CRED Business Model: How Does CRED Generate Revenue?

Founded in 2018 by Kunal Shah, who was previously the CEO of FreeCharge, CRED has quickly become a top fintech company in India due to its unique methods of managing credit. The mobile app can be found on both iOS and Android devices, offering incentives to users who demonstrate good credit behaviors. CRED allows cardholders to manage and use their credit card accounts, helping them earn reward points depending on how they use their credit.

Having a membership provides users with access to different additional services, including alerts for credit card payments, automated payment choices, and appealing rewards for timely payment of credit card bills. Included in these advantages are cashback, reductions, and exclusive deals from well-known brands in different categories like travel, food, and entertainment.

CRED business model has garnered over 15 million users as of 2023. 

The business has secured more than 220 million USD in funding from leading investors like Sequoia Capital, Ribbit Capital, and DST Global and is currently valued at more than 2 billion USD. Its unique business model, user-centric approach, and focus on simplifying user credit management are credited for its success.

Who is the CRED Target Customers?

CRED's focus is on attracting a large portion of affluent, wealthy, and reputable customers who have and use credit cards. This leads to a safe environment of faithful and dependable people, paving the way for them to contribute and grow towards a multitude of opportunities down the line.

The company is focusing on customers with a high credit score, specifically those above 750. If individuals with a poor credit score must wait and receive advice on how to enhance their credit rating.

The Idea Behind CRED Business Model

Kunal Shah's brainchild, CRED, was introduced in April 2018 to tap into a niche market of trustworthy individuals who would receive incentives for their prudent financial actions.

The concept of CRED is to develop a controlled community of trustworthy, reliable individuals and establish methods for them to connect and network with each other in the future. It is a system based on credit that offers a secure environment for both individual lenders and financial institutions to lend money to reliable individuals.

Credit scores are utilized as a criterion to screen the population based on individual creditworthiness. To keep customers coming back, the platform gives them CRED coins as a reward for making payments on time.

How does CRED make money?

CRED generates revenue through various main methods.

Listing fees 

The initial fee is charged to partner brands who list their products and services within the app. The fee for listing products is similar to the fee charged by eCommerce platforms like Amazon for displaying products from merchants.


Every time a user exchanges their points for that deal, CRED also gets a commission from the relevant business. The company also receives a small fee for each loan it helps to facilitate through the Cred Stash.

Additionally, as a component of the CRED RentPay feature, the organization gathers approximately 1 to 1.5% of the complete transaction sum.

User data

CRED gathers a lot of data from its users while they make payments and engage with the platform. Afterward, the company sells this data to financial institutions which utilize it to develop improved credit card and loan offerings.


Q. Is CRED making profit?

A. Fintech platform Cred's total income for fiscal 2023 ended March 31 rose three-and-a-half times to Rs 1,484 crore from Rs 422 crore the previous year. In FY2021, the company had posted a total income of Rs 95 crore. Its loss widened to Rs 1,347 crore from Rs 1,279 crore in FY22

Q. Why is CRED successful?

A. CRED realized that a loyalty program alone wasn't enough. To stand out in the competitive market, they had to offer more. They pivoted by introducing features like bill tracking, automated payment options, and reward points for bill payments. These changes transformed their user base.

Q. How does CRED technology work?

A. It is a platform that allows credit card users to manage multiple cards along with an analysis of their credit score. Members with a high Experian or CRIF score are eligible for exclusive rewards upon payment of their credit card bills through the app.

Q. Is CRED approved by RBI?

A. Fintech firm Cred has obtained the Reserve Bank of India's in-principle approval to operate as a payment aggregator (PA), as per a source familiar with the matter. Being a PA enables companies to facilitate and transfer customers' funds to merchants.

Also Read: Paytm in Discussions to Sell Movie Ticketing Business to Zomato

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