Credit card spending rises in smaller Indian towns

Spending on credit cards in smaller towns in India has significantly increased, according to a new report from Visa. This trend shows that not only are more people using credit cards, but they're also spending larger amounts. The number of credit card users in tier II and tier III towns has quadrupled, with many users spending over ₹2,00,000 annually on their cards. The rise in spending is linked to the growing availability of online shopping and digital payment options. Ramakrishnan Gopalan, Visa's Head for Product in India and South Asia, explains that increased access to e-commerce and digital wallets, along with rising awareness from global travel, are key factors driving this change. People are spending more on lifestyle products, online gaming, and dining. India’s contactless payment landscape is evolving positively. Between 2018 and 2021, major cities saw high contactless transaction rates, and this trend is now spreading to smaller towns. Gopalan notes that 76% of consumers expect contactless payments to increase as technology becomes more integrated into daily life through devices like mobile phones and smartwatches. Innovations like biometric payment authentication are enhancing security as well. Despite the growth, there are still gaps to fill in India's payment ecosystem, such as the absence of Apple Pay. Gopalan mentions that expanding acceptance of contactless payments among merchants is essential for making these options widely available. Security is also a major focus, as Visa invests heavily in technologies to secure transactions and prevent fraud. Visa has been proactive in promoting digital literacy and security awareness among users. They have partnered with various educational campaigns aimed at informing consumers about safe payment practices. Additionally, their Digital Village Adoption program aims to improve payment security awareness in rural areas, particularly among women. Looking ahead, Visa plans to enhance its contactless payment offerings further. They are focused on integrating secure payment options across various devices and working with partners to support small businesses. Their tech hub in Bengaluru is crucial for developing innovative payment solutions that could be relevant globally.