How credit card issuers can gain from machine learning
Leveraging AI for enhancing credit cards value proposition as well as lending and payments functions now can reap several benefits
India has witnessed a strong growth in credit card adoption – 39 million cards were in circulations at the end of June 2018, up 25% year-on-year. While consumers continue to see credit cards as a convenient way to extend their purchasing capacity, with the ongoing payments’ disruption, the plastic credit cards as we know today, may not be part of the payments’ future. Take the case of UPI 2.0, which allows merchants to leverage overdraft facility as well as block funds in the customer’s savings account for future usage, in many ways functioning like a credit card. Or online retailers trialing debit cards for EMIs and “pay-later" platforms that offer instant credit at checkout. Add to this the fast adoption of digital wallets that continue to push conventional payment instruments in the background. People may still link their wallets to credit cards, but issuing banks will lose some of their brand appeal and crucially, a direct access to customer spending data.