Mumbai | The third largest private sector lender Axis Bank has said smaller centres are outpacing the top eight cities in its credit cards business, fuelled largely by the e-commerce boom.
Earlier, credit cards penetration was limited to what we classified as top eight cities. But now, over half of our growth is coming from smaller cities and towns, the bank’s Head, Cards and Merchant Acquiring, Sangram Singh said.
He further said such smaller centres have contributed to 60 per cent of the incremental growth in cards and 50 per cent of growth in spends during 2015-16, compared to the previous fiscal. A large part of the spends is coming from the e-commerce segment, Singh said, adding this is not surprising as the booming online sellers have been deepening their reach beyond the metros.
He, however, was quick to add that the bank is also witnessing a spurt in spends at retail stores, with more supermarkets being set up. The bank has been distributing credit cards from nearly all its branches and does not have a separate proposition for the smaller centres, he said, adding a bulk of its credit cards come with annual fees.
Data released by RBI last week said Axis Bank had 24.13 lakh cards at the end of March and witnessed over Rs 2,096 crore of transactions at ATMs and points-of-sale (PoS) terminals in the month.
The total numbers of credit cards in the country rose over 16 per cent to 24.5 million as of March-end, as per RBI data. Singh said the bank has closed fiscal 2015-16 with a growth of 40 per cent in cards and 47 per cent in spends, as against 16 per cent and 27 per cent, respectively, for the industry. He said the bank hopes to maintain this growth to grow its market share and added that at the end of March, it was fourth largest by number of cards and fifth by spends.
While a bulk of the cards are sold internally to the bank’s own customers, it also sells to outside customers in the premium category, he added. The bank is finalising a tie-up with the Tata Group-backed carrier Air Vistara for launching a new proposition, he said.
He said the bank has deployed 50,000 near-field communication (NFC) capable PoS machines in the last six months, which is half of the total such devices in the market at present.
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