CRED goes beyond credit card bills as it begins utility bill payments

CRED, after sticking to upscale offerings till recently, seems set to tread into areas where it is likely to go up against mass volume players including Paytm, PhonePe, GooglePe and MobiKwik. This is a direct outcome of its need to keep its growth momentum going and add more users. The signals were always there when it went for a mass property like the IPL in a big way as a sponsor to expand its user base, first in 2020. That association has only become bigger in 2022. 

CRED has now added mobile, DTH, FASTtag recharge options along with utility bill payments such as electricity, water bills and municipal tax through the app.

The Kunal Shah-led company has been offering cashbacks to compete with the aforementioned companies. With these features, CRED will also compete with Shah’s previous venture Freecharge which is now owned by Axis Bank. 

Over the past year, CRED has been exploring new avenues to make money. Apart from its core credit card payments business, the company runs its own e-commerce platform, peer to peer lending and house rental payments vertical. 

CRED primarily generates revenue from lending, e-commerce distribution platform, convenience fees, advertising and commission. 

According to experts tracking the company, the new features are positioned to retain users and their money (payments) inside its ecosystem. “CRED has around 6 million credit card holders on its platform and the company will leave no stone unturned to make existing users recharge and execute utility payments,” said one of the experts requesting anonymity.

Digital payments such as recharges and utility bill payments, wallets and shopping were the top spending categories in 2021, as per a report issued by CRED named CRED Insight during late last year.

“Expenditure on recharges and utility bills are usually consistent all round the year as compared to shopping, travel et al. Hence including them inside the app makes sense,” added the above quoted person.

The last fiscal year has been a notable one for CRED which had managed to raise $466 million during FY21. Its revenue also soared 170X and crossed  Rs 88.6 crore mark during FY21 while losses increased by 45% to to Rs 523.85 crore. 

The company also acquired Hipbar and expense management firm Happay. Entrackr was the first to report Happay acquisition.

Adding utility payments and other bills is seemingly the simplest way to turn the dial too high as far as transaction volumes go.  However, cashbacks, which CRED has turned into a fine art, are still under a cloud in their ability to acquire and more importantly retain customers in India, at least till the next, bigger offer comes along. 

For CRED, getting in late, at a time when the ‘established’ players suffer from cashback fatigue after years of heavy losses and in the case of Paytm,  public scrutiny now, the route might yet make sense with its core user base of ‘premium’ card users. 

Once again, while volumes might not ramp up, value probably will, as these users will be in higher consumption categories for these services too.  The template for the next exponential jump in revenues for 2022-23 might just have been set.