Study reveals half of credit, debit cards in India inactive

According to survey data almost half of debit and credit cards in India are inactive may be because of insufficient resources in bank accounts and a holding of more than one card.

According to the survey done by Edgar, Dunn & Company (EDC) and India Cards Council (ICC) in contrast to UK and Australia where 90 per cent cards are active, in India there are only 56 per cent active debit cards. The study revealed, "There is a very low level of debit card usage at POS (Point of Sale) compared to other countries. For example: 26 per cent of active debit cards used at POS versus 86 per cent in the US and 45 per cent in Australia".

According to study, "The very low costs associated with new cardholder acquisition may indicate that insufficient resources are being applied to checking credit worthiness of applicants". It further added another reason possibly will be because of insufficient resources in cardholder’s bank accounts.

EDC informed debit cards are basically used for ATM withdrawals, to support cash-based transactions. Even in the credit card segment, India is having only 56 per cent active cards as against 80 per cent in Australia and 75 per cent in Singapore, the study revealed. EDC added in India the credit losses are also relatively high due to low level of transaction volume and value across the card base.