Bankers are expecting a 25-30 per cent rise in spends on debit and credit cards this festive season.
Typically, consumers have a higher propensity to spend during festival seasons and banks latch on to this opportunity by introducing offers on various products and services.
According to figures available on the Reserve Bank of India Web site, there are close to 25.5 crore debit and credit cards in circulation as on March 31, 2011. And the spends amount to Rs 1,14,205 crore.
The festive season accounts for close to 60 per cent of the spends on cards, said a senior bank official.
Discounts, rewards
With consumers owning multiple cards — whether debit or credit — competition drives banks to introduce lucrative schemes to push up spends on their cards. “Banks always want to encourage card over cash so they introduce cash discount to customers swiping their card at merchant outlets,” said a senior official at IDBI Bank.
Apart from cash discounts, banks also offer several rewards by way of a foreign trips, offer on white goods, and so on. IDBI Bank, for instance, had last year rewarded its top five or six spenders by sponsoring a trip and tickets for five Euro Cup matches. “We have not yet firmed up our plan for this festive season. It will be rolled out soon,” the IDBI official said.
With a number of retailers coming up with off-season sale, there has been a rise in spends on credit cards during the pre-festive period, said Mr Parag Rao, Business Head, Credit Cards and Merchant Acquiring Services, HDFC Bank. “Despite this, we witness a definite spike in spends to the tune of 20-25 per cent during festive season,” he said.
ING Vysya Bank expects 45 per cent rise in spends on cards this festive season over last year, said Ms Sonalee Panda, Marketing Head of the bank. “The increase in spends will be across various categories such as apparel, consumer durables, travel and gold,” she said.
Dhanlaxmi Bank is running a ‘Swipe n Fly' campaign on its debit cards, under which customers are offered prizes, said Mr Salil Datar, Head-Branch Banking and NRI Business of the bank.