“Overall credit card spends (of the industry) are back to pre-Covid levels. Some banks say 80-90 per cent, for some it is 90 per cent, my gut feeling is that most of this is back to normal. Some of the sectors are still slow, especially when it comes to tour and travel, where there is a recovery of about 25-30 per cent,” Rajanish Prabhu, Head – Credit Cards and Merchant Acquisition,Yes Bank told in an interview.
“For eating places and hotels, the recovery is still less but when you look at grocery stores, super markets or utility payments and the electronic stores, you see a lot of lift there,” he said.
Overall, the industry is looking back on its feet and within that e-commerce has seen a good jump and has really changed a shift on online penetration, Prabhu said.
“Our own vision is to make sure that we grow our book by at least four times in the next two years or say 15 times in the next five years. We will double our customer base in the next two years.
“But as we do that we will also make sure that we get the HNW (high net worth) and the super HNW customers also. You want the high net worth customers but you also want the mass base customers because today everybody uses credit card. We want to attract every segment of customers,” Prabhu said.
Yes Bank’s outstanding credit card at the end of September 2020 stood at 8,16,208, with value of transactions standing at Rs 490.76 crore, according to RBI data.
“From a credit card industry perspective, the spends are back. But there is one thing that we are comparing November with February, but what still needs to happen is that year-on-year growth also has to come back in the same manner.”
Because of the pandemic, people had no choice but to go online, which has helped get a lot of traction and these spends are not only coming from tier I and tier II cities but they are also coming from tier III, IV and V cities.
“I think credit card as a culture, overall with or without the pandemic, keeps on improving. If I have to give you the perspective, today credit card spend to GPD is about 2.5-3 per cent, if you take it six or seven years away from the current time that number will go to about 6.5-7 per cent, according to our estimate.
“Developed countries number is far higher. So as more and more people enter into the working class, the white collar segment, …there is a cultural shift happening, there is demographic shift happening, I think people will get more and more comfortable using credit cards,” Prabhu said.
He said the bank will invest in technology as well as distribution besides forging more partnerships with merchants and others.
To tap the opportunity amidst the pandemic, the bank recently launched ‘Yes Private Prime’ credit card, targeting the affluent and HNI customers.
“India as a country has got a lot of millionaires, clearly we see an opportunity to cater to this segment. And my past experience tells me that throughout economic cycles, the one of the segments which remains least impacted is really the HNIs (high net worth individuals). So I think there is an opportunity there.
“As a bank we are taking multiple initiatives across multiple fronts. So clearly this is a consumer segment, we believe that we want to attract and we have attracted them with a great proposition under the Yes Private Family…,” Prabhu added.
The lender has also recently started to offer its credit card holders the facility to share their points with friends, family or anyone within the Yes Bank family so that one can make a purchase or booking if there is a shortfall of points.
“For us, (our) customer will be the most rewarded credit card holder in India. And we also have what we call never expiring reward points. We will also focus on innovation and continue to innovate in terms of products and services which we bring to the customers,” he said.
Prabhu hopes that things will look better for future albeit there will be some uncertainly.
“It is difficult to predict but broadly I am saying things will be in better shape. In terms of collection efficiency, we are back to where we were, so that is an important metric. We have also implemented the restructuring plan (for credit cards).
“That number is not also large, it is very-very small and there also we are making sure that our customers get the entire support,” Prabhu added.
