Spending on credit cards surged around 19 percent on-year to Rs 1.73 lakh crore in July, according to the Reserve Bank of India (RBI) data. On a monthly basis, however, it increased just by 9 percent. The spending stood at Rs 1.59 lakh crore in June 2024 and at Rs 1.45 lakh crore in July 2023.

Experts attributed this growth to deeper penetration of credit cards and payments through credit cards on the Unified Payment Interface (UPI).

“The spends have been increasing (year-on-year) across categories. This can be attributed to increasing penetration of credit cards which, along with the option of making payment through credit cards on UPI, has led to increased spends on credit cards,” said Sachin Sachdeva, vice-president and sector head of Financial Sector Ratings at ICRA.

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Out of the total Rs 1.73 lakh crore credit card transactions, e-commerce payments have been highest of Rs 1.11 lakh crore. This was followed by a point of sale (PoS) expenditure of Rs 62,285 crore. E-commerce payment transactions rose 16 percent on a yearly basis, PoS transactions surged 25 percent on-year, data showed.

“The increasing penetration of PoS machines and widening merchant base accepting the credit cards is also driving up spends,” said Sachdeva.

Going ahead, ICRA’s Sachdeva expects the credit card penetration and usage of digital payments to continue rising. “Given the reach and popularity of UPI, the addition of more credit card networks on UPI platform would further increase the card spends,” he added.

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