Credit card spending in Nov’24 fell by 16.1% M-o-M to INR 1.7 L Cr, reflecting a slowdown in demand following the festive season. Point-of-sale transactions decreased by 14% M-o-M, while online spending saw a steeper decline of 17.5%. This drop was anticipated due to the elevated spending levels recorded during the festive period in Oct’24.
Rising asset quality concerns are reshaping the credit card market. TransUnion CIBIL India reported a 14 basis point increase in accounts overdue by over 90 days, reaching 1.8%. Default rates are higher among new-to-credit customers, particularly from Tier-2 cities and smaller towns, adding stress to the system. Issuers are responding with preventive measures, including a focus on premium cards to attract reliable customers and stricter credit assessments to reduce default risks. Balancing growth in spending and issuance with rising asset quality challenges remains crucial for the market's stability.
The RBI has introduced a beneficiary account name verification feature for Real Time Gross Settlement and NEFT systems to enhance the security and accuracy of digital transactions. This feature allows users to confirm the beneficiary’s account name before completing a transfer, reducing the risk of errors and fraud. By ensuring the sender’s provided name matches the beneficiary’s account details, the system improves transaction accuracy and helps prevent unauthorized or incorrect transfers. Per the RBI's directive, this facility must be implemented by Apr’25.
The NPCI has removed the user cap on WhatsApp Pay for UPI services, allowing it to onboard its entire Indian user base immediately. Previously limited to 100M users, WhatsApp Pay can now leverage its 500M monthly active users to compete directly with Google Pay, PhonePe, and Paytm in the growing UPI market.
BharatPe has introduced 'Shield,' a fraud protection plan for secure UPI transactions. It covers risks like phishing, computer fraud, and unauthorized transactions due to phone loss. New users get 30 days of free coverage for transactions up to INR 5,000, with continued protection available at INR 219/month. Shield also allows claims for losses up to 10 days before reporting and offers 24/7 support via the app, chatbot, and toll-free helplines.
Leverage BFSI Pulse by 1Lattice to gain access to actionable insights!