The rise of ecommerce in India has pushed consumers towards the plastic money.
"Ecommerce has to be one of the reasons for the uptick in credit and debit card sales today. Use of cash will come down significantly and this could lead to potential transformation in the Indian economy," said Soumya Kanti Ghosh, chief economic advisor at SBI. He said that with increased usage of cards, the cost of printing money comes down and banks save on maintaining and manning thousands of ATMs and the trail left after every transaction is more visible.
There was a 16.3% increase in the use of debit cards in FY15 from a year earlier and a 21.3% jump in credit cards by volume, according to Reserve Bank of India data. The value of debit card transactions shot up 14% in FY15 and that of credit cards surged 23%. The rise in usage is not just in the metros but in tier-II and tier-III cities as well.