Visa, a leading payment technology company, has established its dominance in India’s credit and debit card market, holding an estimated 60 percent of the market share. This translates to approximately two-thirds of the total volumes on credit and debit cards in the country, with nearly 300 million cards issued through various partner banks. In recent years, Visa has also expanded its reach through collaborations with fintech companies, further solidifying its presence in the Indian market.
In an exclusive interview with Moneycontrol, Sujai Raina, Vice President and Head of Business Development for Visa in India, discussed the evolving spending patterns of credit card users, the increasing popularity of co-branded cards, and the factors influencing customer preferences in card selection. The following are edited excerpts from the interview:
Spending Patterns of Credit Card Users Amidst the Pandemic:
The COVID-19 pandemic has triggered a notable transformation in the spending patterns of credit card users, particularly in terms of transaction channels. Historically, 60 percent of spending occurred through face-to-face transactions, while the remaining 40 percent was conducted via e-commerce platforms. However, our data indicates a substantial reversal of this trend since the onset of the pandemic. E-commerce transactions have gained significant traction and now account for the majority of spending, while face-to-face transactions have witnessed a decline.
Despite this shift, credit card usage remains prominent in various sectors, including e-commerce, lifestyle categories, dining, travel, and utility payments. Additionally, customers are increasingly relying on credit cards for non-traditional expenses such as house rent and education expenses, highlighting the versatility and convenience offered by these payment instruments.
The Rise of Co-Branded Cards:
One notable trend in the credit card market is the increasing popularity of co-branded cards. Co-branded cards are created through partnerships between credit card issuers, such as Visa, and businesses operating in different sectors. These partnerships allow for the development of cards tailored to specific customer segments, offering unique benefits and rewards aligned with their interests and preferences.
The introduction of co-branded cards has proven to be a strategic move, as it not only enhances customer loyalty but also drives customer acquisition for both the credit card issuer and the partnering business. By combining the strengths of two entities, co-branded cards enable the emergence of new categories and expand the scope of rewards programs, offering customers more value and customization.
Factors Influencing Card Selection:
When selecting a credit card, customers consider a variety of factors based on their individual needs and preferences. While rewards and cashback programs are widely appreciated, customers also value benefits such as airport lounge access, exclusive privileges at partner merchants, and enhanced security features. Moreover, the reputation and trustworthiness of the card issuer, seamless customer experience, and competitive interest rates and fees play a significant role in the decision-making process.
In recent years, fintech partnerships have played a vital role in expanding the range of available credit card options. Collaborations between established financial institutions and fintech companies have resulted in innovative card offerings, combining digital capabilities, user-friendly interfaces, and value-added features. These partnerships have facilitated the adoption of digital payments and increased financial inclusion, catering to the evolving needs of customers in the digital age.
Visa’s Continued Commitment to Innovation:
As the market leader in India’s credit and debit card sector, Visa remains dedicated to driving innovation and meeting the evolving demands of consumers. By leveraging partnerships and embracing emerging technologies, Visa aims to enhance the overall payment experience, provide seamless and secure transactions, and empower consumers to make convenient, informed financial decisions.
In conclusion, Visa’s strong foothold in India’s payment market, commanding a significant market share, has positioned it as a key player in the credit and debit card space. The pandemic-induced shift in spending patterns towards e-commerce has propelled the adoption of digital payments and presented new opportunities for growth. Furthermore, the popularity of co-branded cards reflects the industry’s focus on customization and customer-centric offerings. As the market continues to evolve, Visa remains committed to innovation, collaborating with partners and prioritizing customer satisfaction to maintain its leadership position in the dynamic Indian payment landscape.
