Page 36 - Banking Finance February 2026

ARTICLE

Indian bank to launch its own credit card. The State CARD CY (Calendar Year) 2024 Daily Average
Bank of India in partnership with GE Capital-launched (In Lacs) (In Lacs)
the country's
first domestic Credit Card 44723.01 122.19
credit card
brand, SBI Card. (Ref. RBI data published in December 2024)
Within 10
months of 7. Artificial Intelligence, Tokenization, and Vir-
launch, SBI Card tual Cards (2020s-Present)
had issued Credit cards have now evolved into data-driven financial
100,000 cards, reaching 1 million by 2002, and doubling tools.
to two million by 2005. Y AI-powered fraud detection: Banks and networks use

Y 2012: The National Payments Corporation of India (NPCI) machine learning to analyse spending patterns in real
launched RuPay, creating a domestic card scheme and time, flagging suspicious transactions instantly.
reducing reliance on Visa and Mastercard.
Y Tokenization: Sensitive card details are replaced by
Y 2015: The Reserve Bank of India (RBI) mandated EMV unique tokens, ensuring security in online transactions.
chip cards, significantly enhancing transaction security. Tokenization replaces actual card numbers with ran-
domized tokens, securing online and mobile transac-
Y 2020s: Indian banks integrated credit cards into UPI-
linked apps and digital wallets, with fintech companies tions.
driving mass adoption. Y Virtual cards: Disposable or single-use credit card num-
bers provide extra privacy and security for e-commerce.
Today, India's credit card industry is growing at over 20% Virtual cards-dynamic, single-use numbers-add layers of
annually, though penetration remains below 5% of the popu- privacy and protection, especially for e-commerce users.
lation - leaving massive scope for expansion. By March 2023, Y Voice and biometric authentication: Emerging tech-
SBI Card itself had 16 million cards-and as of mid-2025, the nologies are testing voice-authorized payments and bio-
base crossed 20 million cards in force. metric verification beyond fingerprints.
Y Blockchain integration: Future systems may leverage
Typically, card payments were the most reliable and
widely used option for digital payments across various juris- distributed ledgers for instant validation and cross-bor-
dictions. However, with the introduction of UPI and its phe- der efficiency.
nomenal growth in recent times, card usage has seen a sig-
nificant shift. While the use of debit cards has declined, 8. Challenges Along the Way
credit cards have grown more than 15% on a year-on-year Despite their global success, credit cards face persistent
basis in recent years. As per RBI payment system report challenges:
December 2024, during CY-2024, there were 447.23 crore Y Fraud & cybersecurity threats: Data breaches,
and 173.90 crore payment transactions worth of Rs. 20.37 phishing, and skimming remain ongoing concerns.
lakh crore and Rs. 5.16 lakh crore through credit and debit
Y Debt traps: Revolving credit, if misused, can push con-
cards respectively.
sumers into high-interest debt.
At end-December 2024, the number of credit cards has Y Financial inclusion: Large populations, especially in de-
veloping nations, remain outside the credit card eco-
more than doubled to around 10.80 crore as compared to
system due to income or documentation barriers.
December 2019, when there were 5.53 crore cards in cir-
culation. In contrast, number of debit cards have remained Y Competition from UPI & instant payments: In mar-
relatively stable, with a marginal increase from 80.53 crore kets like India, UPI transactions have grown explosively,
in December 2019 to slightly more than 99.09 crore in De- reducing reliance on cards for small-value transactions,
cember 2024. As per RBI report the transaction volume of however for bigger value and buy now pay later is still
usage of credit card as of December 2024 is as under: - having attractive feature under Credit Card. As per re-

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