Get rewards for paying bills- CRED business model

Cred business model
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A feature of getting rewards for paying bills will always catch the customer's attention. As there is nothing better than getting a gift in return after you pay. CRED is an online application that is launched to offer exclusive rewards to its users for paying their bills. And to aware you of the CRED business model, working structure, how CRED makes money, and marketing strategy we have created the complete story.

CRED is one of the emerging fintech companies that has come up with a unique idea of facilitating a reward system. The user will be getting certain rewards for doing timely credit card transactions from their online medium.

It mainly allows a user to securely store their multiple credit card details with them and give certain reminders to the users to pay their bills before the due date for achieving rewards.

About: CRED

CRED was founded by former Freecharge creator Kunal Shah with a target of delivering a seamless bill payments experience from a single platform. This online payments platform is not able to capture a large number of the audience because Indians are not much used to credit cards.

Only a small portion of the nation's population is the ultimate user of credit cards for making payments. But, the future trend might able to capture a large audience as credit card users.

Along with less credit card user base, CRED also filters its member base by forming an eligibility criterion that allows only the users with 750 or plus credit score are able to join CRED for paying bills. It is very selective about the members because it wanted to showcase trustworthiness among the users and financial institutions it has collaborated with.

Talking about its features then it has timely bill payments with a reminder feature, provides valid credit score to its users, and facilitates multiple credit card management systems. Apart from these features, this fintech company has also introduced a rent payment feature onboard that allows a user to earn amazing benefits by doing credit payments from them.

The CRED users are rewarded with CRED coins and gems that they can redeem for claiming rewards. These rewards are in the form of a rebate, cashback, and discount coupons that allow a user to claim an off while shopping from some prominent brands that are collaborated with CRED. 

Now, let us switch to our main topic of the CRED business model that will derive clarity into its working structure, functions, and facilitation.

CRED business model

Its main objective is to give an advantage to those individuals who are maintaining a valid credit score. And choosing CRED as a payments platform works for the credit card users as a companion to track their payment records and pop reminders for timely payments. 

It also eventually reduces the burden of securing multiple cards and provides a smart check to the users by revealing all the hidden charges levied.

As we all are aware of the fact that Indians are not much habitual of using credit card facilities but surely CRED is also one of the companies that are trying to push the audience to use credit features by bringing in the benefits. 

It will not be right to say this business model is successful but in the future, it might become one of the trending businesses. The CRED business model works on a collaboration with various retail banks and financial institutions to streamline transactions and support. And track all the payments that are made from their portal.

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How CRED makes money?

Currently, the prime focus of CRED is to expand its user base rather than generating heavy profits from the customers. But still, it is able to cover its costing by sharing crucial data with various financial institutions and companies for judging the types of customers. 

This data mainly helps the financial institutions to list out various users which are making timely payments and the users which are not making payments within the due period. This will eventually help the banks to give or not to give credit or loans to the customers from their paying behaviors.

Apart from this, the data is also useful to the businesses for selling their products or services. It gives them the filtered leads that showcase people that are regular buyers or availing of different services very often.

So, they can create those people as their potential customers as these might be willing to buy their goods or services. Example: An apparel brand can use the data that is been generated by CRED, which depicts active buyers, and that apparel brand will quote their products to them so that they can boost their sales.

CRED marketing strategy

As CRED is willing to expand its customer base and reach so building some marketing strategies is very crucial. It has emphasized more on creating marketing campaigns by featuring various celebrities and actors. 

These ads are showcased on various social media platforms and gained a wider reach especially during the 2019 IPL season. And each of the ads is conveying the audience to use CRED for paying credit card bills by quoting a tagline- Get cashback for paying your credit card bills.

Take away

The key takeaway that we derived from this reading was how the CRED business model is impacting the life of credit card users. Also, we deep dive into its features that are offered by this fintech company. 

It includes timely bill payments with a reminder feature, provides a valid credit score to its users, and facilitates multiple credit card management systems. We also read how CRED makes money and is expanding its reach by accepting a good marketing strategy.

Also read: Top fintech companies in India