NEW DELHI: The impact of the second wave of Covid-19 on consumer spending has been significantly lower than during the first, with credit card spending in the country witnessing a 31 per cent jump in June so far, according to data from card networks. The current trend of spending points towards a higher level that during all the months of 2020-21, except March, which is a seasonally strong month.
Analysts say that the easing of localised lockdowns and other curbs in June may be helping to boost consumption and payment transactions.“The overall estimated impact of Covid second wave is significantly lower than the first on account of better preparedness to manage all business functions digitally and rolling nature of lockdowns.
Based on trends of settlement data of card networks, we estimate Rs 56,000/Rs 65,000 crore for May/June 2021. This translates into a total industry credit card spend estimate of Rs 1.8 lakh crore in Q1FY22,” wrote analysts at ICICI Securities.
According to data released by the Reserve Bank of India (RBI), the transactions made through the Immediate Payment System (IMPS), Unified Payments Interface (UPI), debit and credit cards as also cash withdrawals, increased in June over May.
UPI transactions increased 13 per cent in volume terms to 1.74 billion and in value terms by 11 per cent to Rs 3.87 lakh crore. IMPS volumes rose 7.6 per cent in volume terms to 211.21 million and 4.65 per cent in value terms to Rs 1.97 lakh crore. Credit card usage rose 18.6 per cent to record 78.3 million transactions in June while debit card swipes rose 12.8 per cent month-on-month to 164.05 million.
Cash withdrawals through ATMs increased nearly 11 per cent from the previous month to 196.5 million transactions and withdrawals through micro ATMs were up 4.3 per cent to 60.83 million transactions. “While the impact of the second wave will be higher in May 2021 vs April 2021, one can expect recovery in June considering UPI payments in May have been similar to April,” the brokerage noted.
Rs 1.8L cr Total credit card spend in Q1FY22
13% rise in UPI volumes in June vs May
18.6% rise in credit card usage
7.6% rise in IMPS transactions