Growth 2002-2007
Table 46 Corporate Credit Cards: Sector Performance: 2002-2007
Table 47 Corporate Credit Cards: Sector Performance: % Growth 2002-2007
Table 48 Credit Cards: Number of Cards by Issuer 2002-2006
Table 49 Credit Cards: Number of cards by Operator 2002-2006
Table 50 Credit Cards Transactions by Acquirer 2002-2006
Table 51 Credit Cards Transaction Value by Operator 2002-2006
Table 52 Personal Credit Cards Transactions by Acquirer 2002-2006
Table 53 Personal Credit Cards Transaction Value by Operator 2002-2006
Table 54 Corporate Credit Cards Transactions by Acquirer 2002-2006
Table 55 Corporate Credit Cards Transaction Value by Operator 2002-2006
Table 56 Credit Cards: Forecast Sector Performance: 2007-2012
Table 57 Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 58 Personal Credit Cards: Forecast Sector Performance: 2007-2012
Table 59 Personal Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 60 Corporate Credit Cards: Forecast Sector Performance: 2007-2012
Table 61 Corporate Credit Cards: Forecast Sector Performance: % Growth 2007-2012
PRE-PAID CARD TRANSACTIONS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 62 Pre-paid Cards Sector Performance: 2002-2007
Table 63 Pre-paid Cards Sector Performance: % Growth 2002-2007
Table 64 Pre-paid Cards: Number of Cards by Issuer 2002-2006
Table 65 Pre-paid Cards: Number of cards by Operator 2002-2006
Table 66 Pre-paid Cards Transactions by Acquirer 2002-2006
Table 67 Pre-paid Cards Transaction Value by Operator 2002-2006
Table 68 Pre-paid Cards by Type 2004-2007
Table 69 Pre-paid Cards: Forecast Sector Performance: 2007-2012
Table 70 Pre-paid Cards: Forecast Sector Performance: % Growth 2007-2012
STORE CARD TRANSACTIONS IN INDIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 71 Store Cards Sector Performance: 2002-2007
Table 72 Store Cards Sector Performance: % Growth 2002-2007
Table 73 Store Cards: Number of Cards by Issuer 2002-2006
Table 74 Store Cards Transactions by Acquirer 2002-2006
Table 75 Store Cards: Forecast Sector Performance: 2007-2012
Table 76 Store Cards: Forecast Sector Performance: % Growth 2007-2012