Credit card spending continues to rise as virus recedes

Credit card spending continued to trend up in September, with people continuing to flock to online sites in the tourism and hospitality industry as the coronavirus crisis continues to subside.

Credit card transactions collectively stood at Tk 1,840 crore in September, up 10% from the previous month and 51% year-on-year, according to data from the Bangladesh Bank.

For all the latest news, follow the Daily Star’s Google News channel.

The tourism and hospitality sector reopened in August after the Covid-19 infection rate began to decline.

This had a positive impact on the upward trend in credit card spending, according to bankers engaged in the expansion of the card business.

In addition, people driven by the improvement of the coronavirus and the economic situation are increasingly purchasing lifestyle products through their cards.

As such, credit card transactions experienced magnificent growth in June of this year due to advance purchases for Eid-ul-Azha with spending amounting to Tk 1,934 crore this month. , up 13.25% from the previous month and 115.46% year-on-year. .

Transactions fell in July due to the post-Eid effect before rebounding in August.

Syed Mohammad Kamal, national director of MasterCard, said people are now buying lifestyle products and embarking on domestic and international travel as coronavirus restrictions have been relaxed.

A good number of international flight routes have also reopened recently, encouraging travelers to travel abroad. In this context, the use of credit cards is increasing, he added.

However, he expressed his concerns about the new variant of the coronavirus which has already spread to some countries, creating a tense situation in the business world.

“Economic difficulties may return if another wave of Covid-19 hits the country,” said the country director while calling on all parties concerned to promote contactless payment as it could play a vital role in the fight against spread of the deadly virus.

The lack of confidence in e-commerce caused by recently uncovered massive irregularities in the industry has been a blow to the digital payment segment.

It was found that some e-commerce platforms failed to deliver products and services to customers despite receiving advance payments.

Customers now pay much of the value of products based on the cash on delivery system, avoiding payments through card transactions.

The amount of e-commerce transactions totaled Tk 778 crore in September, up 0.25% from a month ago and 91% year-on-year.

Mahiul Islam, head of retail banking at Brac Bank, said the use of credit cards has increased to a large extent.

The bank has set a target to issue around 7,000 credit cards to its customers this month.

Until September, the number of credit cards in the market stood at around 18.03 lakh, up 1% from the previous month and 11% year-on-year.

“But, we are now a little worried about the latest variant of the coronavirus. If it spreads alarmingly, people’s purchasing power will face another disruption,” Islam said.

“This will have a negative impact on the current upward trend in the economy,” he added.

Previous Dairy farmers will also get a "Kisan credit card": Union Minister Rupala
Next Man jailed for using supervisor's credit card, spending S $ 3,300 on grab groceries and food deliveries