Synopsis: According to data and reports from ICICI securities, the second wave made very less impact on credit card spends when compared to the first wave.
Credit card spendings seem to have recovered in June judging by trends, compared with a 7% month-on-month downtrend in May because of the second wave of the Covid-19 pandemic.
Quarterly, however, analysts expect credit card spends to be 8% lower in the first quarter of the financial year 2021-22 than the other four quarters of the financial year 2021.
Following the report of ICICI securities, the second wave of Covid made comparatively less impact than the first wave for the usage of credit cards. It depicts that the recovery was also faster from the second wave when compared to the first wave.
As per the data, spending made in May 2021 was Rs.54700 crore which is higher than all monthly spending between April-September of 2020. Hence we can conclude that the impact of Covid was not as severe as the first wave. Unified Payments Interface(UPI) has seen 12 % growth from May 2021 to June 2021.
Also, data indicates that the consumption on E-commerce websites also increased, from Rs.1300 crore in May to Rs.1600 crore in June.
Among all the credit card segment players in the market, HDFC Bank is leading the market with a 27 percent market share even though they received a ban on issuing the new credit cards. Next SBI cards hold a market share of 18 percent.
Due to the second wave of Covid, all modes of payments have seen a dip mainly because of strict local lockdowns imposed in the country.
In May, UPI clocked 2.5 billion transactions when compared with April it is down by 4.16 percent and 7.32 percent compared to March. Since the recovery of the economy was fast UPI clocked the highest transactions of 2.8 billion.
Bharat Bill Payment Systems saw a 16% month-on-month rise in the volume of transactions in June to 45.47 million, amounting to Rs 7,934.71crore. Immediate Payment Service saw an 8.55% rise in the volume of transactions in June over May to 303.76 million amounting to Rs 2.84 trillion.
