Plastic money growth in India fastest in Asia

The plastic money culture seems to be spreading fast if the total transaction volumes through cards (both debit and credit) in the country for 2002 is anything to go by. Transaction volumes include both cash withdrawals and purchases made through such cards.

Total transaction volumes have rocketed 103 per cent to $4.201 billion (over Rs 19,400 crore), making India the fastest growing market in Asia Pacific.

The comparative figures for 2001 when the Indian market rose by 69 per cent was at $2.277 billion.

The debit card scene in India is also shifting more towards Visa International. Visa's debit card  --  Visa Electron  --  has cornered 68.5 per cent of the total transaction volumes in debit cards in 2002.

According to the latest Nilson Report, India has gone up in the rankings by one notch and is now the eleventh largest market in Asia Pacific.

However, the total purchases through cards rose by only 31 per cent to $1.802 billion. India has a long way to go compared with other Asian countries both in terms of total transactions and purchases.

South Korea, the market leader in Asia Pacific, has shown a 39 per cent rise in transaction volumes to $296.139 billion and a 48 per cent rise in purchases in total purchases to $104.589 billion.

It is followed closely by China, which has, however, seen a fall in total volumes of 8 per cent to $208.283 billion.

However, the figures do not include the volumes of Cirrus and Maestro - the debit card issued by MasterCard.

The total number of debit cards issued in the country for the period was at 82.99 lakh (8.299 million). Of this Visa Electron issuances were 49.13 lakh (4.913 million), while Maestro issuances were 33.86 lakh (3.386 million).

The total volumes through the debit cards for the country stood at $3.550 billion of which Maestro volumes were at $1.115 billion with the remaining volumes with Visa.

However, the purchases through debit cards in the country were much lower at $103.6 million.

This could be because, debit cards in the country are still primarily used as ATM card for withdrawal purposes rather than for purchases.

This is more so among the customers of the public sector banks than for the customers of the foreign banks or the private sector banks. Also banks are now issuing debit cards in lieu of  ATM cards thus propping up the figures.

The total volumes of Visa and Visa Electron in the country for fiscal 2002 has shown a growth of 138 per cent to $3.724 billion, while the purchase volumes have increased by 36 per cent to $1.137 billion.

The total volumes for MasterCard has shown a rise of 20 per cent to $787.7 million while purchases had increased by 22 per cent to $665.6 million.

The major issuers of Visa Electron cards are ICICI Bank and HDFC Bank while for Maestro the major issuers are State Bank of India and Citibank.