CRED | Not everyone gets it

Picture this : you're waiting in line to enter a new club in the city that you got an exclusive invite to from a close friend you've known for years. You trust this friend with pretty much everything.

The line's moving pretty fast, people are either making it in or waiting to be let in.

The bouncers are dressed in black t-shirts with bold letters "CRIF" & "EXPERIAN"

You're wondering what it is, while they call you to step ahead & share your phone number to ID you.

Five seconds later : they say congratulations, you've made it. Your credit score is a solid 750+.

Welcome to the most rewarding payment experience there is.

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Still wondering what it is?

CRED is a fintech company that was officially launched by Kunal Shah, former founder of freecharge, in the year 2018.

The initial product was built to provide users a platform to manage and pay off credit card bills and get rewarded for timely payments - AKA good financial behaviour

The marketed themselves to be a members-only app curated for the trustworthy & credit-worthy individuals of the country to make financial progress and get rewarded for good financial behaviour.

How does CRED define trustworthy & credit-worthy?

a credit score is a statistical representation of one’s creditworthiness.

CRIF, EXPERIAN, EQUIFAX are used to ensure you've practiced good financial behaviour in the past.

An individuals credit score ranges between 300-900, with 300 being the least & 900 being the most. While you can't achieve the 900 score anymore, 850 is the maximum you can get (it's like trying to get 100/100 in a language subject, they'll never give it to you)

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A good credit score ranges between 670-739 & anything above that is really good.

Hence, only individuals with a really good credit score AKA 750+ get access to the club.

Today CRED has a suite of products - almost like a super app for all your payment needs & a little more:

• CRED money
• CRED mint
• CRED Garage
• CRED escapes
• CRED store
  
• CRED pay
• Scan & pay
• Tap & pay
• Pay anyone
• RuPay cards on UPI

Understand your Product

(Before you begin, you need to know what your product is, what are its features, what is the problem being solved by your product?)

CRED PAY

A collective of UPI payments & credit card payments across your friends, family, online orders & a lot more

Problems & solutions

• Seamless merchant integration : most apps face friction while integrating with payment methods. CRED pay does that very smoothly for large merchants online & offline with extensive tech but also for d2c brands onboarded via shopify, gokwik, shopflo etc.
• CRED pay offers rewards & incentives to the exclusive club members
• Unified payment experience with all UPI, credit card & CC on UPI transactions being done from one place.

Let’s talk UPI

According to NPCI (National Payments Corporation of India) there’s been a run rate of 14.4Mn transactions in the month of July’24. The transaction volume increased by a whopping 44.87% from July 2023 (9,964.61 million) to July 2024 (14,435.55 million)

From when they started in 2016 having 0.09M to just a Lakh in transactions M-O-M to 14.4Mn transactions M-O-M in 2024

Given the rapid digital adoption and innovation in payment systems, the growth could be substantial

Market leaders

• The major players in the UPI market today with txn volumes are :

1. Phonepe - 6983.97 Mn txns
2. Google pay - 5341.23 Mn txns
3. PayTm - 1128.97 Mn txns
4. CRED - 142.56 Mn txns

CRED holds a 1% market share - think it’s relevant with top 1% branding? Not really, I hope not.

• If we go deeper and split this into P2P (Peer to peer) transactions & P2M (peer to merchant) transactions source : NPCI

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P2M transactions are 1.7x higher which is almost the double of P2P transactions which suggests that a large portion of UPI usage is dedicated to retail and commercial payments. This reflects

• Digital Adoption in Commerce: The widespread use of UPI for everyday purchases, from small shops to large retailers, means many consumers are comfortable using digital payments for transactions of all sizes.
• Shift Toward Cashless Transactions: The higher P2M ratio could indicate more reliance on UPI for daily expenditures, even for low-value transactions.
• Merchant Integration: With many small and large merchants now accepting UPI, consumers have more opportunities to use it, boosting P2M transactions.

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TAM calculation assumptions

Broad view

1. UPI Unique Users: 350 million (approximately).
2. Credit Card Users: 40-50 million (4-5 crore) users.
3. Total Credit Cards in Circulation: 101.8 million (10.18 crore), indicating that many users hold multiple cards.

Venn Diagram Explanation:

• Circle A (UPI Users): Represents the 350 million UPI users.
• Circle B (Credit Card Users): Represents the 40-50 million credit card users.
• Overlap: This area would represent the users who are both active UPI users and have credit cards (likely the most relevant target market for CRED).

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TAM calculations

Gated in users - 32Mn out of the 40-50Mn credit card users
total users with single card / multiple cards - 17Mn

TAM - 40Mn users
SAM - 32Mn users
SOM - 25Mn users (current run rate at 17Mn users)

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ICPs - Ideal customer profile

Basis user calling exercise + one HNWI assumption : Let’s evaluate some potential ICPs & give them some personality to feel like they’re real humans 👽

Take a look at their relationship with money 🤑

Take a look at their relationship with CRED

Keeping the 5 core principles to choose our ICPs

We’ll be picking Shashank & Sachin as our ICPs - who fall under High value credit card users & financial savvy millennials & since they use their credit cards, they’re also most likely to have adopted to using UPI as well.

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Marketing pitch

https://www.instagram.com/reel/C5GBfOxA2sU/?igsh=OG9qeXlmeHQ1ZXhl

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Core value prop :

upgrade to CRED UPI & get cashback to kill your credit card bills. Every payment is rewarding​

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JTBD framework to understand users motivations

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Pain points with current flow

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Let’s talk about what has worked so far

Referrals

• Referrals via POP challenge that solves for engagement and brings your friends to CRED Referee & referred user gets a cashback on their first payment made on the appreferred users are at an average of : 55-60K referral discovery to invite (in a 30 day timespan) : is about 20-25% referral invite to sign up : 15% - 20% referral sign up to payer : 20-25% referee : 90% users claim the cashback after referring & unlocking their cashback within 7 days referred : 50% users claim the cashback after referring & unlocking their cashback within 7 days CAC : trending at Rs.350
• • Some numbers month on month data
• • Referral streaks : more number of people referred = unlock cashbacks by unlocking levels

pain points

• solve for discovery & visibility of referrals.
  Most power users said they’ve only referred users through word of mouth because they don’t know where referral is today on the app.
  Users assume others are using the app, since brand value exists.
  Add touch points & notifications when they pay their credit card bill as well (during the AHA moment) to make this better for power users.

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What are some key levers that can be used to grow here :

1. Product integration : Let’s look at some key places users are making P2M transactions

Dividing this into 2 large categories

• High transacting categories1. Food and Dining:These buckets simplify the list while maintaining clear distinctions between spending areas.
• • Fast food restaurants & deliver
  • Eating places and restaurants
  • Bakeries
• 2. Retail and Consumer Goods:
• • Department stores
  • Drug stores and pharmacies
  • Digital goods: Games
• 3. Telecommunication and Utilities:
• • Telecommunication services (local and long distance calls, credit card calls)
  • Utilities (electric, gas, water, and sanitary)
• 4. Fuel and Transportation:
• • Service stations (with or without ancillary services)
• Medium transacting categories
• 1. Beverages and Grocery Shops:
  2. • Dairies
     • Drinking places (bars, taverns, nightclubs, cocktail lounges)
     • Candy, nut, and confectionery shops
     • Package shops (beer, wine, and liquor)
     • Cigar shops and stands
  3. Financial and Brokerage Services:
  4. • Debt collection agencies
     • Securities brokers and dealers
  5. Niche Markets and Repair Services:
  6. • Online marketplaces
     • Electronics repair shops
     • Freezer and locker meat provisioners

With CRED UPI / CRED pay via credit card being present on almost all high transacting categories introducing the split feature here would increase users adoption of the p2p/ scan and pay feature on CRED. Imagine this : for a particular large bulk order on Swiggy/ dining order and pays for the entire order. Your friend is a CRED user that used CRED to pay for this order The offer call-out on merchant funnel’s checkout : “split the bill with your friends & earn upto cashback. use it to reduce your credit card bill”

once the payment is completed show a split option using contact’s allow CRED user to send these folks a request for Rs.x & a notification to the friend’s device PN - if existing user Whatsapp comm - if new user, zombie that’s uninstalled the app

After the meal, the friends use CRED’s UPI feature to transfer the share of each friend’s portion to the person who paid & all users earn cashback while doing the same.

These user then use their cashback the next time they pay off their cc bill - bringing them back to the core product loop.

Cashbacks can be determined by user type definition : New to CRED user : higher cashback New to CRED pay : medium cashback Existing active user : low cashback Zombie user : higher cashback

Also acts as referral loop for new users.
Let the acquiring begin /

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​we hope this helped you break the cold start problem!

Reminder: This is not the only format to follow, feel free to edit it as you wish!

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