Cred Revolutionalized Credit Card Industry

A few years back, I used to dread my credit card due dates 😓

The constant worry about missing payments and the painful late fees were a regular part of my life. Well, that was until Cred entered the market.

It felt like someone had finally made paying bills 🤗... exciting? Sounds crazy, right? But trust me, it works.

Cred takes the mundane task of paying your credit card bills and sprinkles in a bit of magic. Imagine getting rewarded for doing something you already have to do – like getting a treat for taking out the trash!

Every time you pay your bill on time, Cred gives you coins. The best part is you can redeem these coins 🤩 for awesome rewards like discounts, cashback, and exclusive event access.

Feeling intrigued?

Let's dive in to see what drove so much success to Cred.

Cred is a renowned fintech company founded in 2018 and headquartered in Bengaluru, India. Kunal Shah established Cred, an entrepreneur known for his previous ventures in the tech space.

Upon understanding the issues people often face in the credit card market, Cred went creative to improve user experience and financial management.

Cred focused on changing how people managed credit card payments using technology to offer a more rewarding and engaging experience.

Cred now works on a platform-based business model where users can link their credit cards to the platform. In return for making timely payments, users earn Cred coins.

People can redeem these points for various rewards. The platform also partners with brands and service providers to offer tailored deals and benefits to its user base.

Since its launch, Cred has seen notable growth and user engagement. The platform's user base grew from 1 million in early 2020 to over 8 million by 2023.

Cred's successful implementation of its reward system can get the credit for its remarkable growth, which has driven a 40% increase in on-time payments among its users.

The platform has helped users save an average of ₹2,000 annually on late fees. It also has generated revenue through strategic partnerships, with over ₹100 crore in revenue reported in 2023.

Cred's innovative solution has delivered a 5x return on investment (ROI) for its marketing and partnership efforts.

Features of Cred:

• Cred coins: Users earn Cred coins for each on-time credit card bill payment.

• Rewards catalog: Cred coins can be redeemed for a wide range of rewards, including cashback, discounts, and exclusive deals from partner brands.

• Gamification elements: The platform includes leaderboards, challenges, and competitions to make the payment process engaging and fun.

• Credit score monitoring: Users can monitor their credit scores and receive insights on how to improve their financial health.

• Bill payment reminders: Cred provides timely reminders to ensure users never miss a payment deadline.

Problem

Before Cred's intervention, many credit card users struggled with timely payments. Missing payment deadlines was common, leading to late fees and negatively impacting users' credit scores.

According to data from the Reserve Bank of India, approximately 30% of credit card holders in India missed at least one payment in the past year.

Not only did this incur late fees, but also it affected the users' credit scores. On average, late fees range from ₹300 to ₹500 per missed payment, creating a financial burden for users.

There was a need for a solution that would make the payment process more engaging and rewarding. Users did not receive any benefits or rewards for managing their fees responsibly.

It led to lower engagement, and that remained a challenge.

Many credit card users lacked awareness about the importance of timely payments and the impact of their payment behavior on their credit scores. Lack of financial literacy led to late credit card payments.

According to a survey by the National Credit Council, 40% of credit card users in India are not fully aware of how late payments affect their credit history and score.

While financially illiterate people struggled with no financial knowledge, people with expertise often toiled with tracking their payment schedules and deadlines.

Without a centralized system or reminders, users were more likely to forget to make on-time payments.

According to a study by J.D. Power, 35% of credit card holders reported difficulty keeping track of payment due dates, further contributing to the problem of missed payments.

Solution

You may argue that other dominant players in the industry, like Gpay, Phonepe, and Paytm, allow you to pay off your credit card bills. Yet, how far are these applications engaging and interactive?

Cred, having observed this, blended it with common issues that people face with credit cards and became the unique fintech platform it is today.

By offering a unique rewards system, Cred changes the everyday task of bill payment into an engaging and beneficial experience. And here's how Cred makes it all a difference.

Implementation Process

1. User Onboarding

Cred's onboarding process is simple and user-friendly. You can download the Cred app from the App Store or Google Play Store and register using your mobile number. The app verifies your identity and securely links your credit card accounts.

1. Download and Install: You download the Cred app from the respective app stores.

2. Registration: You must register with your mobile number and verify your identity using an OTP.

3. Link credit cards: You can securely link your credit card accounts to the app by providing the necessary details.

4. Verification: Cred verifies the linked credit card accounts to ensure authenticity and eligibility for rewards.

2. Reward System

The core of Cred's solution is its reward system. For every timely credit card bill payment, users earn Cred coins. The number of coins earned varies based on the bill amount and the timeliness of the payment. Users can then redeem these coins for rewards from Cred's extensive catalog.

1. Bill payment: You pay your credit card bills through the Cred app.

2. Earn cred coins: Upon successful and timely payment, you earn Cred coins based on the bill amount.

3. Redeem rewards: You can browse the rewards catalog and redeem your Cred coins for desired rewards, such as cashback, discounts, or exclusive offers.

3. Gamification

Cred includes gamification elements in the app. You can participate in challenges, compete on leaderboards, and earn additional rewards for completing specific tasks or achieving milestones.

This gamified approach makes the payment process more interactive and enjoyable.

1. Challenges and contests: You can participate in various challenges and competitions related to timely payments.

2. Leaderboards: You can see your rankings on leaderboards based on your payment activity and earned rewards.

3. Additional rewards: You can earn extra Cred coins and exclusive prizes for winning challenges or achieving high rankings.

4. Partnerships

Cred has partnerships with several brands and service providers to offer deals and benefits to its users. These partnerships improve Cred coins's value and drive users to make timely payments with incentives.

1. Establish partnerships: Cred collaborates with brands and service providers across various industries, including retail, travel, dining, and entertainment.

2. Curate rewards catalog: Cred curates a diverse rewards catalog featuring exclusive deals and discounts from partner brands.

3. Promote offers: Cred promotes these exclusive offers within the app, enabling users to redeem their Cred coins for valuable rewards.

5. Credit Score Monitoring

Cred provides you with tools to monitor your credit scores and receive insights on how you can improve your financial health. It will educate you about the importance of timely payments and responsible credit usage.

1. Credit score check: You can check your credit scores within the app.

2. Financial insights: Cred gives you personalized insights and tips to help you improve your credit scores.

3. Regular updates: You receive timely updates on your credit score changes and recommendations for maintaining good credit health.

6. Bill Payment Reminders

Cred offers timely reminders and notifications to ensure you never miss a payment deadline. These reminders help you stay on top of your payment schedules and avoid late fees.

1. Set reminders: You can set up payment reminders within the app.

2. Timely notifications: Cred sends notifications and reminders as the payment due date approaches.

3. Payment confirmation: You receive confirmation notifications upon successful payment, giving you peace of mind.

By implementing these innovative features and processes, Cred has addressed the challenges credit card users face, making bill payments more rewarding and engaging while promoting financial literacy and responsible credit usage.

Results

• Cred’s platform has significantly increased the rate of on-time credit card payments among its users. Since its launch, Cred has reported a 40% rise in timely payments.

• From a modest start in 2018, the platform grew to over 8 million users by the end of 2023. Monthly active users (MAUs) increased by 50% year-on-year.

• On average, users save approximately ₹2,000 annually by avoiding late payments. Collectively, Cred users have saved over ₹160 crore in late fees since the platform’s inception.

• Surveys indicate that 60% of Cred users feel more knowledgeable about their credit scores and the importance of timely payments compared to before they joined the platform.

• The platform’s ability to consistently deliver value has resulted in high user retention rates, with over 70% of users continuing to use Cred for more than a year.

• Cred’s innovative model has proven financially successful. The platform reported over ₹100 crore in revenue for 2023. This revenue represents a 5x ROI for Cred’s marketing and partnership efforts.

• The company has raised over $500 million in funding from leading venture capital firms, reflecting strong investor confidence in its business model and future potential.

Conclusion

Cred's innovative approach to credit card payments through gamification, rewards, and financial education has improved user engagement and timely payments. By addressing core user pain points and encouraging financial literacy, Cred has transformed a routine task into an enjoyable and rewarding experience.