Consider the older times when buying anything required bartering, whereby another good or service of some worth had to be exchanged for every one that was obtained. The system was unbalanced and onerous at the same time. Numerous of these problems started to be gradually rectified as fiat currency evolved, but the fact that individuals frequently lack enough money to cover their expenses persisted. In these situations, the magic of credit cards, or the practise of making an advance purchase and paying for it later, comes into play.
CRED, a members-only programme launched in 2018, offers its customers special prizes for paying their credit card bills on time.
The platform was created with the intention of simplifying credit card bill payments and rewarding users for on-time payments. The way the application works is straightforward. For Cibil, CRIF, and Experian to check their credit score, they must provide their phone number.
Users are given access to the CRED app if their credit score is 750 or better; otherwise, they are added to a queue. All credit cards associated with the user’s phone number are checked by the app before being added.
Every time a user pays a credit card payment, CRED coins are added to their account. These coins can be burnt to obtain exclusive partner offers in a range of lifestyle areas. These coins can then be used to purchase incentives from companies like Ixigo and FreshMenu in addition to others.
Founder of Cred
Kunal Shah, who interestingly graduated from Mumbai’s Wilson College with a degree in philosophy and has no prior engineering experience, founded CRED. He left the Narsee Monjee Institute of Management Studies (NMIMS) before finishing his MBA.
In addition to serving as the Chairman of the Internet and Mobile Association of India from 2015 to 2017, he has served as an advisor to the boards of Bennett Coleman & Co Limited, Y Combinator, and Sequoia Capital India.
He has served as a mentor for many of Asia’s well-known firms, including Unacademy, RazorPay, Go-Jek, and Zilingo, among others, and is also an active angel investor.
Origin of Cred
After Kunal’s initial business, FreeCharge, was acquired by Snapdeal in 2015, he spent a lot of time travelling and studying industrialized countries. One thing he found in common with these countries was a high level of trust that the system offered to the populace. For instance, they had supermarket self-checkout lanes without cashiers or petrol pumps without staff.
As a result, he came to recognize the benefits of a frictionless environment—one in which all transaction-related expenses and constraints are eliminated. He had emphasized in a LinkedIn article how the public trusted the system since it consistently rewarded them for being reliable and honorable people.
However, in this case, in the Indian nation, the dependable section of the public was made to pay for the wrongdoings of others, and the lack of openness and the irregularity of the information contributed to a lack of trust. He said that the current paradigm is rigid and leaves a lot of room for uncertainty and mistakes, which the reliable part of the population does not deserve. CRED was founded as a result of this.
Revenue Source of Cred
Up to this point, CRED has prioritized user growth over financial success. However, the platform has a variety of potential revenue streams that it can use in the near future.
Cred`s Recent Growth
After 21 months since its launch, the platform has begun to move towards monetizing its service. The platform’s goal is to generate income from four items that it introduced during the lockdown to manage its tasks during the COVID19 epidemic.
The site had established two loan products in April 2020: “Rent Pay” and a credit line. “Rent Pay” was created with the intention of enabling customers to pay monthly rent and other recurring bills using credit cards. In the meantime, the credit line has been established to provide loans in collaboration with banks at a rate that is one-third lower than the market average.
In addition to the revenue share obtained from its credit line offering, the platform hopes to make money by charging a charge for using Rentpay. Additionally, it intends to charge companies for putting their goods on the “Discover” platform, where customers may use CRED currencies to get discounts. The marketing effort for CRED’s platform during the ongoing Indian Premier League (IPL) cricket season has also played a significant role in the platform’s growth.
CRED has been a buzzing phenomenon in the past few months, largely due to the IPL, and has intrigued and piqued the interest of many of the audience, despite not currently making any money and aiming to facilitate personal loans in collaboration with banks and non-banking firms (NBFCs).