How does CRED makes money? | Business Model of CRED

In the past decade, several fin-tech ventures started emerging around the world in which India stood second among the total number of fintech startups.

While talking about the emerging fin-tech startups of the country one can’t ignore CRED which was started in 2018 by Kunal shah (founder of Freecharge).

What is CRED?

Cred is a platform to reduce the hassle of managing multiple credit cards and helps in making timely payments of credit card bills. Also, on making timely payments with the CRED app users receive points that can be redeemed with rewards from its partners.

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How to be a member of the CRED club?

Firstly, to enjoy the benefits of CRED one has to be a member of the CRED club. CRED membership is offered based on the credit scores of the users. In India, a person’s credit scores range between 300-900 which is calculated by the credit bureau like CIBIL, Equifax, Experian.

Also, as mentioned on the CRED official website a credit score of more than 750 is considered as good and can be marked as a sign of CRED exclusivity club.

Revenue Sources of CRED

Currently, CRED is not making any profits and looking to expand its user base. If we focus on the possible revenue sources of CRED there can be multiple in the future.

The first possible source can be through data monetization. As mentioned in CRED privacy policy they won’t sell data to 3rd parties, but they can use data to enhance and personalize user experience. Also, the privacy policy can be easily modified as per the product-market fit.

As we all know in today’s world data is as precious as oil and can be exploited in multiple manners to make benefit from it. CRED has users’ financial data like how timely users made payments of the bill, their expenditure data, their credit scores data, and many other financial data.

As they have data on our expenditure with that they can make the pitch of different products and can sell them. Also, providing credit score data to lenders can help lenders to identify defaulters and prevent them from scams. Therefore they can make multiple use of users’ financial data in the future and can make a profitable business model around it.

Also, currently, CRED points can be redeemed with multiple rewards form its different partners. They can also charge form their partners on making a deal with them.

Is CRED app safe?

CRED is founded by Kunal Shah who previously founded Freecharge which manages more than millions of users and CRED is already running for more than two years. So, it seems that CRED is fully authentic and safe to use.

Is cred approved by RBI?

As for you to be the CRED member you have to allow app to verify details with RBI and if your credit card score is more than 750 you are good to go for the benefits.

How do I spend my cred coins?

As you make payments with your credit card you earn CRED coins which you can use to claim rewards from different vendors available. You can also use the “BURN” option for the cashback which got credited to your personal card.

Facts and Updates:

• In FY20 CRED’s total expenses were around Rs. 378.39 crores which got increased from INR 63.90 Cr in FY19.
• Also in FY20 company reported a loss of INR 360.31 Cr which was INR 60.86 Cr in FY19.
• In 2020 CRED is currently valued at more than $800 million after its Series C round where they raise $80 million.

Do tell us what you think!

Do tell us all your thoughts in the comments section below, we look forward to reading all the comments in the section below.

Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business strategies and concepts, and no bullshit!!

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FAQS

What is CRED?

CRED is a platform to reduce the hassle of managing multiple credits cards and making their payment. Also, on making timely payments with the app users receive points that can be redeemed with rewards from its partners.

How CRED makes money?

The first possible source can be through data monetization. As mentioned in CRED privacy policy won’t sell to 3rd party but they can use to enhance and personalize user experience. Also, the privacy policy can be easily modified as per the product-market fit.

How to be CRED member?

Firstly, to enjoy the benefits of CRED one has to be a member of the CRED club.
CRED membership is offered based on the credit scores of the users. In India, a person’s credit scores range between 300-900 which is calculated by the credit bureau like CIBIL, Equifax, Experian.
Also, as mentioned on the CRED official website a credit score of more than 750 is considered as good and can be marked as a sign of CRED exclusivity club.