With Cred, we want to make credit cards more powerful: CEO Kunal Shah

Kunal Shah
When mobile wallet FreeCharge co-founder Kunal Shah started his brand new venture ‘Cred’ four months ago, one thing was clear in his mind — to make money digital. Shah told Patanjali Pahwa about his plan of making credit card ‘glamourous’ again. Shah, who was instrumental in positioning his previous venture FreeCharge as one of the top mobile wallet players in the country, believes that Cred, which incentivises credit card payments with reward points, may just help card firms take on the wallets. Edited excerpts:

Credit card penetration in this country is quite low and Cred’s business model is somewhat dependent on them. How does that work?

We tend to misunderstand numbers when we talk about credit cards. In India, only less than 15 per cent of urban women work. It gives us an interesting data that shows 92 per cent of credit cards are owned by men. Therefore, 25 million credit card holders (that India has) are contributing to around 40 per cent of the GDP. So, when we talk about increasing the number of credit cards, we are not increasing the consumption. Currently, India has around 45 million plus credit cards, owned by about 25 million customers. 

How are you planning to increase use cases? Which is the target market?

We want to make credit card attractive. With wallets, youngsters do not feel the affinity to use a card because the friction is higher. They prefer to follow a one-click approach for online as well as offline. So, our goal is to make credit card experience as seamless as any of the wallets and make credit cards more powerful. If we can transfer debit card spends to credit cards, it benefits the customers and banks alike.

What is the number of customers you are eyeing by the end of this year?

We would be happy if we get 1 million customers by next year. This is not a volume game like the wallets business. Our goal is to influence $700 million worth of business within two years. We want to monetise the influence of points earned for future expenses. We have partnered 150 brands. Our goal is to get around 1,000 brands by the end of this year.

Can you elaborate on the revenue model?

We are a marketing platform. Anyone who is getting access to customers would benefit from this. For example, we are helping a gym get more subscriptions. This is a service, which we are offering free, but as the number of customers increases, we will charge them. But this is not by data sharing. If a customer has opted or shown intent to use an offer from a certain brand through our platform, he has to pay a fee. Secondly, if we are helping banks cross-sell and upsell, we have a revenue sharing arrangement with them. We do not run advertisements. It is always an engagement offer.

How foolproof is this model? Will it work in the real world scenarios?

Nothing is foolproof. We have taken an approach that is slightly different than a mass platform. Mass platforms such as Paytm and PhonePe are competing with credit cards. We, on the other hand, are batting for credit cards. We believe, people still love credit cards. Otherwise, their numbers would have dwindled.

Are you planning to raise more funds?

We have got inbound interest from a lot of investors and we are discussing that. At present, we have hardly spent anything that we have already raised.


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