CRED, after sticking to premium offerings until recently, looks set to enter areas where it is likely to come up against mass volume players including Paytm, PhonePe, GooglePe and MobiKwik. This is a direct result of its need to maintain its growth momentum and add more users. The signals were still there when he opted for a mass property like IPL as a sponsor to expand his user base, first in 2020. This association only gained momentum in 2022 .
CRED has now added mobile recharge options, DTH, FASTtag as well as utility bill payments such as electricity, water bills and municipal taxes through the app.
The company headed by Kunal Shah offers cashback to compete with the aforementioned companies. With these features, CRED will also compete with Shah’s previous venture, Freecharge, which is now owned by Axis Bank.
Over the past year, CRED has explored new avenues to earn money. Apart from its core credit card payment business, the company runs its own e-commerce platform, peer-to-peer lending, and home rental payments vertically.
CRED primarily generates revenue from loans, e-commerce distribution platform, convenience fees, advertising, and commissions.
According to experts who follow the company, the new features are positioned to retain users and their money (payments) within its ecosystem. “CRED has approximately 6 million credit card holders on its platform and the company will spare no effort to enable existing users to recharge and execute utility payments,” said one of the experts. on condition of anonymity.
Digital payments such as top-ups and utility bill payments, wallets and shopping were the top spending categories in 2021, according to a report released by CRED named CRED Insight late last year.
“Expenses on top-ups and utility bills are generally constant throughout the year relative to purchases, travel, etc. So it makes sense to include them in the app,” the quoted person added. -above.
The last financial year was remarkable for CRED which managed to raise $466 million in FY21. Its revenue also soared 170x and crossed the Rs 88.6 crore mark in the year. FY21, while losses increased by 45% to Rs 523.85 crore.
The company also acquired Hipbar and expense management company Happay. Coach was the first to report the acquisition of Happay.
Adding utility payments and other bills is apparently the easiest way to raise the dial too high when it comes to transaction volumes. However, Cash Back, which CRED has turned into a fine art, is still in shock in its ability to acquire and, more importantly, retain customers in India, at least until the next bigger offer.
For CRED, arriving late, at a time when “established” players are suffering from cashback fatigue after years of heavy losses and in the case of Paytm, public scrutiny now, the route might still make sense with its core user base of ‘premium’ card users.
Again, while volumes may not increase, value likely will, as these users will also be in higher consumption categories for these services. The pattern for the next exponential leap in revenue for 2022-2023 may have just been set.