Payment Cards in India

2012-01-30
Published : Jan-2012

Report Summary

Payment Cards in India is a guide to one of Asia’s key growth payment card markets. The report provides statistics on market size, competitor market shares and forecasts. It also provides an overview of regulations, competitor activities, issuer strategy, product innovation, consumer segmentation and includes developments in contactless, mobile, and online payments as well as prepaid cards.

Highlights

Payment card transactions in India for the year 2010 totaled €191bn, of which pay now cards accounted for €178.7bn or 93.5%. Forecasts put the growth of the total value through payment cards at a compound annual growth rate of 25.7% over 2011–15f.

ICICI Bank and HDFC Bank are the two largest players and jointly hold 55% of the credit card market. Public sector banks are the largest players in India’s pay now card market. The three biggest privately owned banks hold 21.1% of the market share, whereas foreign-owned banks have the smallest share of the debit card market.

The online payment market in India stood at only €4.2bn in 2010, largely due to low Internet penetration in the country. Prepaid cards are a new concept in India and as such do not have a very large share in the payment card market, largely being targeted towards travellers in India.

Indian Payment Cards Market

Published: January 2012
Price: Single User License US$ 4495      Corporate User License US$ 11238

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Table of Contents

OVERVIEW
Catalyst
Summary

EXECUTIVE SUMMARY
Sizing and forecasting the payment card market in India
Competitor and product developments in India
Indian credit card consumer segments
Online, contactless, prepaid, and mobile payments

SIZING AND FORECASTING THE PAYMENT CARD MARKET IN INDIA
Key macroeconomic and consumer data
Macroeconomic trends and performance
Demographic and consumer trends
Sizing the payment card market in India
Size and performance of the payment card market
Trends in payment card use compared to other countries
Credit card balances outstanding, revolve rates, and repayment behavior
Forecasting the payment card market in India
Forecasting the pay now card market
Forecasting the revolving credit card market
Forecasting the charge card market

COMPETITOR AND PRODUCT DEVELOPMENTS IN INDIA
Overview
The competitive landscape
There are two types of payment card issuers in India
Nationalized banks
Private commercial banks and foreign banks
Key competitors
Public sector banks
State Bank of India
Punjab National Bank
Private sector banks
ICICI Bank
HDFC Bank
Axis Bank
Card issuer market shares and performance
Credit card market shares
Credit card branding and usage
Frequency of use by brand
Credit card product features
Leading revolving credit products and price points
Leading loyalty programs
Alliances and partnerships among consumer credit companies
Consumer satisfaction by credit card brand
Pay now card market shares
Charge card market shares
Citibank has the highest value of transactions in the charge card domain
Card scheme market shares and developments
Major card scheme developments
Pay now card scheme shares
Revolving credit card scheme shares
Charge card scheme shares

REGULATORY AND ACQUIRING ENVIRONMENT
Regulatory structure and key bodies
The launch of RuPay will increase the penetration of cards in India
Key institutions and players
Industry regulators: ReserveBank of India
Industry associations: Indian Banks’ Association
Other institutions: National Payments Corporation of India
Acquiring and processing landscape
Overview
ICICI Bank and First Data have entered into an alliance called ICICI Merchant Services
Atos Origin acquired Venture Infotek in 2010
Visa and MasterCard develop an electronic payments solution for Aadhaar holders

INDIAN CREDIT CARD CONSUMER SEGMENTS
Overview
Understanding consumer profiles provides opportunities for issuers to gain market share
Datamonitor has defined two Indian credit card profiles
Over a third of Indian credit card users revolve their balances
Attracting new consumers should not be a major challenge for issuers as almost one third of credit card holders are likely to change cards
Around 35% of credit card holders are likely to change their card
More than 80% of card holders are unlikely to switch because the card meets their needs
Issuers are most likely to attract new consumers by offering cards with low interest rates
Traditional distribution channels such as branches and shops are decreasing in popularity, in favor of online and post
Online credit card applications are the second most preferred mode
Both revolvers and transactors are undersupplied in terms of low interest rate credit cards
Attracting a greater number of consumers can be achieved by offering low interest rate cards
Most transactors want low interest rate cards, while only 14% currently have one
Almost 50% of revolvers want low interest rate cards, while only 15% have one

ONLINE, CONTACTLESS, PREPAID, AND MOBILE PAYMENTS
Overview
The online payment market in India was valued at an estimated $5.6bn in 2010
India is the smallest market in terms of potential value
The average online spend per person is lowest in India
In India credit cards account for the largest share of online transactions, in line with global trends
The value of online payments made with debit cards in India is below the global average
Mobile remains at an early stage of development
Citigroup has undertaken high-profile trials of NFC in India
The Interbank Mobile Payment Service has been launched by all major Indian banks
In 2011 Monitise launched its first mobile money application for Standard Chartered in India
State Bank of India entered into a joint venture with Bharti Airtel in 2011
Prepaid is a new concept in India with scope for growth
ReserveBank of India classes prepaid under four categories
Recent developments
Axis Bank achieves $1bn (€754.8m) in total value loaded onto Visa Travel prepaid cards
Citibank, in association with Visa, launches the Platinum Travel Prepaid Card
ICICI launches the ICICI American Express Prepaid Travel Card
Axis Bank announces the launch of a prepaid Visa card
Contactless payments represent a $216.5bn opportunity in India
India offers the third largest opportunity in Asia Pacific
Convenience stores offers the biggest opportunity for contactless payments

APPENDIX
Supplementary data
Definitions
Credit card
Card verification value
Debit card
Point of sale (POS) terminal
Prepaid card
Stored value card
Zero liability
Methodology
Further reading
Ask the analyst
Disclaimer

List of Tables & Figures

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