I’d like to think that the recent decline in the number of debit cards in India is the direct outcome of my incessant advocacy of credit card versus debit card! Cf. https://qr.ae/TWyICN.
If you don’t buy that, let me reference the reason I read in the newspapers: Non issue of new contactless debit card. According to RBI mandate, all old generation Magstripe / Chip-and-PIN debit cards in India had to be replaced by new generation Contactless debit cards by some deadline in 2019. All oldgen debit cards became invalid beyond that deadline. Most of them were replaced by newgen debit cards, but apparently ~15% of them were not. So, out of every 100 oldgen debit cards that went out of circulation, only 85 newgen debit cards came back into circulation. This naturally led to a decline in the number of debit card.
Going by my personal experience, I can advance another reason: Non receipt of PIN for the newgen debit cards. I got my newgen debit cards from all my three banks by the aforementioned deadline. Back in the day, the new debit card would come first, the PIN Mailer with the new PIN # would come a few days later. It was a straightforward process and the transition from old debit card to new debit card was smooth. However, during the recent transition, I couldn’t figure out how to get the new PIN. With GoGreen and all these counterproductive measures followed by banks, I couldn’t figure out whether I could get the new PIN via SMS or by logging into NetBanking or by visiting an ATM. The banks’ literature accompanying the new debit card was ambiguous. I tolerated the friction and managed to get the PIN for my primary debit card. But I didn’t bother to do so for my secondary and tertiary debit cards. As a result, the number of debit cards with me has dropped from three to one. That’s a 66% drop in debit card count in my case. Assuming there are millions of others in India like me, this is a another cause of decline in debit card.
Then there’s the unacceptably high level of insecurity of PINless regime for the newgen contactless debit card. Cf. Ketharaman Swaminathan’s answer to Why do many countries don’t require to enter PIN to verify a credit card transaction? Is the safety comprised?. While I’m willing to accept PINless use of contactless credit card, I find the risk too high in the case of contactless debit card. If there are others who feel the same way, it’s likely that they stopped using the newgen debit card for shopping at POS. While this does not reduce the count of debit card, it does lead to a sharp decline in debit card transaction value.