News: Visa power pushes up tourist spending in India

(DNA 12/04/2006) Kolkata - Electronic payments have been stimulating international tourist spending in India big time. Visa International, the world’s leading payment card for international travel and an important channel in delivering tourism revenue into India, has seen its international card holders spending Rs 5,400 crore in 2005, a rise of 31% over 2004.

Tourists from the US, the UK, France, UAE and Australia, using Visa cards, contributed 64% to the total spend. The Japanese tourist visiting India, however, recorded the highest average spend per person.

The maximum usage of Visa cards in India by international tourists was for buying retail goods like jewellery, watches and crystals, followed by accommodation and transport.

While retail goods represented a 34% share among categories, accommodation and transport represented a 27% and a 9% share respectively.

Interestingly, almost 21% of India’s total foreign exchange earnings from tourism in the fourth quarter of 2005 were spends using Visa cards.

According to the Ministry of Tourism data, India’s total foreign exchange earnings from tourism for the fourth quarter amounted to $1762.46 million. Of this $372 million was spent through Visa cards.

“The contribution of electronic payment to overall tourist spending in the country and its impact on foreign exchange earnings is significant. As the tourism industry in the country evolves with development in infrastructure, a robust payment system will also pay a key role in enhancing attractiveness of Indian tourism,” Santanu Mukherjee, country manager, South Asia, Visa International Asia Pacific, said. “Inbound international visitors spent Rs 1,680 crore on their Visa cards during the fourth quarter of 2005, which represented a growth of 25% over the same period the previous year,” Mr Mukherjee said.

A Visa study indicates that cards are not only used at traditional travel and entertainment outlets, such as hotels and restaurants, but also at supermarkets, handicraft shops, and medical service providers. There is a clear trend that merchants in India are accepting cards for payment, though a vast majority of merchants around the country still remain cash-based. A further expansion of infrastructure for card acceptance across the country will give a boost to tourist spendings.

Visa International recently introduced the Incredible India Visa Great Breaks programme in partnership with the ministry of tourism.

The programme will target domestic, regional and international tourists and promote tourism in India among other countries in Asia.

Tourists will be provided with direct access to merchants across categories, thereby helping them to plan their visit more effectively.