SBI Card: Big Push To Acquire Millennial Customers

Customer base crosses 9 mn, grows faster than industry. Hardayal Prasad, MD and CEO of SBI Card, outlines the growth potential:

Ravi Lalwani: What is the retail and corporate credit card penetration in India and how has it evolved over the last 3 years?

Hardayal Prasad: Credit card penetration in India has significantly increased over the past few years. This is evident from the fact that credit card numbers increased from 29.8 million in March 2017 to around 47 million in March 2019, as per RBI. There have been several factors that have propelled this growth, which include increased card acceptance infrastructure, improved purchasing power of consumers, new technologies, greater security, government’s push towards digitization, and most importantly, growing popularity of eCommerce. We have observed an increased acceptance even among consumers in tier 2 and 3 cities.

However, I feel that there is still a large potential for growth in India. While the industry growth rate has been in double digits, the card penetration in India remains at a considerably lower level when compared to other Asian countries. As per 2017-18 data from Bank for International Settlements, the card spends in India stand at around 3% of GDP whereas Hong Kong and Korea have remarkably higher percentages - 25% and 37% respectively.

Noticing the recent past trend, card usage will continue to grow as more and more consumers discover the convenience and various tangible benefits of card payments. In fact, at SBI Card, we have introduced products such as SBI Card ‘Unnati’ for first-time credit card users, which has further helped us in increasing credit card penetration in India.

Has the economic slowdown impacted credit card business in India? For the industry and for SBI Card?