Credit card usage in first quarter of 2009 declined from the same period last year while the use of debit cards (funds withdrawn directly from a bank account)has increased according to the latest statistics from the Central Bank(CB).
The CB's Payment Bulletin shows that the total number of credit cards fell in the first quarter of 2009 to 892,291 from 909,517 for the corresponding period in 2008. The total number of transactions declined for the current period to 4.4 million from 4.7 million last year. Similarly, the total value of transactions also declined to Rs.15.7 billion for the first quarter of 2009 from Rs.17.5 billion the previous year.
However, the total number of debit cards in use increased by 4.6% to 4.5 million at the end of the first quarter of 2009 from 4.3 million as at end 2008.
The total value of debit card transactions increased by 2.1% to Rs.1.7 billion in the first quarter of 2009 compared to Rs.1.6 billion as at end 2008.
Meanwhile the CB announced this week that it will regulate services providers of credit, debit and store value cards, also known as payment cards, to ensure compliance with best international standards and practices in payment card related transactions. The regulations are also designed to increase public confidence and security of the services delivered to the end-customers. A CB officer at the Payments and Settlements Department told the Sunday Times FT that the CB was planning on handing over the proposed guidelines to service providers on Thursday for comment. "The public should know that when services providers are regulated by the CB, we will be overseeing their activities."
A CB press release stated that as per the provisions of the Payment and Settlement Systems Act No. 28 of 2005, the President authorized the 'Service Providers of Payment Cards Regulations No. 01 of 2009' to be effective from July 30, 2009. The regulations require all service providers to register with the CB which will function as their supervisory authority and issue directions, directives, guidelines, conditions, circulars, rules and instructions to the payment card service providers.
The press release stated that payment cards have gained importance in the recent past due to the growing preference of customers to use such payment instruments for day-to-day transactions, driven by customer convenience and transaction security. Service providers have also been able to market the payment cards by providing more convenient services to their customers using advanced telecommunication technology.
The CB stated that although the value and the volume of card based transactions are relatively low when compared with those of other payment instruments such as cheques, considering the rapid growth of such card payment instruments and their benefits to the economy, the Payment Card Regulations have been prepared by the CB to enhance the level of security and efficiency to protect customers and increase public confidence in such payments. |
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