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Debit card usage growing fast in India

January 31, 2005

Times of India: With the entry of the State Bank of India into the debit market in 2002, debit card usage has shot up in India.

In the current financial year, the number of debit cards is likely to reach 29.81 million, scoring a growth rate of 44.44 percent, according to a recent study, "Emerging India: Transition to a Cashless Economy," prepared by the National Council of Applied Economic research (NCAER) for Visa international Asia Pacific. 

The growth is likely to continue as most of the public sector banks have started issuing debit cards. According to the NCAER study, the ATM cards being issued by banks for cash withdrawals are a precursor to debit cards. "For the Indian consumer, familiarity with an ATM card is a step towards being more comfortable with using a debit card for both cash withdrawals at ATMs and paying for purchases at merchant outlets."

Within two years, it's expected that all the ATM cards will be converted to debit cards. Banks like Citibank and SBI have already converted all their ATM cards into debit cards. 

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