There has been a consistent rise in income in India’s semi-urban and rural markets and this provides a great opportunity to the banking industry to augment the size of the country’s credit card market. Keeping a close eye on these developments, Axis Bank is aiming to capture a greater share of the burgeoning market, according to a top company official said on Monday.
India is witnessing rapid growth in consumer spending and by 2026, it is expected that two out of every three transactions will be via digital modes of payments, Axis Bank Managing Director and Chief Executive Officer Amitabh Chaudhry said.
“India is headed for interesting times, it is one of the fastest growing economies in the world and is well on the journey to becoming a USD 5 trillion dollar economy. Also, we have been seeing some rapid fundamental shifts, especially in the banking and financial industry like consumerism and disruption etc.
“And that is why large private banks like us have made investments to improve their operations and modernise the technological architecture. Also, I believe the real differentiation would come from being distinctive and developing exclusive customised products led by innovation,” Chaudhry said on the launch of the co-branded credit card with Samsung and payments solution provider Visa.
There have been numerous efforts from the central government and RBI to make India a digital economy, he said. The RBI’s announcement to launch a central bank digital currency and innovations such as UPI payments are steps in the same direction.
All these along with simplified customer onboarding, a higher degree of customer awareness and greater acceptance further reinforce the opportunity for the industry, the official said.
The country’s third largest private sector bank by asset size has a 16 per cent market share in UPI transactions and 22 per cent in UPI P2M (payments to merchants).
In the credit cards business, it is the fourth largest player with over 17 per cent incremental market share in the last six months and 12 per cent at the end of the first quarter ended June this fiscal.
The bank’s credit cards acquisition during the June quarter was up four times from a year ago at about 1 million (10 lakh) cards.
Sanjeev Moghe, President & Head-Cards and Payments, Axis Bank, reasoning the tie-up with Samsung said it is one of the biggest names in the industry and the bank has always prioritised innovations and new stuff.
“Look at the products Samsung has, they have an overall brand innovation, it is one of the biggest…They are big in both consumer durables and handsets and that’s how we chose Samsung,” Moghe said.
Even as the bank has set some internal targets for acquiring new customers through this co-branded card that hits the market right at the onset of the festival season, Moghe said “We have some internal targets but that’s not something we are putting out. We believe the space and the opportunity over here are equally big and we will wait and see how the consumer response is”.
On being asked about the price proposition, especially in the tier II and III kinds of markets, the officials said there is no dearth of capital among Indians. People have aspirations and they are willing to spend.
“We believe there is enough wealth with lots of people across India and that’s why we have launched two types of cards,” Moghe added.
Ken Kang, President and CEO, Samsung South-West Asia, said the launch of this credit card is the company’s next big India-specific innovation that will change the way customers buy Samsung products and spend on services through a series of industry-leading features.
HDFC Bank is the number one player in the credit cards business followed by SBI Card and ICICI Bank.
Source: Economic Times (With PTI inputs)