The festive season in India is generating enormous excitement this year. Shoppers are flocking to Amazon and Flipkart to avail of “Deals”. With each of these sales events, digital payments hit new heights. For the first time ever, the credit card online spend exceeded 1.2 lakh crore rupees in September.
Amazon has kicked off its Great Indian Festival sales. Flipkart has introduced its Big Billion Days. Both of these e-commerce sales events are driving enormous purchases online, before and during the auspicious Navratri holiday beginning on September 22. This sets off the traditional wave of discounts on e-commerce platforms and, with the lowered GST rates, contributes to the excitement of the season.
On September 22, India reached an unprecedented spending day of over 10,000 crore rupees per day for credit card spending. Customers went to the extremes to stock up with electronics, clothing, and gadgets. The rush does not seem to be slowing down.
By September 26, total spending has exceeded 1.03 lakh crore, approaching the previous all-time high from last October of 1.06 lakh crore. There are still four days to spend within the month. Experts expect September will exceed all previous records. Families are preparing for the festival of Diwali, among others.
As is usual in festive seasons, credit cards are reigning in those purchases. Consumers are utilizing credit cards more than ever to make that next big purchase. In addition, offers are tempting people to spend even more for the most part free. Banks are offering their own offers for even better value from their partnerships with e-commerce.
The use of debit cards made less of a dent online. September saw spend only toeing the 11,000 crores mark. This is down from the 14,300 crores of a year earlier, in the month of October. Customers bypassed debit cards in exchange for better and bigger incentives on credit cards.
The normal winding down of transactions took place, but we did see UPI transactions loll slightly during the sales period. The figures began at a healthy 670 million transactions/day, but dipped to 640 million during the busy period.
Similarly, total volume dropped from 1 lakh crores per day to 80,000 crores in transaction value.
Experts are relaxed about this stall in UPI. The large network can process transactions in the order of billions seamlessly. A stall rarely affects it’s position. UPI will remain the preferred mode for micro-transactions.
The stats can be largely attributed to the amount of push that co-branded credit cards are pushing on eCommerce sites. The retail offering their customers discounted offers down price along the terms of cash back. Even the most modest savers, save big.
Fintechs have capitalized by encouraging new uses of RuPay cards by linking them to UPI. Spending is simple and rewarding.
Customers used credit for their larger baskets more than previously. The whole tenor of the financial commitment has changed. The buy at going away options spread the cost for monthly repayments to be easily secured. No one wants to drain their savings in the current climate.
There was joy in every city. Rural areas also engaged in the frenzy of online purchases. It could be seen in delivery vehicles driving every available street. Sellers that previously had concerns about demand also reported unprecedented spontaneous stacks of orders.
The numbers signify a relative growth feed of becoming larger. Diwali could two to three times the numbers.
Digital India has said before, never ever; more digital; this is only going to grow.
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