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• Credit or Cash 101
If clothes
define your personality, then your Credit Card certainly reflects
your Financial Health. Or so they used to say!! There are about
2.5 crore (25 million) taxpayers in India who can use a credit card,
but do not. The actual number of credit card users is just about
50 lakh (5 million). With the Credit Card Market growing at 20-25%
per year and new Credit Card Products deluged upon the average middle-class
consumer, the figures are really attractive.
In terms of the Total Target, Market Penetration varies
between 10-20%. The Personal Consumption Expenditure, which is total
of all cash and cheques issued by Retail Customers as a percentage
of that Credit Card spend is only 1%. So, Cash is the biggest competitor
for the industry.
Payment Options while Transacting in India
The 3 most used Payment Methods
while Transacting Online in Indian Shopping Marts, B2B Exchanges
and various other Service Industry-related business websites are:
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Cash On
Delivery - A common option, this medium provides
the maximum amount of satisfaction to the Customer and is the
second-best option to physically shopping. This means of receiving
payments against delivery of products, is preferable for only
those merchants who wish to nullify the risk of Frauds and have
a capital-intensive, high-risk product, to sell. Such a payment
option is generally used for products where the stock availability
is low.
-
Credit
Cards - The Credit Card industry is growing by leaps
and bounds per annum. A Credit Card is a card that entitles
the holder to a revolving line of credit, which is determined
by the user's income. A Credit Card user need not pay the entire
amount transacted in a month and can pay only pay a portion
[pre-determined by the Issuing Bank] of the entire amount.
There are 3 kinds of Credit
Cards issued in India -
- India/Nepal - Such a credit card can only
be used for transactions in these 2 countries only - India
and Nepal.
- Domestic - A Credit Card that can be used
only within India.
- International - This card can be used worldwide
wherever the Credit Card Company [Visa, Master, Amex, Diners,
Discover, etc.] is recognised.
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Debit
Cards - A Debit Card is basically an ATM card on
the move. It enables you to access your bank deposits for payment.
When you make any purchases using a Debit Card, your bank account
is automatically and instantaneously debited to the extent of
the purchase amount
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