Freecharge co-founder Kunal Shah will roll out ‘Cred’ to the masses by December-end that aims to reward credit card users for making timely bill payments and offer various benefits to them. Cred, which is operated by Dreamplug Technologies, had raised $25 million led by Sequoia and Ribbit and supported by DST Gloval, Ru-Net, Lakestar and Morning-side about 6-8 weeks ago to accelarate its expansion plans.
“This is a unusual model that we have set up where we want to reward good actors. Cred will allow users to manage their credit cards, get rewarded on paying their credit card bills in time and also get clarity on the hidden charges related to their cards,” Shah told PTI. He added that the platform, which is in pilot stages currently, will be available for those with credit score (CIBIL score) of above 750 for the programme. The company has received strong response in beta testing phase and will roll out to the public by the end of December, he said.
Cred has already partnered a number of merchants including Airbnb, Cultfit and ixigo and is in talks with many other brands to extend various benefits to its users. Shah had started his entrepreneurial journey when he set up PaisaBack, and then co-founded Freecharge in 2010. Freecharge was acquired for over USD 400 million in 2015 by Snapdeal, that in turn, sold it to Axis Bank for Rs 373 crore.
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Shah said with Cred, the intent is to reward and incentivise those “good actors” who pay their bills on time and follow sound financial practices. This is important given that currently, a large segment of population doesn’t even know their credit scores. He said there about 40-50 million people in the country with credit scores of above 750, and these people are concentrated in tier I and II cities. Asked about the revenue model, Shah said the platform would be free for users and a small fee would be charged from merchants.
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“We will think of revenues a year or so down the line, right now the focus is on building a base. There is a revenue opportunity of USD 1-10 per customer,” he explained. Cred has a team of about 50 people. Shah pointed out that even its employees have a credit score of above 800. “While it did make the process of bringing on board the right talent a bit of an issue, we wanted to ensure that we comply with what we extend to our customers,” he said.