💳️ The decline of debit cards

Good morning. Taylor Swift’s latest Instagram post where she endorses Kamala Harris and encourages Americans to vote, has received 10M likes in the last 24 hours.

It has also driven 400,000 visitors to U.S. voter-information sites so far.

The power of the ‘childless cat lady’ a.k.a the ‘most decorated solo artist at the VMAs of all time’ 🌟 🐱 

- Ruchirr Sharma & Shatakshi Sharmaa

TABLE OF CONTENTS

• 💳️ The decline of debit cards in India

• 🛒 Violating Indian Antitrust Laws

• 🗞️ Bite-sized summaries

  • 🛍️ Online shopping is about to hit a new level

  • 🧑‍🚀 Billionaire spacewalk

  • 🇺🇸 Who won the US Presidential debate?

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian shares hit record highs on Thursday, as the Sensex and Nifty rose nearly 2%, driven by expectations of a Chinese interest rate cut to boost consumption. Gains were led by metals, energy, and auto stocks, with the indexes up 17% this year amid a strong macroeconomic outlook.

🌍️ International

• Wall Street's main indexes closed higher on Thursday. This rise followed inflation data that bolstered expectations for a 25-basis point rate cut by the Federal Reserve next week. Moderna's weak revenue forecast led to a 12.4% drop in its shares, while Warner Bros Discovery gained 10% after a deal with Charter Communications.

UPI

💳️ The decline of debit cards in India

UPI is coming for all the banks (and their market share), potentially spelling the end for traditional debit cards. 

Why? Because several new UPI features are set to challenge the core functions of debit cards, accelerating their decline in the market.

Here are some of them: 

1. UPI Circle: This feature allows users to authorise family members to make transactions from their UPI-linked accounts, directly competing with banks' add-on debit cards.

2. UPI ATMs: Cardless cash withdrawals and deposits via UPI apps could significantly reduce ATM operating costs and eliminate the need for PIN-based transactions.

Why is this important? 

• Debit card usage has already seen a significant drop, with merchant payment swipes falling from 312M in July 2022 to just 144M in July 2024. 

• As UPI expands its functionality, it's becoming a universal retail payment system, potentially rendering debit cards obsolete. 

• This shift could benefit banks by reducing the costs associated with issuing and maintaining debit cards.

Despite all this, there could potentially be a silver lining for banks: 

• By reducing debit card issuance, banks can save on production and maintenance costs associated with feature-rich cards.

• Plus, as debit cards decline, banks are likely to emphasise innovative rewards and cashback programs for credit cards - which is always good news for customers. 

Looking ahead: As UPI transactions continue to hit record highs and more Indians adopt credit cards for daily purchases, the banking industry is poised for a significant shift in payment preferences. 

The trend suggests a future where UPI becomes the primary mode for savings account-based transactions, potentially relegating debit cards to a secondary role in India's evolving financial ecosystem.

Read more: Economic Times

ANTITRUST LAWS

🛒 Violating Indian Antitrust Laws

A recent investigation by the Competition Commission of India (CCI) found that Amazon and Walmart-owned Flipkart violated local competition laws.

Launched in 2020, the probe concluded that both companies created an ecosystem favouring select sellers on their platforms, disadvantaging smaller retailers.

Here’s what the investigation uncovered:

• Preferred sellers were given higher visibility in search results, sidelining other merchants.

• Ordinary sellers were relegated to “mere database entries,” with limited opportunities.

• Deep discounting, especially in mobile phones, had a "catastrophic impact" on market competition.

• Preferred sellers received various services at minimal costs, which the CCI labelled as “predatory pricing.”

The investigation produced extensive reports: 1,027 pages on Amazon and 1,696 on Flipkart. These findings pose a significant challenge for the e-commerce giants in India’s booming online retail market, projected to reach $160B by 2028.

This development adds to the global scrutiny these companies face. In the U.S., Amazon is already contending with an FTC lawsuit over monopolistic practices.

TL;DR:

• The probe followed complaints from brick-and-mortar retailers.

• Amazon and Flipkart have denied wrongdoing.

• Both companies will have a chance to review the reports and file objections before any potential penalties are determined.

• A 2021 Reuters report had previously exposed Amazon’s preferential treatment of select sellers.

Overall: As India's e-commerce market evolves, the government is intensifying scrutiny of foreign investments. 

Despite these challenges, Amazon plans to increase its investment in India to $26B by 2030, but the case could lead to stricter regulations aimed at ensuring fair competition.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🛍️ Online shopping is about to hit a new level - A recent Ipsos Research survey, commissioned by Amazon India, found that 71% of Indian consumers plan to shop online this festive season, while 89% are excited about the festivities. The study also revealed that nearly half of online shoppers plan to spend more than last year, particularly in metros (55%) and tier-two cities (43%). Convenience, speedy delivery, and affordable payment options are key factors driving this trend. Amazon was the preferred platform for 73% of respondents. Quick commerce platforms like Swiggy Instamart and Blinkit are also expanding to meet the rising demand during the festive season.

🧑‍🚀 Billionaire spacewalk - Billionaire Jared Isaacman and SpaceX engineer Sarah Gillis became the first non-professionals to perform a spacewalk, stepping out of the SpaceX Dragon capsule 435 miles above Earth. This private spacewalk, funded by Isaacman, marks a historic milestone in space travel, previously exclusive to government-funded astronauts. The crew wore specially-designed spacesuits with innovative features like heads-up displays. The mission, Polaris Dawn, is part of a broader effort by private companies like SpaceX to lower space travel costs and make it accessible to non-professional astronauts, though high expenses still limit its widespread availability.

🇺🇸 Who won the US Presidential debate? - In their first presidential debate, Kamala Harris and Donald Trump clashed over key issues like the economy, immigration, and abortion. Harris repeatedly put Trump on the defensive with pointed personal attacks, leaving him struggling to stay on message. While Trump tried to defend his past actions and rally sizes, Harris labelled his policies as harmful, including calling his tariffs a "Trump sales tax." A CNN snap poll showed Harris performing better, with her tactic of keeping Trump on the defensive proving effective. By the debate’s end, Harris’ team called for a second debate, suggesting confidence in her performance.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Mamaearth shares tumble 5% after Rs 1,763 Cr. stake sale via a block deal.

• Adani-Hindenburg saga continues: Six Swiss bank accounts relating to Gautam Adani were frozen, reveals Federal Criminal Court.

• India's industrial production grows by 4.8% in July 2024.

• General insurance growth slows to 4.5% in August amid slower auto sales.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Trailer for “Vicky Vidya Ka Who Wale” dropped and got rave reviews.

• ‘Transformers One’ review: Chris Hemsworth and Brian Tyree Henry lead a delightful, franchise-revitalising prequel.

• Streaming ratings: ‘Emily in Paris’ opens lower with half-season release.

• MTV VMAs 2024 - Taylor Swift led the pack of nominees with 12 nods and 7 wins. Complete winners list here.