Cred Business Model Explained – How Does It Make Money?

Cred Cover Image

Handling multiple credit cards altogether is not an easy task! You need to take care of timely payments as well as proper management. But what if I say that you can rely on an online application and hand over those tasks to it?

Cred Cover Image

What is Cred and What does it do?

The fintech industry is evolving rapidly allowing users to perform transactions smoothly in the blink of an eye. One such fintech platform is CRED. Kunal (former founder of Freecharge company) founded it in April 2018.

It allows credit card users to manage multiple cards. Thus, you can pay all of your credit card dues, track the expenses, and get exclusive discounts & offers on credit cards. You will also get an analysis of your credit score to access the premium experiences. 

So all the hassle of checking the bills of each credit card separately through bank websites or email is not needed anymore. On top of that Cred gives you cred coins which can be used by you to redeem cashback or coupons of different D2C brands.

Do you know that CRED entered the unicorn club in April 2021 with a valuation of USD 2.2 billion? It is an astonishing fact for a juvenile company to reach such heights of success! The secret behind this is its effective business model. Thus, this article explains the “Business Model of CRED.” We will cover the following points for this topic-

  • Working Strategy
  • Revenue Sources
  • Marketing Strategies

Working Strategy

CRED rewards loyal credit card users who pay their bills on time. This strategy has been effective to attract customers. You just need to register your phone number on this app and it will automatically figure out the number of credit cards linked to your number.

But wait! The process hasn’t finished yet. CRED app will open access to your credit cards only if your credit score is greater than 750 otherwise you will be put on the waitlist. Once your credit score becomes more than 750, you will get access to this exclusive app. 

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CRED will be able to detect, read and scan email statements with details of bank balance, due date, bank costs as well as credit card receipts. Its features help to identify the due dates, track users’ overall expenses, due amounts, credit scores, how the users invest their money, record loan capitals, secret costs, and the services’ statements.

The key players in the working strategy of CRED are-

  • Customers– As we all know; the customers are the treasure of a business. The more the number of customers, the more successful is the business. Similar is the case with CRED. You must be wondering that there are thousands of apps in the play store with which people can pay their credit card bills. Why choose CRED? The reason is the benefits they obtain while using this app. People can pay their credit card bills beneficially through CRED which ultimately increases the popularity of this app.
  • App– The smooth and quick working of the app interface gives a wonderful experience to the users. They can sign up for the app and see all the offers they are eligible for during the payment of credit card bills. If you pay the bills through the CRED app continuously, you will get CRED coins. With these coins, you can win rewards.
  • Business partners– One of the most efficient strategies of CRED is to form tie-ups with various businesses on board. This acts as a symbiotic relationship where both parties get considerable benefits. Cred offers visibility of the partnered business to the customers through the app by charging certain fees. Thus, CRED earns profits and the businesses get exposure to buyers.

Revenue Sources

Cred Rewards & Offers

CRED has multiple sources of revenue. Some of them are-

  • Listing fees: As you have read above, cred earns a significant amount of money from the listing fees that their business partners pay to display their products and services on the CRED app. 
  • Coin redeems: The business partners display various offers on the CRED app regarding their products like fashion, spas, gift cards, etc. The CRED coins that the customer earns by paying the credit card bills are quite interesting. Whenever a user redeems the CRED coins to pick an offer displayed on the app, CRED receives a fee from the businesses presenting that offer. 
  • Data monetization: CRED has access to all of your financial data. Thus, to notify you regarding the continuation of payment of bills and offers in the future, it collects all the financial data. The banks and credit card companies pay  CRED to gain access to that financial data to advertise the credit cards, loan schemes, and other products of their companies to potent customers. 

Marketing Strategies

The marketing strategies of CRED proved themselves to be a game changer. The successful listing of the company as a Unicorn start-up created a huge buzz among the public. CRED utilized the following marketing tactics to gain the limelight-

  • Spot-on platform marketing– CRED efficiently utilized numerous social media platforms to increase its reach among consumers.  Along with Twitter marketing, it engaged with the viral tweets of other brands. It also used celebrities to share and retweet their ads to create awareness in the public.
  • Personal branding– Along with consistent marketing on social media platforms like Twitter and LinkedIn, the founder of CRED- Kunal Shah established his good image as an “inspirational personality.” He was the founder of Freecharge company which was successful too. Also, he engaged with various influencers on Twitter and shared views about the start-up community. Thus, he gained the trust of the public and successfully set up a personal brand. Eventually, it helped him to earn the confidence of consumers in his fintech start-up.
  • Marketing Campaigns– Some of the effective marketing campaigns of CRED aimed at creating an emotional appeal among its target customers. Two famous campaigns were GiveIndia & Bhumi to plant 5 lakh trees with the support of CRED users. To participate in the campaigns the users had to install the CRED app and select the number of trees they wanted to plant to protect the environment.
  • Cred Power Play– It was another successful marketing campaign of CRED during the Dream11 IPL tournament of 2020. Here, CRED offered 100% cashback to the users who paid their bills through the CRED app.

cred sponsor IPL

  • Content Marketing– CRED app belongs to the field of finance. It is a typical topic that needs a thorough understanding. Therefore to educate the customers regarding financial topics and the working of the credit system, CRED focussed on content marketing by creating various blogs and YouTube videos related to these topics of “Finance.”
  • Viral Marketing– CRED knows how to get viral therefore, it uses a viral marketing strategy brilliantly. One such famous example is the viral “Indranagar ka Gunda” ad that used an amazing ad script and famous icons like Rahul Dravid and Tanmay Bhat. This ad was floating on the top position on Twitter.
  • Giveaways & Contests– This is one of the most efficient ways to attract target customers. Winning a reward is a blissful feeling for a human. CRED utilizes this fact and arranges various giveaways and contests. People need to do only two things for this reward- to install the CRED app and to pay their credit card bills through this app. Another giveaway was “Cake from CRED” where CRED sent cakes to the customers’ workplaces who made credit card payments through CRED. This helped to attract the colleagues of the target customers and to increase customer acquisition.
  • Television Commercials– This is the strongest method to reach the audience on a large scale. CRED knows that online marketing will hit the millennials but to grab the attention of Generation Y, it needs to screen its advertisement on television. Thus, in 2020 CRED launched 6 television ads starring Bollywood celebrities- Madhuri Dixit, Govinda, Alka Yagnik, Udit Narayan, Bappi Lahiri, Anil Kapoor, and Jim Sarbh.

Final thoughts

With CRED you can pay all the credit card bills on time. Hence, it will reduce the pressure of handling multiple cards together. Also, it is approved by RBI. Therefore, it is completely safe for regular usage. The marketing strategies of CRED have been the core of its success.

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Published By: Supti Nandi
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