26% rise in new credit card applications

Reported by: |Updated: March 21, 2017

Banks in India are using multi-channel strategy to promote the sales of the credit cards:

There has been potential rise in the overall credit card business in India with demonetization and cashless transactions leading to the rise of this business. While demonetization has driven up card usage, there has in fact been a drop in the overall value of credit card transactions. Credit card transactions are seen as a proxy for consumer confidence.
The overall drop in credit card spends has been due to a drop in high-value discretionary spending like purchase of jewelry and consumer durables. This is despite a 30-35% jump in the number of card transactions due to increased usage for daily needs such as groceries. There has also been a sharp drop in EMI sales, which facilitate discretionary purchases, usually of consumer durables.
YES Bank credit cards portfolio saw a very healthy growth in frequency and value of usage post demonetization. The sharp growth in number of transactions indicates a shift towards greater adoption of digital payments especially for low ticket and everyday spends categories. Pralay Mondal, senior group president, Retail and Business Banking at YES Bank, says credit card spends and growth in November and December 2016 over October 2016 was at 20% and 86% respectively. The growth in number of transactions in the same period was 46% and 123%. “We continue to see the growth momentum across all usage parameters for credit cards,” he adds.

RISE IN APPLICATIONS
Kotak Mahindra Bank is among the newer players in the credit card business in the country. Post demonetization, the bank saw a rise in the applicants by 22% and new customer applications by 5%. The bank says it continues to register 30% of growth on a monthly basis.
According to Navin Chandani, chief business development officer, BankBazaar.com, the company saw 26% rise in the applications for credit cards in January 2016 as compared to the pre-demonetization months of September and October.”
Says Mondal: “With well-differentiated products, YES Bank has seen a strong growth of 26% in credit card applications in November 2016 and 75% in December 16 over October 2016. This is also indicative of a greater need and acceptance for electronic payment products in the market.”

SALES, MARKETING
BankBazaar.com has recently launched a marketing campaign ‘Finance Mega Mela’ in February 2017 to promote sales of the financial products including credit cards. Chandani said the company is using all the social marketing channels to promote this campaign. The company has released a special YouTube vie and has tied uo with the Akshay Kumar starrer Jolly LLB for this, he adds.
YES Bank has a multi-media, multi-channel strategy to promote sales of its credit cards. New card applications are sourced through the bank’s branches, corporate channels, digital/online campaigns, tele-sales and external partners. In addition, the bank also promotes credit cards through alliance partnership with leading brands from time to time to drive visibility and salience of the products. “Social media is a key channel for promoting our products and offers to the potential and existing customers,” says Mondal.
Kotak Mahindra Bank mainly targets its existing account holders for its credit cards sales. As much as 80-85 % of its credit card holders are its existing account holders. The bank mainly uses email marketing to reach its customers.

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