After disrupting the production chain of consumer electronics and automotive sectors, the chip shortage story has reached the banking sector, disrupting the delivery chain of debit and credit cards.
It’s been two years since COVID-19 came into existence and almost a year since Russia invaded Ukraine. But, still, the problems from those times continue to disrupt the way sectors work.
We are talking about the shortage of semiconductor chips. After disrupting the production chain of consumer electronics and automotive sectors, the chip shortage has now headed towards the banking sector.
If you have successfully applied for a debit or a credit card, you may not get it in the stipulated time because banks are falling short of chips!
Bottlenecks Faced By The Banking Sector
This is not the first time banks have experienced a chip shortage. Back in September 2022, banks faced issues providing cards to the New Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders. That’s when the Indian Banks’ Association (IBA) reached out to the government seeking a resolution.
Moreover, because of the chip shortage, banks had reported that local vendors had hiked chip prices despite existing supply contracts. A petition was also made that the Competition Commission of India (CCI) must look into the matter.
According to Moneycontrol, CCI was likely to fix the prices of the semiconductor chips.
But the story did not end there. The Smart Payment Association (SPA) warned that the availability of payment cards like debit and credit cards would be difficult. And that’s exactly where we are today.
How Will It Impact Customers?
In this era of cashless transactions, people walk out of their homes with just a card and swipe it to make a transaction. Yes, unknowingly, our lives are heavily dependent on cards. Also, the number of issued credit cards in India has rapidly increased.
So, if customers seek to receive a new card after the expiration date or want a new one on an emergency basis, they won’t get it too soon. This will surely cause inconvenience to the customers and a displeasing experience for the bank. Hence, the bottleneck in chip supply is a critical issue.
According to Economic Times, analysts believe that payment cards will get increasingly expensive as banks and other card issuers face a chip shortage.