An Empirical Investigation on Credit Card Adoption in India

In India, the credit card usage as well as the penetration has been found to be very low compared to that of debit cards. Though banks offer the best of the services, still there are apprehensions about the risks involved in using a credit card in India. Hence, this study investigates the customer’s adoption behavior of credit cards and determines the factors which influence the acceptance among Indian customers. Many studies have been reported in the literature to analyze the customer’s adoption behavior of online banking, Automated Teller Machines, e-shopping etc. But, there are not many studies that analyze the adoption behavior of credit cards. In this study, an empirical model that includes ten behavioral factors has been proposed. Along with the main determinants identified from the literature, two new parameters such as perceived benefits and self-esteem have been included in the model. The analysis of the model reveals that factors such as perceived usefulness, perceived ease of use, perceived risk, relative advantage, perceived trust, social influence and perceived benefits have been found to be the main determinants of credit cards adoption in India. The findings are of great use primarily for the banks which are planning to offer credit cards, and for already existing banks to focus on the gaps.