The annual recurring revenue (ARR) base of online financial services marketplace BankBazaar touched Rs 170 crore in September on the back of strong growth in new credit card issuances on its platform. CEO Adhil Shetty told FE that credit sales increased 115% year-on-year which contributed to a majority of its revenue in the second quarter.

This is in line with a significant uptick in credit card and UPI payments according to recent RBI data. The uptick in credit card spending and online transactions also indicates a major shift in consumer spending patterns after a two-year slump due to Covid.

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RBI’s monthly data showed UPI transactions increased from Rs 9.83 trillion in April 2022 to Rs 10.73 trillion in August. In addition, credit card spending through PoS terminals increased from Rs 29,988 crore in April to around Rs 32,383 crore in August. Data further showed that credit card spending volumes on e-commerce platforms increased from Rs 51,375 crore in April to Rs 55,264 crore in August.

“Credit spending volume in the current financial year has been the highest since 2020, and the number of credit card issuances has also hit new records. In FY22, the active credit card base went up by about 20%, the highest in the last five years. So, definitely there seems to be momentum building on the consumer spending scale,” Shetty said.

He added that Bankbazaar’s operational revenue was up by 85% year-on-year with a profitable EBITDA in Q2FY22. However, the start-up did not share the exact numbers. Shetty pointed out that during the festival season, the average ticket size per transaction on various co-branded credit cards stood at around Rs 25,000.

Chennai-based BankBazaar was founded in 2008 by Shetty, Arjun Shetty and Rati Shetty. The startup aggregates financial products such as home, car, personal loans and credit cards offered by different banks. It also offers mutual funds, fixed deposits and NPS services on its platform. Users can visit the app or the website and compare offers across various banks and non-banking financial companies and purchase them online. Bankbazaar usually makes a commission from banks for selling their credit and savings products on its online marketplace and does not charge any commission from users.

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“On mutual funds, it’s hard to make money because the online market has moved to a direct buying model. And the direct product is a zero-commission product. On the NPS product, we are allowed to charge a commission although it is quite low… So our focus from a monetisation standpoint has always been on the credit side,” Shetty said.

BankBazaar plans to file for an IPO by 2023. Till date, it has raised around $115 million, mostly from equity investors such as WSV, Experian, Eight Roads, Sequoia India, Walden International and Amazon.