Debit, credit card use climbs back to pre-COVID level; consumer spending rises amid layoffs, salary cuts

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Debit, credit card use climbs back to pre-COVID level; consumer spending rises amid layoffs, salary cuts
Debit, credit card use climbs back to pre-COVID level; consumer spending rises amid layoffs, salary cuts

Value of transactions through credit and debit cards have reached pre-COVID levels after witnessing a major drop in April. The same has jumped 111% in June as compared to April this year.

Value of transactions through credit and debit cards have reached pre-COVID levels after witnessing a major drop in April. The same has jumped 111% in June as compared to April this year, when India was under one of the strictest lockdowns in the world due to the coronavirus pandemic, according to the data by the central bank. Transactions using debt and credit cards soared to Rs 1,05,266 crore in June, more than double the figures of Rs 49,807 crore in April, latest data available with the RBI said. Card use fell from Rs 1,15,877 crore in March as trade and business were brought to a grinding halt amid the pandemic

The jump in transactions via debit and credit card indicates a pick up in consumer spending after crashing during the lockdown period. In fact, cash withdrawals through ATMs have also witnessed a rise by Rs 1 lakh crore in two months, the report added. On an individual basis, credit card transactions rose from Rs 20,765 crore in April to Rs 42,773 crore in June; and debit card use hiked from Rs 29,043 crore to Rs 62,494 crore. The total value of card transactions in May stood at Rs 80,274 crore.

While many people have borne the brunt of layoffs and salary cuts, the same has not deterred them from starting spending. “Consumers have started spending money amid layoffs and paycuts. People are now going digital to make payments. The rise in card transactions at POS terminals indicates spending is slowly returning to normalcy,” The Indian Express cited a banking source as saying. However, with rising cases all across the country and with states implementing localised lockdown, the situation is unlikely to improve further, the source added.

Meanwhile, the RBI data shows that the credit transfers, including NEFT and IMPS, have also arisen to Rs 24.19 lakh crore in June from Rs 20.18 lakh crore in May and Rs 16.87 lakh crore in April.

Source:- https://www.financialexpress.com/industry/banking-finance/debit-credit-card-use-climbs-back-to-pre-covid-level-consumer-spending-rises-amid-layoffs-salary-cuts/2054874/

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