Cred's Kunal Shah doubles down on affluent users, launches unified financial data platform

“More money, more problems. For the affluent, managing finances often means more complexities leading to anxiety. We have built a product that improves every affluent person’s relationship with money and makes them less anxious about it. This is for those who wish to have a greater control over money without the pain of doing it,” said Kunal Shah, founder of Cred.

ICICI Bank, Axis Bank and Fi Money have similar apps that provide a unified platform for multiple bank accounts and all financial transactions in one place. When customers pay their utility bills, insurance premiums or subscriptions through a fintech payment app, most platforms do give the customers a unified view.

“Cred has now taken the unified view to a new level and what others have done in bits and pieces. However, many affluent customers and banks are already concerned with the kind of financial data of customers that Cred has. Now they will be even more wary of the app given the lack of commensurate benefits from sharing all this data,” said a former digital banker who runs a fintech consultancy now. The person spoke on the condition of anonymity.

Moneycontrol had reported last month that Cred’s user growth has plateaued at 13 million customers over the last 18 months, even as it expanded beyond credit card payments to offer wealth management, e-commerce, travel and automotive products and services in the last few quarters.

To be sure, the company has seen its UPI transaction volume market share almost double from 0.5 percent last April to 1 percent in the first three months of 2024. In terms of value, the company’s market share has inched up from 1.5 percent to 2.3 percent this year.

Doubling down on affluent customers

Cred has in between started acquiring customers with relatively lower credit scores in mid-2022, but those customers were not generating many transactions or buying more products and services on the platform. So, the company has gone back to its original thesis of having customers with higher credit scores by mid-2023.

The company seems to be doubling down on the premium customer strategy and is trying to go for deeper engagement with these customers rather than targeting a wider customer base.

Cred recently launched a luxury rewards programme under the 'Only Fridays' branding, where the company offers premium headsets and speakers, luxury watches, Playstation, designer clothing and accessories among others.

The programme is limited to customers with more than one million Cred Coins, which customers get when they pay credit card bills. Cred offers one coin for one rupee of credit card bill value, which means that these customers have at least paid a cumulative credit card bill amount of more than a million rupees on the platform.

“Even within Cred, the company saw that there were rich and upper-middle-class clientele, whose spending patterns and expectations were not the same. Since there was a lot of backlash on social media that Cred Coins are worthless and many affluent customers had run up to multiple million of those coins, it made sense to offer differentiated luxury rewards programme to keep them engaged on the platform. It seems to have worked well for the company. You cannot fault them for not innovating,” said a senior former executive at Cred, who left the company early this year.

Even among the most affluent customers, UPI is gaining popularity hence Cred’s approach to aggressively target the real-time mobile payment customers even as its core offering revolves around credit cards.

UPI payments are growing at a much faster clip than credit card payments, even among affluent customers. Targeting this segment seems to be working for Cred, as even without many customer additions, the company’s UPI share has grown well. With several banks now offering credit cards that can be linked to UPI, it makes even more sense to keep UPI on an even keel with cards.