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

CRED — is a members-only app that offers you exclusive rewards for paying your credit card bill.

Claim to fame- sale of FreeCharge to SnapDeal. FreeCharge ‘had’ the potential of what PhonePe is today.

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 millennia and 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 platform. 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 1,44,18,835 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 banking on new and innovative FinTech companies for the next phase of penetration of cards in India.

7.7 The role of non-banks in retail payments has increased significantly, owing in part to the growing use of innovative technology that allows non-banks (mostly fintech companies) to compete in areas not yet dominated by banks.

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:

7.12 The most straight-forward approach to have a digital push would be to target the generation which is most responsive to technology and digital age. This “heads down” generation is ready to try out new payment systems / channels as long as they perceive that the rewards are good.

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:

Proprietary technology — In a world of BillDesk using CRED makes life a whole lot easier.

Network Effects — I am part of India’s 10%. We are currently buzzing about a new startup that gives ‘unbelievable benefits’. Benefits like unlimited wine with dinner, passes to Cult.Fit amongst others.

Economics of scale: We will discuss this below. But in a nutshell, the potential for growth is huge. The emergence of CRED will be Sachin Bansal stroke of genius ‘Cash On Delivery’ moment. Recommend Big Billion Startup by Mihir Dalal for details.


By his own admission it is on point:

Deterrents to credit card adoption in India as per RBI:

India is second only to China in terms of number of debit cards issued and is a leader in growth. For credit cards, while the growth levels are good and better than all the benchmarked countries, the number of credit cards issued is not very significant when compared to the group. The reasons for low credit card usage in India are,

(a) demand — where Indian households are traditionally oriented towards savings;

(b) supply — with a majority of the labour force occupied in the unorganised sector with the card issuers in all probability unwilling to take higher credit risks and,

© the Indian ethos to pay for goods and services on purchase instead of running up credit lines.

Communicator by design, data oriented by choice.