Summary:

Over the last two years, Indians have spent more on overseas credit cards than on prepaid payment instruments (PPIs) and debit cards combined. This trend, fueled by increased travel following COVID-19 and attractive reward points, has continued despite a 20% tax on international purchases. Data shows that credit card spending increased by 63%, compared to 53% for PPIs and 8% for debit cards.

Mr. Ananth Babu, Head of Cards and Payments at CSB Bank, noted that banks prefer credit cards because they generate more interchange revenue from international transactions, including dynamic currency conversion and foreign exchange mark-up rates. Attractive rewards also drive customer preferences. Mr. Sanjeev Moghe from Axis Bank emphasized the convenience and widespread acceptance of credit cards. While PPI usage has risen, this growth is expected to slow. UPI's international expansion is set to increase market share and offer more competitive rates.

Source: IBEF 

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