Travel fintech firm Scapia has launched a dual credit card in partnership with private sector lender Federal Bank, based on a single credit line for customers.
Scapia users can see a unified credit card statement, and a single bill is generated at the end of the billing cycle. The company targets young millennials and Gen Z customers who are looking for travel offers and rewards.
The cobranded card issued and managed by Federal Bank has a Visa version that is expected to be used internationally, and a Rupay version that is expected to be used mostly for Unified Payments Interface (UPI) payments.
“People don't like managing multiple cards and paying different bills, but also people are looking for options to pay, like sometimes you want to pay on UPI, sometimes you want to pay on the point of sale (POS) machine, you want to tap the card, sometimes you want to pay online, you get a choice,” Scapia founder and CEO Anil Goteti told Moneycontrol on June 12.
According to Goteti, customers are frustrated with the long bank statements because of the UPI payments, and the company’s dual cards with a single statement offers them a unique solution to merge all their payments into one app while also earning rewards for both UPI and card payments.
Targeting travellers
The Bengaluru-based company, founded in 2022, also offers zero forex markup on international spends using the card. Goteti said that the card has been used by customers in more than 100 countries since its launch.
There are a few other fintechs, such as Uni, Jupiter and Niyo, that offer zero forex markup cards. Some of these products are debit or prepaid, while some are credit cards. Banks also offer zero forex markup prepaid forex cards.
Scapia, which raised $40 million recently, provides 20 percent rewards as Scapia coins to users for spending within the app. Five Scapia coins are equal to Re 1, which translates into a 4 percent cashback on travel and accommodation bookings on the app.
The company offers 10% rewards or 2% cashback for all other card payments.
Unlike some of the large platforms such as Amazon, Flipkart, PhonePe which partner with online travel aggregators to provide a supply of hotels and travel bookings, Scapia directly partners with hotels, airlines and IRCTC (for trains).
Focus on user experience
“We like to control our experience and build it ground up. If you work with the OTA partner, we have to understand what their experience is, what their search algorithm is, how their payment system works, how their customer service works, all of that. So we have built an entire OTA on our own, and control it end-to-end,” Goteti said.
This probably helps Scapia to get better margins. In a co-branded card business, the fintechs or brands provide the sales, marketing and distribution while the banks take care of the underwriting, issuance, technology and collection. The profits are shared between the brand and bank.
According to RBI data for April, Federal Bank has around 12 lakh active credit cards in circulation. Scapia did not disclose the number of users it has, but it will be a subset of Federal’s customer base.
Scapia is also launching a smart train ticketing system, which suggests alternative options when a ticket is not available to the destination of the customers’ choice. The company also offers hotel booking through map view, similar to Booking.com and Airbnb, close to landmarks or tourist destinations.
The company is still in a growth and investment phase and is not looking at profitability.
“It is all about growth right now, I need to invest in marketing brand, acquiring a lot of customers, and I am investing in product and technology. We have a good business model, so we are not looking at profitability in the next couple of years, at least. We are investing to make sure our product continues to be very innovative,” Goteti said.
Scapia customers make around 8-10 transactions per month, and their monthly spending is also 25 percent higher than regular credit card customers, according to the company.
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