CRED: How does this member-only club make money?
- Shubhang Kulkarni
- Apr 19, 2021
- 2 min read
With the IPL kicking off, our experience with ads on the Star network as well as on-game, hasn’t been great. Quite a few companies, a few established and few startups have sponsored this year’s IPL. One of them is FinTech entrepreneur Kunal Shah’s (who previously owned Freecharge) CRED, a recent ad of which, featuring cricketing legend Rahul Dravid went utterly virally on social media. Not just ads in between overs, CRED’s ads feature in-game too. Commentators request the viewers to pay their credit card bills via CRED during the powerplay (CRED Powerplay) and the 13th over (CRED Jackpot) to avail exciting offers. So what exactly is CRED and how does it make money?
Image Courtesy: cred.club
What is it?
CRED is a free-to-use members-only app available on the PlayStore and AppStore that allows you to pay and manage your credit card bills through the beautifully designed app. The app’s UI is attractive and easy to use (in reference to images on their website). And its aesthetic too is great, you can’t find a single capital letter except in the word ‘CRED’ and ‘Download’ on their website homepage. It’s accessible to every person with a credit card and a minimum credit score of 750.
Not just your credit cards bills, but you can also pay your monthly house rent via the RentPay feature. Using either of these features is rewarding. Every time you pay your bills and reach certain milestones, you avail CRED coins, which can be redeemed at certain stores only, some of which include Tata CLiQ, Ajio, Puma, Samsung and Myntra.
Image Courtesy: Business Insider India
CRED allows you to play your credit cards bills, with constant reminders, on time and rewards you CRED coins after every few transactions. So what’s it gaining? Nothing? Absolutely not.
How does CRED make money?
As mentioned earlier, you can avail offers at specific brands by redeeming CRED coins that’re earned in the process of paying bills. I mention ‘specific’ brands because you can spend your CRED coins only on brands that pay CRED to feature in the app and in-turn get more customers to their platform. This’ CRED’s primary income, as of now.
One other minor source of income for CRED is the RentPay feature’s service charges (1.5% including GST)
Second and quite a significant source of income is the collection of data:
CRED collects user data including credit card details, spend pattern and credit score of course. CRED, in its Privacy Policy clearly mentions that except for legal purposes, to regulatory and governmental authorities, user data is not sold to any third-parties.
This data is mainly used to improve your experience with CRED, by featuring relevant offers on your app.
NOTE: Everything above is based on a small research I did, out of curiosity. Some of the articles I referred to, are:
moneymodels.org ; startuptalky.com ; business-standard.com ; finmint.com. Thanks to them!
Thanks for reading till the end. 🙂
Hope you found it informative.
Comments