The key variables that really move the needle in the Indian Credit Card Industry are as mentioned below:
Number of Cards - Size of the customer base and penetration of existing customer franchise
Expenses - Predominantly includes the acquisition costs, A&P expenses (largest component around reward points), collection & recovery costs and fixed costs (employee, admin etc.)
Spends - Spends drive the interchange fee and higher spends can translate into revolving loans
Revolving Rate - Denotes conversion of card spends into interest-bearing loans - key variable for driving the interest income
Merchant EMI conversion Rates - Denotes conversion of card spends into relatively lower interest-bearing personal loans
Delinquencies - Higher delinquencies/default on loans will suppress the overall profitability
