While trends point towards a 35-50% jump in the total number of transactions this year against the festive months of last year, a significant chunk of the payments was through credit cards, EMIs (equated monthly instalments) and pay-later modes.
“Between October 3 and 12 this year, our platform saw a remarkable 106% increase in credit card transactions and a 60% rise in UPI transactions compared to the Navratri season last year,” said Rahul Kothari, chief operating officer at Razorpay, which offers omnichannel payment capabilities to merchants.
Amazon Pay, the fintech offering from the ecommerce giant, observed that around 20% of the purchases were made with EMI and 80% of EMI transactions were no-cost ones. In no-cost transactions, the brand subsidises the cost and consumers do not pay anything extra on instalments.
People bought video games like PlayStation 5 on no-cost EMIs through Amazon Pay.
“Over one in four customers used Amazon Pay instruments—Amazon Pay UPI, Amazon Pay ICICI Bank Credit Card, Amazon Pay Later, and Amazon Pay balance to shop (during Amazon Great Indian Festival),” Amazon Pay chief executive Vikas Bansal said. Using the platform for recharges and bill payments, meanwhile, has increased 30% from a year earlier, he said.
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“The use of credit cards has shown the highest growth, with 53% more transactions processed compared to the previous year. This demonstrates a notable increase in the use of credit cards,” said Sheik Mohideen, executive vice president, Worldline India, a major deployer of point-of-sale terminals for banks.
As per central bank data, the number of credit cards issued in India was 105 million as of August.
Lifestyle, fashion and electronics emerged as the major sectors driving the jump in the usage of credit cards.
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Bengaluru-based Innoviti Technologies, which provides digital transaction services to organised retail outlets like Shoppers Stop, Pantaloons, Reliance, Tanishq said there was a 62% jump in value terms for credit card usage in the electronics category in this year’s Navratri week, compared with the year prior.
For fashion and lifestyle, Innoviti reported growth of 11%.
“Discretionary spends on credit cards have been higher than expected this year,” said Innoviti Technologies CEO Rajeev Agrawal.
One of the reasons for the greater use of credit cards was the absence of debit card EMI products which are usually run by large banks during festive season sales, Agrawal said.
“Many of the banks could have converted customers with major credit lines on their debit cards into proper credit card customers, which would have helped,” he said.
On a macro stage, while credit instruments did show a steady increase, the overall leader in the payments game continues to be Unified Payments Interface-based transactions.
According to data shared by the National Payments Corporation of India, since the beginning of October, UPI has been recording more than 500 million transactions daily. This number was around 380 million on average last year. UPI adoption has gone up 34% year on year during the festive week.
On October 10, 558 million UPI payments were recorded, settling around Rs 83,000 crore worth of transactions.
“Our gross transaction volume processed has grown 44% compared to last year. In terms of payment instruments used, our data indicate 34% growth in UPI collect transactions and 46% growth in UPI intent transactions,” said Mohideen of Worldline India.
