Ola credit card: Uber rival is marrying digital payment with mobility in India

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Published: May 13, 2019 7:41:02 PM

Leveraging the underserved credit-led payments scenario in India serves Ola's intent to offer a wide array of services to its large base of 150 million consumers who use its cabs for their commuting needs, right from bikes to luxury cars.

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.

The richer the engagement a company has with its customers for its products or services, the greater is the possibility for the company to offer newer experiences. This holds true in use cases such as social networking platforms or digital entertainment or over-the-top platforms or even e-commerce websites where customers may not buy every time they visit them but simply surf.

Natural Diversification

Then comes the transportation apps like Ola and Uber that ferries thousands of customers daily. Mobility expense, since it occupies a large of a customer’s wallet, provides great intelligence into a user’s commuting habit to cab hailing platforms to offer new services.

Ola, for instance, has been experimenting with insights it has from its active base of 150 million customers to build its strength on the payment side, given the size and scope of cashless payments in India.

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 reportedly applied for a non-banking financial company (NBFC) license in January this year.

“Platforms like Ola, which are used at least twice a day and since a large part of a user’s wallet share is spent on mobility, there is a lot of rich data mining that Ola would be doing based on consumers’ preferences to serve them better. For instance, if you continue booking Ola Prime then Ola shows you Prime by default when you launch the app. So intelligence like these offers an opportunity to create new services,” an industry expert told Financial Express Online requesting anonymity.

Ola didn’t comment to the query emailed regarding credit cards.

“Ola is betting big on financial services through the credit card based payment as next frontier of digital payments. Credit cards introduction after Postpaid is in that light. However, it might be a by-invite service for initial few months,” two sources aware of the development confirmed to Financial Express Online.

Credit Underpenetration

Payments opportunity is an important area for Ola to tap on to drive cashless payments through its 150 million users even as there is a lack of penetration of credit cards in India vis-a-vis debit cards. India had only 47 million credit cards against 924 million debit cards at March 2019 end, as per the Reserve Bank of India data.

Ola is looking to issue 1 million cards in 1st year with better rewards than regular credit cards, said one source. The credit card will also have an app to allow seamless onboarding of customers and apply for it within minutes along with “real-time management and control of spendings”, the source said.

Leveraging the underserved credit-led payments scenario in India serves Ola’s intent to offer a wide array of services to its large base of consumers who use its cabs for their commuting needs, right from bikes to luxury cars.

The differentiation between a regular credit card and an Ola credit card, which will be launched in partnership with various banks, will be in rewards as it would be at least “10x better and would have a very generous” rewards programme, another source said, adding that points accumulated could be used not just for Ola rides, but also flight bookings, hotel bookings etc.

However, Ola hasn’t worked upon giving credit cards to commuters who don’t use Ola services. Moreover, the number of banks Ola would be working with and the card limit couldn’t be ascertained as “it is too early to talk about,” another person in the know of the service told Financial Express Online.

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