CRED Business And Revenue Model - How Does CRED Work?

CRED is a Fintech platform based in Bengaluru, India, that offers a range of services related to credit card payments, rewards, and management. The company was founded in April 2018 by Kunal Shah, the former founder of mobile wallet company Freecharge.

CRED allows its users to make credit card payments through its app and provides access to exclusive offers and discounts. The platform also helps users manage their credit card bills, track expenses, and earn rewards points for paying bills on time. With CRED, users can handle and pay off all their credit card dues in one place.

In April 2021, CRED became a part of the Unicorn Club - a group of privately held startups valued at over $1 billion - with a valuation of $6.4 billion. This achievement was accompanied by a funding round led by Falcon Edge Capital and Coatue Management LLP for $215 million.

CRED's ability to achieve Unicorn status in just over two years since its inception is a testament to its successful business model. The company's focus on providing a user-friendly platform with added value to users through rewards and benefits has proven to be a winning strategy, attracting significant investment from leading investors in the industry. In this blog post, we will explore the various aspects of CRED's business model and examine how it generates revenue.

What is CRED?
Business Model of CRED - How does CRED work?
CRED Revenue Model - How does CRED make money?
Is CRED App Safe?

What is CRED and How does it work?

CRED provides the ability to reduce the pressure of handling multiple credit cards and to help pay credit card payments on a timely basis. Users earn points that can be used towards prompt purchases through the CRED application. In 2015, Kunal Shah sold Freecharge and was looking for an alternative concept to change people's lives.

During his study, he found so many automatic products in developed countries, such as supermarkets with no cashiers, gas stations without an attendant, etc. but there's no such reputable mechanism that will allow people with zero extra charges to pay the correct amount of credit card bills in due time. It is best for creditworthy people. But the question was why people should pay their bills through credit cards through their APP, and so the idea came to reward the loyal credit card users who paid their bills on time. CRED was introduced in April 2018 with this plan to draw consumers.

CRED's User-Friendly Platform

One of the key elements of CRED's success is its user-friendly platform. The company has made it easy for users to manage their credit card bills and rewards in one place. The app offers features such as bill reminders, payment tracking, and the ability to earn rewards points for paying bills on time. This has made CRED a popular choice among credit card users in India, who appreciate the convenience and simplicity of the platform.

Download and type your cell phone number in the CRED App. The app checks the cards connected to the registered phone number until the account has been configured. If the credit score is greater than 750, users would be allowed to use the exclusive app. Otherwise, they have been sent to the waitlist. When access is open, CRED apps will have access to the mail identification to read and scan the credit card receipts, such as due dates, the services' statements, etc.

• CRED provides you with one location to handle your entire credit card range.
• Whenever you pay your credit card bills, certain CRED coins are issued that you can use to earn discounts on different CRED partner products.
• It analyses the overall expenses and secret costs, records loan caps, and advises you of all this so that extra charges can be avoided.
• CRED security is the app's functionality that reads email statements with details on balance, due date, bank costs, and bifurcation of expenditures.
• The smart statement feature allows consumers to simplify costs by reviewing the CREDit card statements.

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Business Model of CRED - How does CRED work?

CRED's unique approach to credit card management includes rewarding users for paying their bills through the app. To provide these rewards, CRED partners with businesses to offer exclusive discounts and incentives. This partnership is beneficial for both CRED and the partnering businesses.

By offering discounts and incentives, businesses gain exposure and traction on a platform where people are already spending, increasing their customer base and revenue. On the other hand, CRED is able to attract more offers to display on its application, providing users with more reasons to join and pay their bills through the app.

This mutually beneficial partnership has been a key factor in CRED's success, as it has allowed the company to build a loyal user base and establish itself as a leader in the Indian fintech space.

CRED's Business Model

CRED's business model is built on three pillars - its customers who pay credit card bills, the CRED app, and the businesses that provide offers on the app. Each of these pillars plays a crucial role in CRED's success.

1. CRED's Customers - CRED's customers are an essential component of its business model. While many people use payment apps or log in to their bank accounts to pay their credit card bills, CRED provides an attractive alternative by offering rewards and incentives. As more people use CRED to earn benefits, they share those benefits more widely, creating a network effect that strengthens CRED's position in the market.
2. CRED App - The CRED app is a key component of its business model. The app provides users with a user-friendly interface to see all the available offers on paying their credit card bills. As users continue to pay bills, they accumulate CRED coins, which they can redeem for rewards.
3. Businesses That Provide Offers On The App - are crucial for CRED's business model. By bringing businesses on board and forming tie-ups with them, CRED provides small and large businesses alike with visibility as buyers of all types use the app. This partnership is beneficial for businesses, as it allows them to increase their customer base and revenue while also providing users with more rewards and incentives to use the app.

In order to access CRED programs, a credit score of more than 750 must be obtained. This application also allows users to share certain data such as credit card numbers, access to emails to track users' expenses and due amounts, credit scores, and how they invest their money. CRED rewards its users with CRED coins for bill payments, which can later be redeemed with the offers available. In simple terms, CRED provides a basic incentive to make prompt bill payments. To make offers more attractive to the users, CRED partners with various businesses. In turn, businesses achieve exposure to buyers from all walks of life.

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CRED Revenue Model - How does CRED make money?

CRED earns money from listing fees that businesses pay to display their products and offers on its app. Moreover, financial institutions have access to the financial data collected from users in order to tailor their offers accordingly.

• Through CRED, you can access products and offers from businesses that have paid to access Discover. Among the offers are fashion retailers, spas, Amazon gift cards, and more. These offers give their users a variety of rewards to pick from. As a result, it attracts users' attention. CRED receives a fee from the business every time a user redeems CRED coins from the app to pick an offer.
• CRED collects your financial data as you use the app and continue to pay your bills to offer you better offers in the future. This is their second source of revenue. Institutions are always searching for the most reliable customers to use their credit cards, loans, and other products. To gain access to this data, banks and credit card companies pay CRED.

CRED has no single best source of revenue. CRED has a varied product/service span - Rentpay, CRED Stash, Store, Credit Card Payments, and CRED Pay.

• CRED Pay was developed in partnership with Razorpay and Visa. It provides brands a D2C channel by offering them an instant payment experience on their platforms.
• CRED's RentPay allows tenants to pay monthly rent using a credit card, which directly transfers the amount to the landlord's bank account. The main advantage here is that the app helps users get an interest-free credit period on rent and also lets them earn reward points on their credit cards. CRED will charge users a transaction fee of 1% - 1.5%, depending on the user's credit card network.
• CRED Store is a member-exclusive selection of products and experiences at special prices. You receive CRED coins every time you pay your credit card bills on CRED. These coins can be used to win exclusive rewards or get special access to curated products and experiences.
• CRED Stash is a digital lending platform that makes a personal credit line available to users completely online. Here, the Registration/ Subscription Charges are Nil. However, the bank charges interest on money borrowed displayed on the app while availing the loan.
• CRED Mint is a P2P lending product launched by CRED in partnership with Liquiloans, offering up to 9% interest per annum to lenders who invest between ₹1,00,000 and ₹10,00,000. The invested amount is lent out through CRED Cash to high-trust individuals, and over Rs 2415 crore has already been disbursed through regulated partners.
• CRED Travel: CRED users can use the app to purchase flight tickets, book hotels, and manage their culinary expenses while earning CRED coins to redeem products from the CRED store.

Is CRED App Safe?

CRED App is RBI-approved. Hence, it is safe.

As a fintech platform, CRED takes security very seriously and implements various measures to ensure that its app is safe for users. Here are some of the security measures that CRED has in place:

1. Two-factor authentication: CRED requires users to verify their mobile number and email address during registration. Additionally, the app uses two-factor authentication (2FA) to provide an extra layer of security during login.
2. Secure payments: CRED uses industry-standard encryption and secure servers to ensure that all payments made through the app are safe and secure.
3. Privacy protection: CRED is committed to protecting user privacy and ensures that personal data is stored securely and never shared with third parties without consent.
4. Monitoring and fraud detection: CRED continuously monitors user accounts and transactions for suspicious activity. In case of any suspected fraud or security breach, the company takes immediate action to protect user accounts and data.
5. Regular updates and maintenance: CRED regularly updates its app to fix any security vulnerabilities and enhance its security features.

Overall, CRED has a strong focus on security and implements various measures to ensure that its app is safe for users. However, it is important for users to also take their own precautions, such as using a strong password, not sharing personal information with anyone, and keeping their app updated.

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Conclusion

CRED's innovative approach to credit card management and payments has made it a leader in the Indian fintech space. By focusing on providing a user-friendly platform with added value to users through rewards and benefits, the company has been able to differentiate itself from other credit card management platforms. CRED's revenue model is primarily driven by transaction fees and commissions earned through its rewards program. As CRED continues to expand its offerings and user base, it will be interesting to see how its business model evolves to drive even more revenue in the future.

FAQs

What is CRED?

CRED is a Fintech platform headquartered in Bengaluru that allows its users to make credit card payments through its app and get exclusive offers. It was founded in April 2018 by Kunal Shah.

How does CRED work?

CRED rewards its users with CRED coins for bill payments, which can later be redeemed with the offers available. In simple terms, CRED provides a basic incentive to make prompt bill payments. To make offers more attractive to the users, CRED partners with various businesses. In turn, businesses achieve exposure to buyers from all walks of life.

How CRED makes money?

CRED generates revenue through two main sources:

• Listing fees: Businesses pay CRED to list their products and offers on the app. This helps them reach a wider audience and attract new customers. CRED earns money by charging a fee for this service.
• Data monetization: As users continue to use the app and pay their bills, CRED collects and analyzes their financial data to offer them better deals and rewards in the future. Banks and credit card companies pay CRED for access to this data, which they can use to improve their own services and products.

Is CRED Safe?

CRED is approved by RBI (Reserve Bank of India). Hence, it is safe.

What is CRED Club?

CRED serves as a members-only club, which offers several rewards to the individuals, like exclusive offers and other premium experiences if they happen to pay to make their credit card bill payments timely. CRED club helps users manage multiple credit cards, which they can do along with an analysis of their credit score.

How to redeem CRED coins?

If you need to redeem CRED coins, you would have to check on the "burn" option, which will help the credit card users automatically credit the points to their credit card in the form of cash after they utilize the credit card for bill payment.

What are CRED rewards?

CRED rewards are the offers and rewards that the Kunal Shah-led CRED offers the CRED users with.

What is CRED Mint?

Founded by CRED, CRED Mint is a community-driven product that helps CRED members earn up to 9% interest per annum on idle money, which they can gain by lending to other CRED members with a 730+ credit score. CRED Mint was launched with the company's collaboration with Liquiloans.

What is CRED 2023 revenue?

The CRED's revenue in 2023 was reported to be Rs 1484 crore.

Can I trust the deals and discounts offered on CRED app?

Yes, the deals and discounts offered on the CRED app are genuine and verified. CRED partners with trusted businesses to provide these offers and ensures that they meet certain criteria before listing them on the app.

What are the benefits of using the CRED app?

Using the CRED app has several benefits, such as earning rewards for paying credit card bills, getting access to exclusive deals and discounts, and tracking your expenses in one place.

Is CRED app only for credit card users?

Yes, currently, the CRED app is only available for credit card users. It allows them to manage and pay their credit card bills more efficiently while earning rewards in the process.

How does CRED app work?

Cred is a credit card bill payment app that rewards users with cashback and discounts for timely payments. Users link their credit cards, pay bills through the app, and earn perks from various brands. The app also offers credit score tracking for financial monitoring.