India's credit card market set to double, reaching 200 million by FY28-29. PwC report highlights rapid growth, debit card decline, and digital payment surge.

A recent PwC report projects that the number of credit cards in India is set to reach a remarkable 200 million by the fiscal year 2028-29. This impressive growth translates to a compound annual growth rate (CAGR) of 15%, highlighting the robust expansion of the credit card market in the country.

Credit Cards: Rapid Growth and Increased Usage

The report underscores that the credit card industry has already experienced significant expansion, with card issuance doubling over the past five years. This upward trajectory is anticipated to persist, potentially leading to a further doubling of the market in the coming years. Alongside this growth in issuance, transaction volumes have witnessed a notable increase of 22%, while transaction values have surged by 28%. The report attributes this surge in activity to the introduction of new products, innovative offerings, and the expansion of customer segments.

Debit Cards: A Decline in Usage

In contrast to the thriving credit card market, the report highlights a decline in debit card usage. Both transaction volumes and values associated with debit cards have decreased, suggesting a shift in consumer preferences. This decline is primarily attributed to the rising popularity of the Unified Payments Interface (UPI), which offers a seamless payment experience and has become a favored choice for small to medium merchants due to its zero Merchant Discount Rate (MDR). Additionally, the report notes that debit cards have struggled to compete with credit cards in terms of reward programs, further contributing to their diminishing appeal.

Digital Payments: Continued Growth

Despite the decline in debit card usage, the broader landscape of digital payments in India continues to flourish. Transactional volumes for digital payments grew by an impressive 42% year-on-year in FY23-24, and this trend is projected to triple by FY28-29. The report suggests that various factors fuel this ongoing growth, including innovations within the payment ecosystem, the emergence of new business models, technological advancements, and increased consumer awareness.

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Swayam Malhotra

Swayam, a journalism graduate from Panjab University with 5 years of experience, specializes in covering new gadgets and tech impacts. His extensive coverage of software solutions has been pivotal in PC-Tablet's news articles. He specializes in analysing new gadgets, exploring software solutions, and discussing the impact of technology on everyday life.