A Detailed Case Study Of CRED App

The fintech industry is one of the fastest-growing industries of the past decade in which India is the second biggest market for fintech startups. CRED is a growing fintech startup that serves in the field of the credit card.

What is CRED?

We all know how mobile apps these days enticing users by giving reward points and cashback offers.

CRED is a mobile app that pays off your Credit Card bill.

When you make credit card bill payments using the app, You will earn coins equivalent to the amount you pay as your Credit card bill. You can redeem these coins to get various rewards and cashback.

Founder – Kunal Shah

Founded in 2018

Funding – Series A round – $30 million led by Sequoia Capital.

Series B round – $120 million led by Ribbit Capital and Gemini Investments.

Market Valuation – $450 million

Headquarter – Bengaluru, India

Who can be a member of the CRED club?

CRED club membership is offered based on the credit scores of the users. It only allows consumers with credit scores higher than 750.

Benefits

The app notify you about your next credit card bill, also send alerts on suspicious activities on the credit card.

Drawbacks

The failed transaction is one of the main concerns with such payment apps. Recently there have been complaints regarding failed payments.

Another issue with this app is if someone pays off their credit card bill not using the app it will continue to show you payment due.

The company identified all issues and trying to improve their services.

Indian Credit Card Market

To understand the case study of CREAD, first, we need to understand the Indian Credit Card Market.

As per 2019 data, the Indian credit card user number reached 46 million, and the credit card market is anticipating a slow growth at a CAGR of more than 25% during 2020-2025.

According to the Reserve Bank of India in April 2020, the total number of the debit card is 829.4 million (95.3% of the total number of operational cards), adding 800,000 cards over March 2020. While there is only a total of 57.4 million credit cards were in operation, losing 300,000 cardholders over March 2020.

compared to India, the United States has about 1.5 billion active credit cards (67% of the total number of operational cards in the United States).

For every 100 people in India, there are only 3 credit cards compare to the America’s 320.

Revenue Model

Ever since it has launched CRED has created a lot of buzzes. In FY19 it has spent 64 Cr with ZERO operating revenue. Like other startups, CRED is focusing on customer acquisition by giving them rewards. With India’s growing Credit Card market the company has a huge future opportunity.

• Currently, CRED is earning commission from brands listed on the app.

• It takes two days to pay your Credit card bill. They earn interest from short term investment.

• You can also pay the loan through cred, and they charge a little percentage on that.

• While providing services CRED collects lots of Data from you like Credit card information, Credit score, Your spending behavior, etc.

We all know how valuable data is. It can be speculated that CRED could monetize those data. No, that does not mean they will sell your data.

They may use these data to launch new services, or they can help Banks, Financial Institutions, to understand their customers more precisely.

CONCLUSION

At the end of the case study of CREAD, all I want to say it is a great app, make your credit card bill hassle easy. Stay conscious about cashback, and don’t overspend only to redeem coins.