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Digital payments peaked during the first wave of Covid-19, then progressively declined and soared back again to moderate usage during the second wave of the pandemic in top metro cities, reveals a survey deone by CRED- a credit card bill payment platform. The company analysed its members’ credit card spending in six major Indian metropolises: Mumbai, Delhi-NCR, Hyderabad, Kolkata, Pune, and Bangalore.

The study, which covers three time periods – April 1, 2020, to May 31, 2020 (first wave of a pandemic), January 1, 2021, to March 1, 2021 (pre-second wave), and April 1, 2021, to May 31, 2021 (second wave) – revealed a range of findings indicating a shift in the consumer behaviour and expenditure of CRED’s affluent, financially responsible community.

Key Findings

Leisure spending was low across the country (14%) during the initial wave of the pandemic, owing to severe lockdowns and restrictions. However, as the caseload declined, there was a dramatic rise in the trend across all six cities.

Demand for leisure goods and services increased as mobility curbs were eased and peaked during the second wave (21%). Leisure expenditures increased by 19% in the second wave of Covid-19, demonstrating consumers’ desire to indulge in such activities. Kolkata inhabitants spent the most on leisure (23%) across all time periods.

During the first wave of the pandemic, the use of digital wallets was at an all-time high (67%), as individuals stayed at home and made various payments using their credit cards. Spending habits shifted during the pre-second wave period as other forms of entertainment became available.

People preferred to dine out and travel while cases were less, reducing wallet usage to 58% from January 1 to March 31, 2021. Many were accustomed to leisure activities during this time period, as wallet spending increased to just 60% during the second wave, but leisure (19%) and travel (8%) remained stable.

Consumers aged 18-25 continued to choose leisure over travel and banking. While banking spends declined from the first wave (8%) to the pre-second wave (5%), over the same period witnessed them spend significantly more on leisure (23%).

The trends continued during wave two. On the other hand, individuals aged 30-60 witnessed increased spending on travel (10%) once the first wave diminished.

“Affluent consumers are relatively insulated from economic headwinds. While CRED members – a community of financially responsible Indians – curtailed spending in the first wave, they were more confident spenders during the second wave as they increased or maintained consumption before and during this period. It is clear that as consumers, especially older, get comfortable spending online, merchants with strong digital operations, offering experiences, and smart payment options are well-positioned to capture these spends,” said Kunal Shah, founder, and CEO of CRED.