Have you noticed a change in the way you pay for online shopping? It’s not just you. The Unified Payments Interface (UPI) has taken the spotlight, and debit cards are playing second fiddle. Let’s break down what’s happening.
The Online Shopping Boom
So, online shopping is booming, right? That’s a big reason why debit cards are taking a backseat. The Reserve Bank of India tells us that in September, the number of people using debit cards to buy stuff online dropped to 51 million. Compare that to 117 million in April the year before.
And the money spent with debit cards? That went down by 23% from Rs 21,000 crore in April 2022 to Rs 16,127 crore in September 2023. That’s a pretty big drop.
UPI: The Star of the Show
Why are people choosing UPI instead? Well, it’s all about convenience. UPI makes it super easy to pay for things with just a few taps on your phone. Debit cards, on the other hand, make you type in lots of numbers and can be a hassle.
Credit Cards Are Back
But here’s the twist: Credit cards are actually making a comeback. India now has around 93 million credit cards, used by more than 50 million people. In the world of online shopping, credit card payments went up by 22% in September, reaching 131 million transactions.
That’s not all. The total amount of money spent using credit cards also shot up to Rs 92,878 crore from Rs 65,652 crore.
Experts Weigh In
Reeju Datta, who works at Cashfree, a payment company, says that UPI is now the favourite way to pay, leaving debit cards and Internet banking behind. Credit cards, however, are still going strong.
Manas Mishra, who’s the Chief Product Officer at PayU, adds that UPI makes paying easy. All you need to do is scan a code with your phone, and you’re done. Plus, UPI keeps coming up with cool new features that make it better than using cards.
What’s Driving the Change
Why is this happening? Well, banks are disabling a bunch of debit cards that people aren’t using. That’s making more folks switch to UPI. And the government is really pushing for UPI, too.
Merchants love it because they don’t have to pay as many fees when you use UPI. They get a good deal.
Also, credit cards are offering special deals where you can pay for your stuff in easy instalments, and that’s getting people interested.
The Bigger Picture
Okay, here’s the thing. While this change doesn’t really matter to you, it’s a big deal for big companies like Visa and Mastercard. They make a lot of money from credit cards. But with more people using debit cards, they’ve got to rethink their game plan.
So, what’s the bottom line? UPI is taking over as the number one way to pay for stuff online. It’s quick, easy, and the government is all in. Debit cards are slowing down, but credit cards are still holding their own. The way we shop online is changing, and UPI is leading the way.
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