Kunal Shah’s Cred: Redefining Credit Card Payments and Trust in India

In the realm of fintech, Kunal Shah, the founder of Cred, has set out to build more than just a credit card payments app; he’s cultivating a community cantered around financial responsibility and trust. Over the past year, Cred has emerged as a unique platform, focusing on a niche segment often overlooked—individuals who diligently pay taxes.

Cred’s app streamlines credit card payments for its members, allowing them to link all their credit cards and receive timely payment reminders. More than just a payment facilitator, Cred simplifies credit card charges, unveiling hidden fees that might otherwise go unnoticed. The emphasis is on empowering members with visibility into their credit cards, helping them navigate the complexities and avoid falling into a debt trap. Founder Kunal Shah explains, “We want to focus on the others, the ones who pay taxes. Nobody has been solving their problems.” Cred’s commitment to this segment extends beyond payment facilitation.

Cred goes beyond conventional offerings by incentivizing responsible financial behaviour. Members receive rewards such as vouchers for popular retail outlets, including Levi’s and Gap, along with offers on platforms like Zomato and Cult. The unique aspect lies in the accumulation of Cred coins for every rupee paid towards credit card payments. These coins can then be redeemed for various vouchers. Kunal Shah notes, “If you look at history, nobody has been rewarded for paying back on time. We want to fix that.” The platform’s approach aims to instill a sense of recognition and benefit for members who demonstrate financial responsibility.

Since its inception in November 2018, Cred has garnered a million users, with significant interest from individuals seeking membership. However, the conversion rate stands at 30 to 40 percent, primarily due to the stringent membership criteria. To become a Cred member, individuals need a credit score of 750 or above, emphasizing the platform’s commitment to building a community of trustworthy individuals with exemplary financial behaviour. Kunal Shah highlights the importance of a high credit score, stating, “We are trying to build a community of trustworthy individuals with the best financial behaviour, and shaping a society that is credit-worthy.”

For Kunal Shah, Cred is not just about credit card payments; it’s a platform with the potential to reshape financial interactions and trust in society. Looking ahead, Shah envisions offering personal loans at competitive interest rates, leveraging the platform’s community of high-credit-score individuals. This expansion could involve collaborations with financial institutions or even explore peer-to-peer lending.

The trust factor inherent in Cred’s community opens avenues for peer-to-peer lending, classified services, and collaborative initiatives. Shah emphasizes the belief that economic prosperity is higher in societies with elevated levels of trust, citing Nobel laureate economist Kenneth Arrow’s theory.

Cred’s business model revolves around providing a high-trust member base for brands and companies. Brands can offer exclusive benefits to Cred members, while institutions can design unique products for a low-risk and authentic audience. This symbiotic relationship positions Cred to monetize through transaction fees from companies and brands using its platform. Within a year, Cred has achieved a valuation of $450 million after a $120 million funding round. The platform’s growth and valuation indicate its potential to serve as a high-trust community for exclusive offerings and financial products.

Looking beyond India, Cred is evaluating opportunities in global markets, exploring regions where low-trust markets and individuals holding multiple credit cards present an opportunity. Shah envisions expanding the platform’s offerings, including masterclasses, VIP event inclusions, and contributions to social causes using accumulated Cred coins. As Cred aims to acquire half of India’s credit card users in the coming year, its growth trajectory reflects a commitment to redefining financial interactions, fostering trust, and rewarding responsible financial behaviour.