DIFFUSION AND ADOPTION OF CREDIT CARDS IN INDIAN BANKING SECTOR

The study emphasizes on the identification of factors which may have influenced the banks to adopt credit cards along with their traditional banking services. Bank specific variables were investigated to deepen the understanding on the diffusion and adoption of credit cards. The data relating to sampled banks’ characteristics have been collected from database of Reserve Bank of India. To know about the status of the bank regarding its adoption of credit card, the websites and annual reports of the banks were explored during different intervals of time period of the study. The study considers the dependent variable i.e. adoption of credit cards as dichotomous variable, whether or not a bank renders the credit card services, denoting 1 if the bank has adopted credit card otherwise 0. The logistic regression has thus been applied to get the valid and reliable results. The empirical findings reveal that, size, non-interest income, non performing assets, profitability, age and market share of the bank are the variables which have contributed significantly in the diffusion and adoption of credit cards. The process of change and restructuring that must be undergone to capitalize on these opportunities poses a challenge for many banks. Due to adoption of technology, alternative channels of delivery would become more active. Hence, it becomes necessary for the banks to meet the required standards and to shake hand with the pace of technology.