Cred Receives In-Principle Approval from RBI to Become Payment Aggregator

Preeti Bali / 2:11 pm / April 22, 2024

Cred, a leading financial technology company headquartered in Bengaluru, has received preliminary approval from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA). This move signifies Cred’s expansion into facilitating and managing customer payments to merchants. While not the final authorization, the in-principle approval allows Cred to continue operations until a formal license is granted within the next year.

Cred: A Leading Player in Credit Card Management and Beyond

Cred has established itself as the dominant third-party application for credit card bill payments in India. Beyond its core service, Cred offers a diverse range of products and services, including a curated e-commerce platform, vehicle management solutions, and a platform for travel packages.

Growth and Expansion: Cred Makes Strategic Acquisitions

Led by entrepreneur Kunal Shah, Cred boasts over 15 million active users and a significant presence in the Unified Payments Interface (UPI) space. As the fourth-largest UPI player, Cred holds a 2.3% volume market share in India’s digital payments landscape. Cred’s recent acquisition of Kuvera, a wealth management platform with over 300,000 affluent customers, further underscores its commitment to growth and diversification. Kuvera provides a variety of investment options, including mutual funds, fixed deposits, systematic investment plans (SIPs), international equities through a partnership with Vested Inc., pension funds, and digital gold.

Cred Reports Strong Revenue Growth

Cred’s financial performance reflects its success. The company reported a substantial revenue increase of 256% in FY23, reaching Rs 1,400 crore compared to Rs 393 crore in FY22. However, losses experienced a marginal increase of 5% to Rs 1,347 crore in FY23, compared to Rs 1,280 crore in the previous year. This can be attributed to Cred’s significant reduction in customer acquisition costs by around 80% over the past four years.

RBI Approves Multiple Payment Gateways as PAs

Cred’s in-principle approval comes amidst a broader trend of the RBI granting final approval to several payment gateway companies like Razorpay, CC Avenue, Cashfree, Zoho, Tata Pay, and EnKash to operate as PAs. This move signifies the Indian regulatory body’s efforts to streamline and regulate the digital payments ecosystem.

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