Some of India’s big retail chains have reported that credit and debit card payments are overtaking cash in India’s major cities.
Future Group, Shoppers Stop, Spencer’s, Wills Lifestyle, John Players, Woodland, Next and The Mobile Store said credit and debit card payments have consistently surpassed cash payments this year, showing a shift in consumer behaviour.
Chief economist at Care Ratings, Madan Sabvanis, said: "Plastic money has the advantage of convenience and safety. There is, hence, a reduction in the cost of printing money.
"It also leaves an audit trail, which helps track large volume transactions. This controls the growth in the black economy too."
The Shoppers Stop and Future Retail’s Central and Brand Factory outlets said sales by card now account for almost 55% of the total, while at Woodland, payments on plastic account for almost 52%.
At food and grocery chains such as Spencer’s Retail, cards cover 52% in city stores and at Big Bazaar and Food Bazaar, they account for 40% of transactions.
Merchants said consumers tend to spend more when they were using cards than cash.
At Wills Lifestyle, the transaction value was 20% higher, while at Future Retail it was 25% more. The average purchase value through credit and debit cards at The Mobile Store was twice that of the corresponding cash value at INR16,000 ($256).
Kumar Rajagopalan, CEO of the Retailers Association of India, said: "As inflation goes up, the amount of money required for a transaction will go up, thereby only increasing the popularity of cards."