News: Smaller Indian cities get Visa power

(DNA 21/10/2006) Kolkata - India has emerged as the fastest-growing among eight key Asia Pacific markets for Visa, with tier-II and tier-III cities reporting higher card transaction volumes.

According to a recent Visa International study, Gurgaon, Cochin, Vijaywada, Ghaziabad, Indore, Madurai, Lucknow and Ludhiana are among the cities showing a notable surge in usage of plastic money.

While the bulk of the cardholders are still in the top 8-10 cities, card issuance in the tier II and III towns and cities has grown, riding on the growing reach of private and public sector banks in these locations.

“The Indian payment industry has matured over the past few years. With products like pre-paid and debit cards being introduced, access to and availability of cards have become much easier for a larger section of the population. Visa expects a double-digit growth rate for both card sales volume and retail sales volume in India,” Santanu Mukherjee, country manager, South Asia, Visa International Asia Pacific, told DNA Money.

“The key challenge in these smaller towns and cities is that card penetration has to catch up. Preference for cash is also a key challenge that needs to be addressed. Infrastructure is still lagging behind for acceptance of payment cards and industry-wide initiatives are necessary to ensure that the acceptance infrastructure is in place,” he said.

While Visa does not interface with cardholders, it has initiated technological and infrastructure activities to capitalise on growth potential through expanding network of its member banks.