New Delhi: Debit card usage in November fell from the previous month’s levels, according to the central bank data released on Tuesday night, while payments via mobile wallets, mobile banking and credit card usage rose in the same period.
Debit card volumes fell 16.58% from 942 million in October to 808 million in November, according to Reserve Bank of India (RBI) data on payment and settlement systems. In the same period, credit card usage rose 10%, from 89 million to 98 million. An industry expert said debit card usage fell because people preserved money.
“People have naturally cut down their spending post-demonetisation and are trying to preserve money for the time being. Also, the inconvenience that it is causing them to wait in long lines outside automated teller machines (ATMs) is also another cause of reduced usage of debit cards," said Naresh Makhijani, partner and head, financial services, KPMG.
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Mobile wallet usage surged 38%, the highest among all available payment options, while mobile banking usage grew almost 9% in the same period. “Many people who earlier did not have the mechanism to pay are part of the wallet customer base; hence there has been such a growth," said Bipin Singh, co-founder at Mobikwik, a mobile wallet company. Makhijani also pointed out that getting a credit or a debit card is a very long process so people who always used cash found it easier to switch to wallets.
In terms of value of transactions, credit and debit cards as well as Immediate Payment Service (IMPS) have shown a decline. Wallets too have shown a stagnation in terms of value. Mobile banking has stood out though, witnessing a surge from Rs1.13 trillion to Rs1.37 trillion from October to November 2016.
“It is a psychological change that we observed in November but things did improve December onwards. The idea was always to have a longer impact on the digital payments front," said Naveen Surya, managing director, ItzCash Card Ltd, and chairman, Payments Council of India (PCI).