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Axis Bank rolls out virtual credit cards to ride on festive spends

Axis Bank, India’s third largest private lender, is gearing up to make the most of high festive seasonal demand by issuing instant virtual credit cards to existing customers.

Typically, transaction volumes in the Indian banking system jump during the October-December quarter every year due to high consumer spending in festivals like Diwali, Christmas etc.

“The idea was to time the launch in such a way that we are able to leverage the demand particularly in the festive season,” said Sanjeev Moghe, executive vice president and head-cards and merchant acquiring business, Axis Bank.

He added that the bank is also planning to team up with merchants to introduce festive offers. “This will add momentum to our existing growth rate in the credit card business,” Moghe told IBS Intelligence.

As on June 2018, Axis Bank had a market share of 11.83% with 4.66 million outstanding credit cards as compared to 3.52 million a year ago. The lender’s credit card transactions also grew to Rs48.35 billion from Rs32.78 billion in the same period, according to the latest data released by the banking regulator.

Currently, around 70% of the e-commerce transactions originate on mobile and a virtual credit card will provide customers with instant access, Moghe said.

“Currently, a credit card takes 5-10 working days to reach a customer. But immediacy is the need of the day. So, to address that, we are issuing credit cards which are ready to use right away,” said Moghe.

He said that Axis bank will be offering such cards only to a targeted set of existing eligible customers who score high on engagement index. “We’re using data analytics to determine which customers can be pre-approved based on their engagement and account balance with us,” said Moghe, adding that the lender hopes to elicit response from younger population.

Once the customer registers for the virtual credit card on the bank’s mobile application, the bank issues online card within minutes. The bank also dispatches a physical credit card subsequently for use at both-online and offline spending.

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