What do people purchase most using debit and credit cards?

Debit and credit cards have made everyday transactions significantly easier for many people, while also reducing the inconvenience of carrying cash.

Over the past decade and a half, new financial services—such as mobile financial services (MFS), internet banking, and app-based transactions—have been introduced.

Despite these developments, the issuance of debit, credit, and prepaid cards has increased by 111 per cent over the past five years, while transactions conducted through these cards have risen by 159 per cent.

As of January this year, people in Bangladesh held a total of 51,677,256 debit, credit, and prepaid cards.

Through this vast number of cards, users spent approximately Tk 510 billion (51,000 crore) in January alone. This raises an important question: what do people actually purchase most frequently using these cards?

Bangladeshi consumers most frequently use debit, credit, and prepaid cards abroad to purchase goods from departmental stores. Retail outlets account for the second-highest category of expenditure.

In addition, people use cards for transportation, medicines, business services, ready-made garments purchase, professional services, government services, cash withdrawals, and utility bill payments, including gas, electricity, and water.

These findings emerged in a recent report published by the Bangladesh Bank.

An analysis of the report shows that, in January this year, transactions worth Tk 8.73 billion (873 crore) were conducted abroad using debit, credit, and prepaid cards.

Of this amount, 24.59 per cent (Tk 2.15 billion) was spent at departmental stores, while 13.5 per cent (Tk 1.18 billion) was spent at retail outlets.

According to the report, Bangladeshis spent Tk 4.63 billion abroad using credit cards in January.

Of this total, 30 per cent (Tk 790 million) was spent at departmental stores, while retail outlets accounted for the second-highest share at 17 per cent.

In addition, 11 per cent was spent on transportation, 7.71 per cent on business services, and 6.95 per cent at ready-made garment stores.

Furthermore, 5 per cent was spent on professional services, 4 per cent on government services, 3 per cent on cash withdrawals, and another 3 per cent on utility bill payments.

In the same month, transactions worth Tk 3.57 billion (357 crore) were conducted abroad using debit cards. Of this amount, 18 per cent was spent at departmental stores.

Government services accounted for approximately 16.75 per cent, business services for 15.5 per cent, cash withdrawals for 14 per cent, and retail services for 10.60 per cent.

Additionally, 8 per cent was spent on medicines, 7.5 per cent on transportation, 4.82 per cent on professional services, 2.64 per cent on ready-made garments, and around 1.5 per cent on utility bill payments.

Transactions conducted through prepaid cards remain lower than those made using credit and debit cards. In January, Bangladeshis carried out transactions worth Tk 540 million abroad using prepaid cards.

Of this amount, 21 per cent was spent on government services, while nearly 20 per cent was used for cash withdrawals.

Business services accounted for 17.69 per cent of the expenditure, and 15 per cent was spent at departmental stores.

While data is available on what Bangladeshis purchase abroad using cards, the report provides only a partial picture of domestic spending patterns.

This is because, although detailed data exists for credit card expenditure within the country, the report does not include comparable data for debit and prepaid cards.

In January this year, transactions worth Tk 37.20 billion (3720 crore) were conducted within the country using credit cards. Of this total, 47.48 per cent, or Tk 17.79 billion (1779 crore), was spent at departmental stores.

Additionally, 11.5 per cent, or Tk 4.31 billion (431 crore), was spent at retail outlets.

Beyond this, 8.67 per cent, or Tk 3.23 billion (323 crore), was used to pay utility bills; 7.60 per cent, or Tk 2.83 billion (283 crore), was withdrawn in cash; and nearly 6 per cent, or Tk 2.22 billion (222 crore), was spent on medicines.

Furthermore, in January, credit card users spent Tk 2.17 billion (5.82 per cent) at ready-made garment stores, Tk 1.38 billion (3.70 per cent) on government services, Tk 1.14 billion (3.07 per cent) on transportation, and Tk 1.00 billion (2.69 per cent) on business services.