Thursday, January 27, 2022

Confused about the CRED’s sustainability in India? Let us brief you on its business strategy in 3 easy parts

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CRED is a Bengaluru-based Fintech platform that allows customers to make credit card payments and receive unique deals through its app. Kunal Shah, the former creator of Freecharge, started it in April 2018. The company allows you to manage and pay off all of your credit card debts in one place. It not only offers unique card discounts, but it also keeps track of your spending.

It was inducted into the Unicorn Club in April 2021, with a valuation of $2.2 billion and a $215 million fundraising round led by Falcon Edge Capital and Coatue Management LLP. CRED’s incredible business plan has allowed it to achieve this position in just two and a half years.

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How does CRED operate and what is it?

The company allows you to lessen the stress of managing many credit cards while also assisting you in making timely payments of card bills . Through its programme, users can earn points that can be used to make quick purchases. Kunal Shah sold Freecharge in 2015 and was seeking for a new way to transform people’s lives.

During his research, he discovered a plethora of automatic products in developed countries, such as supermarkets without cashiers, gas stations without attendants, and so on, but no such reputable mechanism that will allow people to pay the correct amount of your card bills on time with no extra charges. It is great for folks who have a good financial history.

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But why should people pay their card bills through their APP? That’s when the idea for rewarding loyal card users who paid their bills on time came to mind. The company’s programme was launched in April 2018 with the goal of attracting customers. 

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The CRED App can be downloaded and filled out with your phone number. Until the account is configured, the app will verify the cards associated with the registered phone number. Users will be permitted to use the special app if their credit score is more than 750.

They’ve been placed on the waitlist if they haven’t done so already. The company’s apps will be able to read and scan card receipts, such as due dates, service bills, and so on if access is granted.

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CRED’s Business Model – What is its Process?

What is the mechanism of the company?

The Company’s Business Model explains how its programme operates.

Users can earn CRED by paying bills using the app. To make the offers, the company collaborates with businesses. As a result, the firms receive visibility and traction on a platform where customers are already willing to spend money. As a result, the company will be able to present more deals on its app. As a result, visitors have additional reasons to sign up for the app and pay their bills via it.

Customers paying their card bills, the CRED app, and businesses offering deals on the app are the three pillars of the company’s business model.

The three pillars that support CRED’s business model:

Customers who pay their card bills, the app, and businesses who offer deals on the app are all participants.

  • Customers of the company – Many consumers pay their card’s bill through applications or by connecting into their bank accounts directly. They can pay their card bills more efficiently by utilizing the app. People that use CRED to achieve rewards are more likely to share those benefits.
  • CRED App – Users can sign up for the app and view all of the available card bill payment offerings. You earn digital coins in the app as you pay your expenses, which you may exchange for rewards.
  • Offers in the app by businesses – It is critical for the company to bring businesses on board and create partnerships with them. As purchasers of all types use the company’s app, it provides visibility to small and large enterprises equally.
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How does CRED generate revenue?

Businesses pay the company to promote their items and offers on its app, and it gets money from listing fees.

There is no one-size-fits-all revenue stream for the company. Rentpay, CRED Stash, Store, Card Payments, and CRED Pay are just a few of the company’s products/services.

In collaboration with Razorpay and Visa, CRED Pay was created. It gives businesses a direct-to-consumer (D2C) channel by allowing them to accept payments instantly on their websites.

RentPay, a service provided by the company, allows tenants to pay monthly rents with a card, and the funds are instantly transferred to the landlord’s bank account. The app’s main benefit is that it allows users to acquire an interest-free credit period on their rent while also earning reward points on their cards. Depending on the user’s credit card network, the company will impose a transaction fee of 1% to 1.5 percent.

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The company’s Store is a collection of products and experiences available only to its members at discounted pricing. Digital coins are given out whenever you pay your card bills with CRED. These coins can be used to gain access to handpicked products and experiences, as well as to win exclusive rewards.

The company provides a Stash which is an online lending platform that offers users a personal credit line. There are no fees associated with registering or subscribing. The bank, on the other hand, charges interest on the money borrowed, which is indicated on the app during the loan application process.

The company’s partners will be able to see incentives on the application to companies. Clients of these firms become the consumers who redeem coins for deals in exchange. As more card clients use the app, they will be able to get more customised financial information. Reduced consumer transaction costs benefit financial entities such as banks and smart card companies.

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Final Words:

Kunal Shah has done a commendable job by coming up with such a brilliant idea. According to the study, we feel CRED do not only can survive in India but also has a wide scope also the company can come up with more ideas for expanding its business in the near future.

Also Read:

After a year of the launch of Xbox Series X or PS5, which one is your favourite?

The dark side of Metaverse, Know why its decision should be reconsidered

Why 8 Indian-born CEOs dominate Silicon Valley?


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