The number of credit cards in use in India has doubled over the past five years, while transaction value has nearly tripled, according to the Reserve Bank of India’s Payments System Report. The number of credit cards in circulation reached 10.80 crore at the end of December 2024, while transaction value stood at ₹20.37 lakh crore. As of December 2024, the country’s financial landscape is marked by the widespread adoption of credit and debit cards, with a staggering 109.9 crore cards in circulation nationwide.
India’s credit card landscape has undergone a significant transformation, with various banks employing distinct strategies to navigate the evolving market. According to a recent RBI report, the number of credit cards in circulation has more than doubled, reaching around 10.80 crore by the end of December 2024, compared to 5.53 crore in December 2019. In contrast, the number of debit cards has remained relatively stable, with a slight increase from 80.53 crore in December 2019 to just over 99.09 crore in December 2024.
Ubiquitous use of credit and debit cards
The Reserve Bank of India’s Payments System Report noted that the growth in credit card adoption has mirrored card transactions as well.
Credit card transactions witnessed a remarkable growth with the volume soaring from 208.67 crore in CY-2019 to 447.23 crore in CY-2024. Similarly, the transaction value has jumped from ₹7.13 lakh crore to ₹20.37 lakh crore during this period. This represents a five-year Compound Annual Growth Rate (CAGR) of 16.47% in volume and 23.37% in value. A major contributor to this rise has been the surge in online spending, which now accounts for nearly half of all credit card transactions.
The debit card sector has followed a similar yet distinct trajectory. While Public Sector Banks (PSBs) remain dominant, their market share has declined from 69.7% with 56.1 crore cards in December 2019 to 64.5% with 63.9 crore cards in December 2024. In contrast, Private Sector Banks have significantly expanded their presence, increasing their share from 21.3% (17.12 crore cards) in December 2019 to 25% (24.76 crore cards) in December 2024. This growth has been driven by enhanced value-added services and advancements in technological infrastructure. Although PSBs saw a 14% increase in debit card issuance over five years, the steeper 45% growth in Private Sector Banks’ debit cards has led to a decline in PSBs’ overall market share.
The report noted that Payment Banks and Small Finance Banks (SFBs) have also expanded their footprint. Payment Banks saw a slight dip in market share, from 7.03% with 5.66 crore cards to 7% with 6.94 crore cards. Meanwhile, SFBs witnessed notable growth, increasing their market share from 1.4% (1.16 crore cards) to 3.1% (3.03 crore cards) between December 2019 and December 2024, as they focused on providing low-cost, accessible banking solutions to underserved communities.
However, unlike credit cards, debit cards have seen a sharp decline in transactions. The transaction volume dropped from 495.32 crore in CY-2019 to 173.90 crore in CY-2024, while the transaction value fell from ₹6.83 trillion to ₹5.16 trillion. This translates to a five-year Compound Annual Growth Rate (CAGR) of (-)18.89% in volume and (-)5.48% in value, reflecting a shift in consumer payment preferences.
Dynamics of India’s Card market
As of December 2024, India’s financial landscape is characterized by widespread adoption of both credit and debit cards, with a total of 109.9 crore cards in circulation. Public sector banks (PSBs) saw a significant increase in credit card issuance, rising from 122.6 lakh at the end of December 2019 to 257.61 lakh at the end of December 2024, marking a 110% growth.
As per the report, Private Sector Banks (PVBs), who hold a 71% market share with 766 lakh cards in December 2024, have leaned into digital solutions and co-branded cards to cater to the urban and affluent customers.
On the other hand, foreign banks experienced a decline in both the number of cards issued—from 65.79 lakh to 45.94 lakh—and in market share, which fell from 11.9% to 4.3% over the same period. This decline may be attributed to high fees and more conservative lending policies.
Small finance banks (SFBs) have made their entry into the market, issuing 10.97 lakh cards by the end of December 2024, focusing on financial inclusivity by targeting underserved segments.
Despite their unique functions, both are increasingly challenged by the rise of advanced digital payment solutions. Since January 1, 2019, the RBI has mandated the use of EMV Chip and PIN-based debit and credit cards for enhanced security. Additionally, the scope of the Unified Payments Interface (UPI) has been expanded to allow linking of RuPay credit cards for payment transactions. Furthermore, UPI now enables transfers to and from pre-sanctioned credit lines provided by scheduled commercial banks, in addition to traditional deposit accounts. The report noted that UPI network will enable payments powered by credit from banks, potentially lowering the cost of these services and fostering the development of innovative products tailored to the Indian market.
Both credit and debit cards have evolved at different rates, catering to the diverse financial needs and preferences of the Indian population. Credit cards have emerged as the preferred choice for online spending, while debit cards remain essential for cash withdrawals and everyday transactions.
