India's Credit Card Market Set to Soar: PwC Report Projects 200 Million Cards by 2029

A PwC report anticipates India's credit card market to reach 200 million cards by FY28-29 with a 15% CAGR. The industry has doubled in the past five years, and transaction volumes and values have surged. Meanwhile, debit card usage declines due to UPI's growing popularity.

A recent PwC report forecasts that India's credit card market will reach 200 million cards by FY28-29, growing at a Compound Annual Growth Rate (CAGR) of 15%. The industry has already doubled its number of cards issued in the past five years, and this momentum is expected to continue.

The report noted that the industry's significant expansion is marked by a 100% increase in issued cards over the past half-decade. Additionally, credit card transaction volumes have grown by 22%, while transaction values surged by 28%, driven by new products, innovative offerings, and expansion into new customer segments.

Conversely, debit card usage is declining, with transaction volumes and values both dropping. In FY23-24, debit card transactions decreased by 33% in volume and by 18% in spending. The growing preference for the Unified Payments Interface (UPI) due to its ease of use and zero Merchant Discount Rate (MDR) for small to medium merchants largely accounts for this shift.

The report highlighted that debit cards are struggling to compete with credit cards in terms of rewards, making them less appealing to consumers. Despite this, digital payments in India are flourishing, with a 42% year-on-year increase in transactional volume in FY23-24. This growth is expected to triple by FY28-29, driven by innovations in the payment ecosystem, new business models, technological advancements, and increased customer awareness.

(With inputs from agencies.)