Strengthening foothold in India's burgeoning digital payments market, after Paytm, which announced its Paytm First credit card on Tuesday, ride-hailing company Ola today launch its own credit card in partnership with the public sector lender State Bank of India and Visa.
Strengthening foothold in India’s burgeoning digital payments market, after Paytm, which announced its Paytm First credit card on Tuesday, ride-hailing company Ola today launch its own credit card in partnership with the public sector lender State Bank of India and Visa. Ola is looking to issue 10 million credit cards by 2022.
Through the Ola app, users would be able to apply (with no joining fee), view, and manage the credit card. The card, which comes with lifetime validity, would offer “highest” cash backs and rewards that would credited to the user’s account in the form of Ola Money. Users would be able to redeem them for riding with Ola, booking flights and hotels, Ola said in a statement.
The credit card enables Ola to leverage “over 150 million digital-first,” Ola users to improve their payment experience even as “mobility spends form a significant wallet share for users,” said Ola co-founder and CEO, Bhavish Aggarwal.
Ola has been benefiting from insights of its user base to offer new services. In 2015, Ola had launched Ola Money wallet for users followed by Ola Credit in 2016 that was rebranded to Ola Money Postpaid last year. While so far these services served use case of paying for Ola rides but company’s recent plan to offer its own credit cards reiterates its intention to also become a financial services entity even as it had applied for a non-banking financial company (NBFC) license in January this year.
“Ola may be looking to to go beyond credit card into a suite of financial services in three-six months. Its current portfolio of financial services include wallet, post paid billing, micro-insurance for Ola rides, and now credit card. This may explain why why Ola has already already applied for the NBFC licence,” a source familiar with Ola’s plans told Financial Express Online.
Also read: Ola credit card: Uber rival is marrying digital payment with mobility in India
Ola had last year tied up with ICICI Bank as well to offer services such as small ticket instant digital credit to Ola customers while ICICI Bank customers could pay for their Ola rides through ICICI’s iMobile and Pockets app.
Those who don’t use credit cards and aren’t Ola customers would have to sign up on Ola app to apply for credit card. However, they may not get a large limit because they wouldn’t be having either Ola history or credit card history. So there underwriting would be an issue, the source said.
“Through this card, we aim to address their evolving mobility spends while providing them with maximum value and unique benefits on their travel spends, especially for cab-based commute,” said Hardayal Prasad, MD & CEO, SBI Card.
Ola would offer 5 per cent cash back on Ola cab spends, 5 per cent on flight bookings, 20 per cent on domestic flight bookings, among other offerings.
Paytm, for its credit card, has partnered with Citi Bank where Paytm will identify the potential base of customers using a ‘selection tool’ developed by both the parties to gauge the creditworthiness of the user for underwriting since credit history for many users might not be available.
India’s total transaction value in the digital payments segment stood at $64,775 million in 2019 and is expected to grow at 20.2 per cent CAGR to $135,312 million by 2023, according to Statista.