What is CRED?
If you hear it at first, it’s pretty Simple, CRED is a mobile platform where you can pay your credit card bills, get ‘cred coins’ for doing so, and redeem these coins for rewards from a wide collection of brands. This is Kunal shah’s second sound fintech startup after Freecharge.
How Cred began
After his first successful start-up, FreeCharge was sold in 2015, Kunal spent a lot of time traveling and, curiously enough, studying developed nations. The one thing that stood out was that the system (i.e., the government and government-backed systems) placed a high level of trust on individuals.
In developed nations, it is common enough to see petrol pumps with no attendants and supermarkets having self-checkout counters with no cashiers. That led him to realize the benefits of – “a frictionless environment – an environment that creates financial progress for its citizens” – that people trust that system.
People trust the system in Developed Countries because the system consistently rewarded good, trustworthy individuals. But In India, trustworthy individuals kept paying a price for the actions of others.
There are over 30 hidden charges and exorbitant interest costs that haunt you even if you pay a single rupee less than your full bill. The current model thrives on you making an error. It wants you to faulter. The system has taken the good guys for granted for far too long. Creditworthy individuals deserve better.
Kunal Shah – Founder, CRED
And that is what CRED is all about. As Kunal puts it:
“I felt the need to create a system that rewards trustworthy and creditworthy individuals of India and inspires others to be like them.”
CRED, therefore, is a community where members will be celebrated and rewarded for paying their credit card bills. According to Kunal, the goal is to help members discover ways to reduce cost, get better rates on loans, insurance, and investments, and “literally everything money”.
According to the Reserve Bank of India, as of October this year, there were close to 42 million credit cards and 990 million debit cards in the country.
Kunal also told PTI that there is a revenue opportunity of US$1-10 per consumer. As per the company’s website, CRED has partnered with over 38 brands, including the likes of Freshmenu, BookMyShow, AirBnB, Cure.fit, UrbanLadder, Bodycraft. About 35 associated banks are also listed on the site.
Cred has till now raised approximately Rs.177 crore as part of its ongoing Series A round. In September last year, Cred raised Rs 134.75 crore as a part of its Series A round. Ru-Net Investments invested Rs 17.7 crore in October last year while Hong Kong-based M Vision invested Rs 7.09 crore in November 2018.
Setting up an Account – the process
Setting up an account and adding your credit cards to it is a fairly easy process if you follow the simple, step-by-step instructions. The app opens with a fluid animation of the logo, followed by a description after which you are asked to ‘apply’ and enter your phone number.
Once you enter your mobile number, CRED sends you an OTP to your phone for instant verification. Next, you must enter your name and number. The app then verifies these details with the RBI to fetch your card details. If your credit score is above 750, you get access.
It doesn’t matter how many credit cards you have, if they’re connected to your mobile number, CRED will add them to your account. you verify each card by filling in the missing digits of the credit card number. The app will then ‘credit’ your account with Re 1 for confirmation.
The core idea of the app is to reward people for their good credit habits.
Once your account is set-up, you get rewarded as soon as you’re in. To start your CRED journey, the app awards you one ‘cred coin’ for every point on your credit score. For instance, if you have a credit score of 780, you get 780 Cred coins.
Also, for each rupee you pay on your credit card bill, the app awards you an equivalent number of Cred coins. You can redeem these coins for rewards from over 40 brands that CRED has partnered with.
They range from RAW Fresh Juice, Freshmenu, ixigo, Airbnb, Cure.fit and UrbanLadder to UrbanClap, Bodycraft and Myntra. With your cred coins, you can reward yourself to a free tea cake for as less as 750 coins to a free flight ticket for 2,00,000 coins.
How do we Rate CRED?
There has already been a lot of hype around CRED. After all, Kunal had already made headlines by raising $30 million for this new, previously unannounced venture from a group of investors led by Sequoia Capital.
And likewise, with the launch of the app, users have not shied away from sharing their reviews of the app, most of it is positive. The major advantage, we all agree, is the rewards – after all, it is the only platform that rewards creditworthy individuals.