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By Devsagar Singh

It is a season of plastic credit and debit cards, thanks to Prime Minister Narendra Modi’s demonetization of high value currency notes in the country. Cashing in on the situation, India’s domestic airlines and prominent banks have teamed up to issue co-branded credit cards for the convenience of passengers.

So you have Air India – SBI Platinum; Axis Bank – Vistara; JetPrivilege – HDFC Bank World; Jet Airways – ICICI Bank Rubyx; Axis Bank – Vistara Signature; Air India- SBI Signature; Jet Airways – ICICI Bank Sapphiro; Axis Bank – Vistara Infinite, among others.

These cards are not free, of course. There is a joining fee ranging from Rs 1499 to Rs 10,000 and a matching amount of annual fee. The airlines offer a range of services, depending upon the card that the passenger owns. They include services like free access to fancy airport lounges, free refreshments and even a hot shower at places.

It is a win –win situation for both the airline and the banking industry. While the airlines get passengers hassle free, the banks get business. Additionally, it helps maintain overall airport and aircraft security as passenger data is permanently captured through encrypted cards.

Major attraction, however, is earning miles which a passenger is entitled to redeem at his/her free will in subsequent travels. The more one travels, the more miles one accumulates. The airlines create a bank of loyal passengers who stick to them as much as possible.

In a jet setting age, more and more business travellers are taking to newly introduced credit cards. There are young executives ever on the move on office work. There are high-end leisure travellers who too opt for the new cards for the benefit they offer.

Frequent flyer programs offering goodies and miles were once the preserve of noted international airlines like the British Airways, American Airlines , the Emirates, Air France et al.

They enticed passengers through a host of benefits like accumulating miles to upgrading of seats. This situation is passé. Domestic carriers are competing with them now.

India is among the world’s fastest growing major economies. Air travel is consistently growing double digit for over a decade. During 2015-16, domestic air passengers registered a growth of 21.58 per cent as against 15.51 per cent during 2014-15, according to data available with the Directorate General of Civil Aviation. Indian airports handled 85.20 million passengers during 2015-16 compared to 70.08 million passengers the previous year.

International passenger traffic also registered a growth, but not as much as the domestic traffic. There were 49.83 million international passengers during 2015-16 ( a growth of 8.94 per cent) as compared to 45.74 million the previous year (5.85 per cent).

The International Air Transport Association (IATA) , which regularly monitors air traffic growth, is of the view that India’s domestic market will continue to grow double digit for several years more. Its forecast is matched by projections made by aircraft manufacturing companies like Boeing of US and the Airbus Industrie of Europe both of whom sell planes to the Indian carriers.

There is space for more airlines in the country. It is natural, therefore, that airline companies and financial institutions like banks have teamed up for business. The co-branded credit cards for air passengers is a step in that direction.

India is going to witness a revolution in plastic cards. The beginning has just been made. What is now needed is a strong regulator to ensure that the card issuing companies and the banks play a fair game. There have been innumerable complaints relating to overcharging of credit card customers by banks in the past. Cases of banks, including some reputed foreign banks, employing toughs to realize loans by force also came to light some years ago.

Airlines are a high flying industry literally. So are its customers. They need to protect the customers from harassments etc from banks whose credit cards they would be using.

Cyber security will be yet another area of concern in the high growth credit card industry. Specially now when the Government is literally forcing people to go cashless, cyber security must be strengthened. Despite India being ranked high in software and computer education, there are millions who lack knowledge of application of plastic cards in money vending ATMs. (IPA Service)

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