Card transactions increasing due to ease of use: Central Bank

ANKARA

The proliferation of digital channels and the increased cost of carrying cash due to high inflation have boosted the use of debit and personal credit cards (PCCs), the Central Bank of Türkiye has said.

“The fact that cards allow consumers to borrow through cash advances and deferred payments also contributes to this development,” the bank said in a report titled “Recent Trends in Card Spending Preferences” announced on Sept. 23.

“With the impact of high inflation in recent years, card spending balances have increased significantly in both nominal and real terms,” the report read.

“The fact that individuals prefer to use cards rather than cash in their payment instrument preferences is an important determinant of the real increase in card transaction balances.”

In Türkiye, there are approximately 28 million active credit card users, 125 million credit cards and 191 million debit cards, while the total volume of card spending reaches 12.8 trillion Turkish Liras ($375 billion).

Factors other than the cost of card credit are also driving the increase in card spending, according to the report.

“The ease of use of card payment methods, the rapid increase in the preference for contactless payment during the pandemic period and the reduction in the carrying of cash also play an important role in the increase in card-based spending,” it said.

“Indeed, this view is supported by the fact that the real increase in spending with debit cards, which do not offer the possibility of borrowing, was higher than with credit cards over the same period. Since 2015, spending with credit cards has increased twofold in real terms, while spending with debit cards has increased almost threefold.”

Accelerated by the COVID-19 pandemic and supported by the development of the technological infrastructure in payment systems, contactless payment preferences continue to spread, the report added.

“While only 2 million contactless payment transactions were made per month in 2015, more than 1 billion contactless payment transactions are currently made every month,” it said.