The CRED Business Model In 2022

CRED is an Indian fintech company founded in 2018 by Kunal Shah, who was motivated to create the platform to solve the trust issues he believed were present in Indian finance. Shah wanted a create an ecosystem where credible individuals could connect and where lenders and other financial institutions could lend money to trustworthy borrowers. The CRED app allows consumers to meet multiple credit card repayments on time and earn points to spend on exclusive offers in return. In April 2021, the company became one of the fastest startups to achieve unicorn status with a valuation of $2.2 billion

CRED now controls 22% of all credit card transactions in India, with various other features added in recent years such as P2P lending, eCommerce, and the ability to pay other recurring household expenses such as rent and utilities.

CRED business model

CRED’s business model is based on three key pillars:

  1. Customers – who pay their credit card and other bills using a single interface that is more intuitive and rewarding than paying through their bank accounts. Customers must have a credit score of at least 750 which increases the likelihood bill payments will be made on time. 
  2. The app – which provides the interface where bills can be settled and CRED coins can be earned and redeemed. The app is renowned for its elegant UI and UX design with a 4.7 rating in the Google Play Store. One unique feature of the app is that it awards coins based on the total amount of the bill that was paid.
  3. Businesses – who provide customers with offers in exchange for increased visibility among their respective target audiences. Businesses also compensate CRED to display their offers inside the app.

Customer value proposition

The company offers several value propositions to consumers who download the seamless and stylish app. They must first sign-up by providing their details and all the credit cards they wish to manage linked to a cell phone number.

As touched on earlier, there are several useful features within the app in addition to credit card payments. These include:

  • CRED Stash – a low-interest line of credit for short-term borrowers that is backed by IDFC First Bank in India.
  • CRED Store – where customers can spend their CRED coins on over 2000 brands including Tata, Puma, and Samsung.
  • CRED RentPay – where customers can transfer their rent direct to the landlord’s bank account using a credit card.
  • CRED Mint – a P2P lending facility that matches lenders with extra funds with borrowers who are short of funds.

How does CRED make money?

CRED makes money in a few primary ways.

Listing fees 

The first is listing fees that it collects from partner brands who list their products and services inside the app. This listing fee is not unlike the fee eCommerce sites such as Amazon charge merchants to display their products.


Whenever a user redeems their points for such an offer, CRED also collects a commission from the business concerned. The company also takes a small commission for every successful loan that it facilitates as part of the Cred Stash

Furthermore, as part of the CRED RentPay functionality, the company collects around 1 to 1.5% of the total transaction amount.

User data

CRED also collects extensive data on its users as they pay bills and otherwise interact with the platform. The company then sells this information to financial institutions that use it to create better credit card and loan products.

Key takeaways:

  • CRED is an Indian fintech company founded in 2018 by Kunal Shah, who created the platform to solve the trust issues he believed were present in Indian consumer finance.
  • CRED’s business model is based on the three key pillars of the customer, app, and business. Customers are vetted for creditworthiness during the application process, which increases the likelihood that bills will be paid on time and that coins will be earned to redeem on partner offers.
  • CRED makes money via listing fees that it charges businesses in exchange for listing their products and services. It also collects a commission from every loan it facilitates and a separate commission from brands whenever a customer redeems an offer.

CRED Connected Business Models

Fintech business models leverage tech and digital to enhance the financial service industry. Fintech business models, therefore, apply tech to various financial service use cases. Fintech business model examples comprise Affirm, Chime, Coinbase, Klarna, Paypal, Stripe, Robinhood, and many others whose mission is to digitize the financial services industry.
Paytm – an acronym of “Pay Through Mobile” – is an Indian financial technology and eCommerce payment company founded in 2010 by Vijay Shekhar Sharma as a recharge platform for mobile phone and satellite television customers then transitioned its mission toward bringing 500 million Indian citizens into a mainstream economy via payments, commerce, banking, investments, and other financial services. The company makes money via its The Paytm Mall (a mobile-based marketplace for the buying and selling of goods). Also, Digital Gold, a service enabling Paytm users to buy, sell and store digital gold. Paytm Bank allows customers to pay for utility, insurance, investment, and loan products from a dedicated savings account.
PayPal makes money primarily by processing customer transactions on the Payments Platform and from other value-added services. Thus, the revenues streams are divided into transaction revenues based on the volume of activity or total payments volume. And value-added services, such as interest and fees earned on loans and interest receivable. As of 2021 PayPal processed $1.25 trillion in total transactions, with net revenues of $25.4 billion, and $4.3B in operating income
Started as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.
Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.
Klarna is a financial technology company allowing consumers to shop with a temporary Visa card. Thus it then performs a soft credit check and pays the merchant. Klarna makes money by charging merchants. Klarna also earns a percentage of interchange fees as a commission and for interests earned on customers’ accounts.

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