Cred gets RBI's in-principle approval to become payment aggregator

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Fintech firm Cred has received the Reserve Bank of India's in-principle approval to be a payment aggregator (PA), according to a source close to the development.

Being a PA helps companies to manage and move customers' money to merchants. This is not a final approval or license, which will be granted in around six to twelve months, but those who get in-principal approval can continue business unless told not to by RBI.

Bengaluru-based Cred is the largest third-party app for credit card bill payments in the country. It also runs a small e-commerce, vehicle management and a curated travel package platform among other products and services.

Kunal Shah-led company has more than 15 million active customers and is also the fourth largest Unified Payments Interface (UPI) player with a 2.3 percent volume market share in the country's largest digital payments platform.

A couple of months ago, Cred acquired Kuvera, to enter the wealth management space. Kuvera had around three lakh affluent customers using its wealth products. Among the various products are mutual funds and fixed deposits (FD) stand out to be the most popular, besides other offerings like SIPs (systematic investment plan), international equities (commercial arrangement with Vested Inc), pension fund, and digital gold.

Cred has reported Rs 1,400 crore in revenue from operations for FY 23, a 256 percent growth over the Rs 393 crore that the company reported in FY22. Its losses grew marginally to Rs 1,347 crore in FY23, widening by 5 percent from Rs 1,280 crore in FY22. as Cred reduced its customer acquisition cost by around 80 percent over the past four years.

From late last year, multiple payment gateway companies have been receiving RBI's final approval to be a PA. These include Razorpay, CC Avenue, Cashfree, Zoho, Tata Pay and EnKash among others.