I am excited about CRED by @kunalb11 — here’s why

Kunal Shah’s CRED has raised $120 Million at an valuation of $450 million. The concept is simple and that is what makes it revolutionary. Before CRED, there were two options to pay credit card bill (s)— 1. BillDesk and 2. at a bank location. BillDesk has existed for a anyone who has used will attest to the fact that it is cumbersome. CRED is a solution that we deserve and desired.

A few facts about credit cards in India. India has been a credit card (read: debt) shy. We take ‘udhar’ (borrow) and the payment is nakad (cash). No debt is good debt. Things are changing and as evidenced in the chart below, the growth potential for credit cards in India is exponential.

Reserve Bank of India (RBI) does not differentiate between debit and credit cards in India. However, India’s central bank does note that card penetration in India is low.

Source: Benchmarking India’s Payment Systems, June 2019.

It is low in comparison to advanced countries where it is preferred mode of payment. Advanced (western) countries have been aware of benefits associated with credit cards. With FinTech initiatives like CRED, this might change in India.

Another important factor that will spur the growth is the fact that CRED is targeting the right audience with their . As more Indians discover the ‘benefits’ of paying by credit card, they are bound to make the switch. This is an assumption on this author’s part but the potential market for CRED is based on India’s Income Tax returns. This is a conservative number- 1% of India’s population.

No. of returns filed by individuals and their salaries.

RBI is bullish on India’s technology prowess because:

  1. Smartphones eliminate the need for physical PoS making digital payments easier.
  2. Adoption of smartphones is allowing for financial inclusion.

RBI is on new and innovative FinTech companies for the next phase of penetration of cards in India.

Last but not the least, it is youth of country that will propel the country into what could the the deciding decade of the century in Asia. A conservative number for that would be 3,00,000,000 Indians.

RBI puts the growth potential as:

Kunal Shah is a much wiser than this author but here’s what needs to be done next:

  1. First and foremost, he needs to onboard a tactician growth manager like Deepak Abbot. No one knows the payment industry in India like him and he can provide the fuel that can propel this rocket-ship into stratosphere.
  2. Make the benefit’s explicit in the app. The version 1.0 was focused on that but the version 2.0 is hiding the benefits to display personalised information. Useful but not necessary when you onboard new users.
  3. Start a YouTube channel focused on smartphones & innovations. Additionally, build* media relations with consumer technology media in India.

In conclusion, Kunal Shah has initiated efforts in the right direction. If CRED was a listed stock, I would rate it, ‘Buy, buy, buy.’ With the basic Thiel principles fulfilled, next stop - monopoly!

What to watch for next in FinTech? The remittance industry.

  • This author has a background in media & influencer relations and would be invaluable for this exercise.

Authors Note:

Kunal Shah and his colleagues have taken startup guru — Peter Thiel’s advice to heart. The core tenets of a (to be) successful startup as per Thiel are:

Deterrents to credit card adoption in India as per RBI:



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