This year, credit card users swiped 5x more than debit card users: PayU

• Credit card users spent about five times more than debit card users in 2022. It was also the most preferred payment method this festive season.
  
• OTT expenditure, alone, grew by 80% during the festive season leading to less expenditure on going out.
  
• Currency in circulation also declined during Diwali for the first time in two decades, according to industry estimates.
  

This festive season, Indians have been spending via swiping as per a PayU Insights Report - Festive Edition. Even as digital transactions have been steadily increasing, it was a busy festive season for the payments platform which recorded 7 million transactions on a single day in September, after major festive sales were announced.

However, online sales itself were not the only drivers for the rise in PayU transactions. Thanks to the post-pandemic rise in revenue tourism, travel expenditure on the platform grew a massive 165%. OTT expenditure, too, grew 80% during the festive season.

Consequently, expenses related to watching movies physically and attending on-ground events witnessed a decline in expenditure and transactions of 11% and 43% respectively, the report said.

Holiday packages saw a 70% increase in expenditure and 341% increase in average ticket size. Expenses on cabs, trains, airplanes also showed a growth.

For the entire festive season, PayU reported a 64% increase in expenditure and 31% increase in the number of transactions compared to the festive sale period in 2021 (September 15- October 15, 2022 vs 1-31 October 2021).

According to an SBI Ecowrap report, the rise in digital transactions was very evident this festive season. For the first time in 20 years, currency in circulation has declined during the Diwali week.

“The Indian economy is undergoing a structural transformation. The innovations in technology have changed the Indian payment system. Over the years, the Indian cash-led economy now has changed to (a) smartphone-led payment economy,” said SBI Ecowrap.

The yearly growth

It isn’t just festive shopping either. Digitization of transactions is taking place across categories.

The pandemic itself was a great driver of digital adoption as PayU saw a 245% increase in expenditure and 130% increase in transaction volumes between 2019 and post-pandemic period of 2022.

“One of the highest categories for UPI spending was credit repayment, showing that Indians are increasingly repaying personal loans using UPI,” said PayU. RuPay, one of India’s largest circulated credit and debit cards, already has UPI linked with it.

The “do-it-yourself wealth management platform” is another emerging post-pandemic behaviour among young Indians. Investments saw a 66% growth in expenditure and 50% growth in average ticket size, PayU estimated.

Credit vs debit cards

The spending patterns also differed as per the mode of payment. Credit card users spent about five times more than debit card users in 2022, as per the report.

“Interestingly, credit card users spent about 5 times more than debit card users in 2022 (total expenditure), in spite of the fact that there is one credit card for every 12 debit cards. On an average, a credit card user spent ₹6,000 as opposed to a debit card user who spent ₹2,500, in 2022,” the report said.

Post Covid-19, the cards in circulation have already breached the 1 billion mark, UPI is tracking over six billion transactions per month, about 53 million FASTags have been issued, and over 20,000 billers live on Bharat BillPay ecosystem alone, India Digital Payments Report revealed.

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