New Delhi: With the increasing use of UPI payments by customers, credit and debit cards are steadily losing market share over a period of time. The latest data released by the RBI shows that debit card swipes at e-commerce outlets have declined more than 50% in the last two years. The development comes at a time when both credit cards and UPI adoption are on an upswing.
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As per the available data, debit card swipes have gone down by 56% at 51 million in September 2023 against 117 million in April 2022. However, credit card usage was up by 22% at 131 million compared to 107 million in the same time frame.
In contrast, the UPI payments have gone up by 177% between 6 billion in September and 2.2 billion in April last year for merchant payments.
Why Credit Card Usage Has Gone Down?
Industry insiders say that ease of UPI payment has led to a decline in the use of credit cards for online transactions.
Analiza Pathak, one of the customers, told India.com that she stopped using credit card because it made the purchase more expensive, whereas the UPI Payment made her life easy.
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“One of the main reasons why I stopped using credit card is because of its high interest rates which makes purchases more expensive, if you fail to pay your full bill on time. Credit card also makes a person, specially me buy mindless things as you do not have to make payment at that very point which later rack up interest and you end up paying back more money than you spent,” she said.
Analiza further added that the UPI payment, on the other hand, is easy, convenient, fast and most importantly safe. “Since I have started using UPI life has become easier. It is easy, convenient, fast and most importantly safe. It allows you to link multiple bank account in a single app making transactions between the banks easier. People from all walks of like uses UPI which is unlikely with credit card payments,” she said.
Arun Kumar, another customer, said UPI payment has made the online transactions easy than credit cards. Moreover, he said it helped him for his finance management.
“UPI Payment has made online transaction easy. It also discouraged me from using Credit cards which used to encourage buying habits that ultimately affected my financial management. I decided to gradually reduce the usage of my Credit Card and now stopped purchasing through it,” he said.
How UPI Payment Impacts Credit Card Usage?
The increasing use of UPI payment is taking a significant chunk of digital payments away from the world of global card schemes like Visa and Mastercard. Earlier, these card players were generating maximum revenue from credit cards, with more than 950 million debit cards in the country. Now with the massive use of UPI and RuPay payments, this impact is expected to get more profound.
