He pointed to information asymmetry and the cautious approach of banks as contributing factors to the low penetration, particularly in underwriting for self-employed individuals, a substantial segment of India’s workforce. “A credit card is a type of unsecured loan, and banks need to feel secure prior to issuing one,” he clarified.
International travel has been a significant factor in boosting card utilization. As more Indians travel abroad for business, leisure, and education, they become accustomed to the convenience of card payments, especially in locations where cash is no longer feasible. “From duty-free shops to the London Metro, digital payments are now the norm, with cards being the preferred method,” Ghosh remarked.
In India, the rise of e-commerce and delivery services has also accelerated the adoption of digital payments. Ghosh noted that over 60% of card transactions are now “card-not-present”—encompassing online shopping, food delivery, and various digital services. “Digital payments are a matter of habit; the more you engage, the more comfortable you become,” he observed.
Enhanced card acceptance across India, driven by point-of-sale systems and affordable terminals, has played a crucial role. The pandemic served as a significant catalyst, encouraging even traditionally reluctant consumers to embrace digital payments and credit products.
Interestingly, today’s affluent demographic is not limited to metropolitan areas. “Many of the newly emerging affluent individuals are hailing from cities like Ludhiana, Agra, and Coimbatore,” Ghosh mentioned, pointing out that credit card spending in tier-2 and tier-3 cities has grown fourfold compared to the pre-COVID period, while tier-1 cities have seen only 1.5 times growth.
Furthermore, it’s not solely about transactions. The affluent class, particularly younger consumers, are increasingly seeking more than just cashback and rewards. “People are now looking for experiences, privileges, access, and benefits that are tailored to their aspirations,” Ghosh said. This transition from material rewards to aspirational experiences is influencing how financial services companies like Visa design their products and engage with consumers.
India is witnessing a “democratization of affluence,” where aspirations, access to digital resources, and experience-driven consumption are redefining affluence—extending far beyond income or geographic boundaries.
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