The CRED Business Model

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.

Element	Description
Value Proposition	CRED offers a range of value propositions for its customers: – Credit Card Rewards: CRED provides users with rewards and benefits for paying their credit card bills through the platform, incentivizing responsible credit card usage. – Credit Score Tracking: CRED offers a feature that allows users to monitor and track their credit scores, helping them manage their financial health. – Exclusive Offers: CRED users gain access to exclusive offers and discounts from partner brands, enhancing their lifestyle and savings. – Bill Payment Convenience: CRED simplifies the credit card bill payment process, offering a convenient and streamlined way to settle bills. – Community Engagement: CRED fosters a sense of community among users, encouraging responsible financial behavior. – Security and Privacy: CRED emphasizes security and privacy, assuring users of the safety of their financial data.
Core Products/Services	CRED’s core products and services include: – Credit Card Bill Payment: The primary function of CRED is to facilitate credit card bill payments for users, providing a single platform for settling multiple credit card bills. – Credit Score Tracking: CRED offers a credit score tracking feature, allowing users to monitor their creditworthiness and make informed financial decisions. – Rewards and Cashbacks: Users earn rewards points and cashbacks when they pay their credit card bills through CRED, which can be redeemed for various offers and discounts. – Exclusive Offers: CRED partners with various brands to offer exclusive discounts and deals to its users, enhancing their lifestyle. – CRED Pay: CRED Pay is a feature that enables users to make payments at select merchants using CRED coins and avail of discounts. – Community Engagement: CRED engages users through its community features, fostering responsible credit card usage and financial literacy.
Customer Segments	CRED’s customer segments include: – Credit Card Users: Individuals who own credit cards and use CRED to pay their credit card bills conveniently and access rewards. – High Credit Score Seekers: Users interested in monitoring and improving their credit scores through CRED’s tracking feature. – Discount Enthusiasts: Customers who appreciate exclusive offers and discounts from partner brands available through CRED. – Financially Savvy Users: Individuals looking to manage their credit card expenses and financial health more effectively. – Community Participants: Users who engage in CRED’s community discussions and forums to learn about financial topics and share insights. – Privacy-Conscious Consumers: Customers who prioritize data security and privacy in their financial transactions.
Revenue Streams	CRED generates revenue through several revenue streams: – Payment Processing Fees: CRED earns a fee from credit card companies for facilitating credit card bill payments on the platform. – Interest on Late Payments: The company may charge interest on late payments made through CRED, contributing to revenue. – Advertising and Partnerships: CRED generates revenue through partnerships with brands that offer exclusive discounts and deals to its users. – CRED Pay Transactions: Revenue is earned from transactions made using CRED Pay, including fees and commissions. – Premium Subscriptions: CRED offers premium subscription tiers (CRED Prime) with additional benefits, contributing to revenue. – Data Insights: CRED may monetize user data by providing insights to financial institutions and advertisers (while maintaining privacy).
Distribution Strategy	CRED’s distribution strategy focuses on accessibility and engagement: – Mobile App: CRED primarily operates through its mobile app, providing users with a convenient way to manage their credit card payments and access features. – User Engagement: The platform engages users through its community forums, discussions, and reward offers, promoting active participation. – Credit Card Partnerships: CRED collaborates with credit card companies to integrate their cards into the payment platform, expanding its user base. – Exclusive Offers: CRED partners with brands to offer exclusive discounts and deals to its users, enhancing the platform’s appeal. – Marketing and Promotion: CRED invests in marketing and promotional activities to attract and retain users, often through quirky and humorous advertising campaigns. – Customer Support: The platform provides customer support to address user queries and concerns promptly.

Table of Contents

CRED business model

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

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.
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.
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.

Commissions

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.

Value Proposition:

Credit Card Rewards Management: CRED offers a platform for users to manage their credit card rewards effectively. It provides tools and features that help users track, optimize, and redeem their credit card rewards, ensuring they get the most value out of their spending.
Exclusive Rewards and Benefits: CRED offers exclusive rewards and benefits to its users, including cashback, discounts, and special offers from partner brands. These rewards are curated based on users’ spending patterns and credit card usage, providing them with personalized incentives to use the platform.
Credit Score Monitoring and Improvement: CRED provides users with access to their credit scores and personalized insights to help them understand and improve their credit health. By monitoring their credit score and receiving tips for credit management, users can take proactive steps to build and maintain a healthy credit profile.
Simplified Bill Payments: CRED simplifies the bill payment process for users by aggregating all their credit card bills in one place. Users can conveniently pay their bills through the platform, saving time and effort while ensuring timely payments and avoiding late fees.

Marketing Strategy:

Word-of-Mouth Referrals: CRED relies heavily on word-of-mouth referrals and recommendations from existing users to acquire new users. It incentivizes users to refer friends and family members to join CRED by offering rewards, cashback, or other incentives for successful referrals.
Digital Marketing Campaigns: CRED employs targeted digital marketing campaigns across various channels, including social media, search engine marketing (SEM), display advertising, and email marketing. These campaigns promote CRED’s value proposition, exclusive rewards, and benefits to potential users, driving user acquisition and engagement.
Partnerships and Collaborations: CRED collaborates with credit card issuers, banks, financial institutions, and lifestyle brands to offer exclusive rewards, benefits, and promotional offers to its users. These partnerships help CRED expand its user base, enhance its value proposition, and increase user engagement through strategic alliances and co-marketing initiatives.
Content Marketing: CRED produces educational content, blog articles, infographics, and videos that provide insights into credit management, financial literacy, and personal finance topics. By offering valuable content, CRED aims to educate and engage users, build brand credibility, and position itself as a trusted advisor in the personal finance space.

Distribution Channels:

Mobile App: CRED distributes its services primarily through its mobile app, available for download on iOS and Android devices. The CRED app serves as the central platform for users to access their credit card rewards, manage their bills, track their credit scores, and discover exclusive offers and rewards.
Website: CRED also maintains a website (cred.club) where users can learn about its services, browse exclusive offers, and sign up for accounts. While the website serves as a supplementary distribution channel, the mobile app remains the primary platform for user interaction and engagement.
App Stores: CRED distributes its mobile app through major app stores, including the Apple App Store and Google Play Store, making it accessible to users worldwide. App store listings provide visibility and reach to potential users searching for credit management and rewards apps.
Referral Program: CRED leverages its referral program as a distribution channel, encouraging existing users to refer friends and family members to join CRED. Referrals drive user acquisition and account sign-ups, expanding CRED’s user base and increasing its market reach through word-of-mouth recommendations.

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.

Key Highlights

Founding and Motivation: CRED is an Indian fintech company established in 2018 by Kunal Shah. The platform was designed to address trust issues in Indian finance and create an ecosystem where trustworthy individuals could connect with lenders and financial institutions.
CRED App and Features: The CRED app offers an intuitive and rewarding interface for customers to manage credit card repayments and earn points for exclusive offers. It has gained recognition for its elegant UI/UX design and high user ratings. The app provides features like credit card payments, CRED Stash (short-term borrowing), CRED Store (coin redemption for brand purchases), CRED RentPay (rent payment via credit card), and CRED Mint (P2P lending).
Achieving Unicorn Status: In April 2021, CRED achieved unicorn status with a valuation of $2.2 billion, becoming one of the fastest startups to reach this milestone.
Customer Value Proposition: CRED’s app offers several value propositions, including seamless credit card payment management, earning and redeeming CRED coins, access to short-term credit (CRED Stash), and unique services like CRED RentPay and CRED Mint.
Business Model Pillars: CRED’s business model is built on three pillars: customers, the app, and businesses. Customers with a credit score of at least 750 can pay bills and earn rewards through the app, creating a creditworthy user base.
Monetization Strategies: CRED generates revenue through listing fees from partner brands that showcase their products and services on the platform. It also earns commissions from redeemed offers and successful loans facilitated through CRED Stash. Additionally, CRED collects a transaction fee from CRED RentPay.
User Data: CRED collects user data as they interact with the platform, providing valuable insights. This data is then sold to financial institutions to enhance credit card and loan product offerings.