Mumbai: Foreign banks have seen their share of credit cards come down by a third in the last three years. In terms of value of transactions, their share has halved as that of private and public sector banks have grown.
According to data released by the RBI, foreign banks had 57 lakh credit cards outstanding as of March 2018. At that time, there were 3.8 crore credit cards in India, which gave the multinationals a market share of 15%. However, despite losing market share, the foreign banks had significant clout because of the higher value of transactions by their customers who spent more than the average cardholder. In 2018, the foreign banks had monthly card spends of Rs 10,380 crore — a 23.4% share.
Fast forward to March 2021, when the total market expanded to 6.2 crore cards while the number of cards issued by foreign banks stood at 66 lakhs, reflecting a market share of nearly 11%. It is not just in the number of cards that the multinationals have been losing ground. In terms of value of transactions too, foreign banks have a market share of 11.8% in the Rs 72,372-crore monthly volume.
While private banks have consolidated their market share in the card space, increasing their share from 63% to 66%, public sector banks have grown from 21.6% to 23.2% in three years. State Bank of India accounts for almost 80% of all public sector banks. Overall, SBI has 19% of the credit card market, which is still behind the 24% share of HDFC Bank.In global banks, four dominate the credit card space — Citi, Amex, StanChart and HSBC. These MNC banks have also played a pioneering role in the card business in India and they dominated the market in the ’90s. Citi’s decision to exit its retail business in India could further reduce share of foreign banks, should the portfolio be taken by a local player. Additionally, American Express faces a freeze on on-boarding new customers due to data-localisation norms even as more private banks are stepping in.
In 2018, American Express had 3% of the credit card market in terms of number of customers. But it accounted for 10% of all spending by credit card customers in India. In 2021, their share of cards shrunk to 2.5%, while the share of spending declined to 4%. Citibank, which had a 7% share of cards and 9% share of spend, saw these fall to 4% and 6%, respectively. HSBC has held ground better than others with a market share of 1.4% as of March 2021 (1.5% in ’18) and retaining its 1% share of total spend.





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