Credit card buys seen 8% lower in Apr-June quarter, say analysts



spends appear to have recovered in June judging by trends, compared with a 7 per cent month-on-month decline in May because of the second wave of the Covid-19 pandemic.


On a quarterly basis, however, analysts expect spends to be 8 per cent lower in the first quarter of financial year 2021-22 (Q1FY22) than in Q4FY21.





According to a report by ICICI Securities, at the systemic level, the impact of the second wave on and other payments was much lesser than during the first wave, and recovery, too, has been faster. Notwithsta­nding the sequential decline, at Rs 54,700 crore credit card spends in May were still higher than the monthly spends between April and September 2020, indicating that the impact of the second wave was not as severe as in the first wave. In April, credit card spends totalled Rs 59,200 crore, higher than the monthly spends witnessed between April and September of 2020. Analysts expect June to be better than May in terms of credit card spends, given the fact that Unified Payments Interface (UPI) witnessed a 12 per cent month-on-month growth in June, after a slump in May, and average daily PoS/e-co­mmerce spends were 22 per cent higher at Rs 1,600 crore, compared with Rs 1,300 crore in May. “We continue to see sequential growth of 22 per cent in June 2021, based on trends seen in average PoS and e-co­m­merce spends,” said ICICI Securities.


Credit card buys seen 8% lower in Apr-June quarter, say analysts


Among players in the credit card segment, HDFC Bank, despite a ban on issuing new credit cards, retained a sizeable, and, perhaps, the lar­gest market share in spends, at 27 per cent in May. SBI Cards has grabbed a market share of 18 per cent. Almost all modes of payments witnessed a drop in May because of the second wa­ve, as induced strict localised lockdowns were imp­osed in almost all parts of the country. But, as the number of infections started declining and the economy started opening up, digital payments also picked up from the slump and posted significant sequential growth.


In May, UPI processed 2.53 billion transactions, down 4.16 per cent and 7.32 per cent from April and March, respectively. In value terms, UPI saw transactions were worth Rs 4.9 trillion, down 0.66 per cent and 3 per cent compared with April and March, respectively. But UPI touched a record high both in terms of volume and value of transactions in June. The platform recorded 2.8 billion transactions worth Rs 5.47 trillion in June, up 10.6 per cent in volume terms and 11.56 per cent in value terms over May. Bharat Bill Payment Systems also saw a 16 per cent month-on-month rise in the volume of transactions in June to 45.47 million, amounting to Rs 7,934.71 crore. Imm­ediate Payment Ser­vice saw an 8.55 per cent rise in volume of transactions in June over May to 303.76 million am­o­unting to Rs 2.84 trillion.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link

Free Course

"Double Your Traffic in 30 days" + Secret Bonus

valued at $299

This amazing course will teach you, step by step, how to double if not triple your traffic over the next 30 days.

100% Privacy. We will never spam you!