Comparative Study of Debit Cards of Private Banks

As a banking product, debit cards have gained in popularity over recent years, with more and more consumers swiping these more and more. Sample this – while debit-card usage in ATMs dropped by 18 per cent between August 2013 and August 2018, its usage at point-of-sale (PoS) outlets increased by 200 per cent during the same period. At the same time, this is also true that when a certain product begins to be used extensively, the negative features/fallouts come to the fore. In the following report, we will focus on these aspects and also assess the various banks’ offerings on some standard parameters.
Debit Cards Compared: HDFC Bank, Yes Bank, Axis Bank, Federal Bank, South Indian, Lakshmi Vilas, Bandhan Bank, Karnataka Bank Tamilnad Mercantile, City Union, IndusInd Bank, Karur Vysya.

For this study, we chose private banks mainly because they are more aggressive in their approach in providing latest technologies to customers, as compared to nationalized banks. Among the private banks, we considered their people-to-bank network ratio in the country as measured in the number of branches serving customers. Narrowing it down, we selected those private banks that were operating more than 500 branches in India.

The final 12 banks were compared on their charges, if any, for services/facilities such as card issue, annual maintenance, PoS transactions, transactions per month at ATMs (own bank), ATM-transaction fee (beyond limit), international card-transaction fee, renewal of card, and issue of duplicate card/PIN. We gave the highest weightage (20 points) to customer feedback, which also helped in determining the most important and beneficial variables. These variables have a direct bearing on the product structure. Our questionnaire covering various features of banks’ debit cards received responses from more than 500 customers.

In India, total debit cards in circulation as on November 2017 was 731,332,595 and this grew to 805,522,146 as on August 2018, thereby registering about 109% growth. Consequent growth in rupee value was 2,492,721.70 Mn (November 2017), as against 2,759,761.00 Mn (August 2018), which is a jump of 109.67%.

Parameters Compared

  • Card-issue fee
  • Annual-maintenance fee
  • Renewal of card fee
  • Issue  of duplicate PIN fee
  • Duplicate-card fee
  • PoS transaction charge (%)
  • Free transactions per month at own bank
  • Free transactions per month at other banks’ ATMs
  • ATM transaction fee (beyond limit)
  • International card-transaction fee (cash withdrawal)
  • International card-transaction fee (balance enquiry)
  • Customer feedback

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