The credit card industry has achieved an unprecedented 50% growth in the last 3 years, thanks to the utilisation of co-branded cards. Large traditional banks and fintech businesses are aiming to cultivate stronger brand loyalty, increase brand visibility, and drive revenue growth by deploying more credit cards in the market. In addition to this, credit card issuers want access to a captive audience that the businesses have, in order to cross-sell other banking products.

Earlier, launching a credit card program took banks & businesses several quarters or sometimes even years. But, today, we live in a simpler, faster, super-modular world. Fintechs have changed the financial services landscape beyond recognition. With the rise of open banking, the credit-card stack is available for businesses and banks in an easy-to-integrate, plug-and-play fashion. In this article, we take a closer look at credit card-as-a-service.

What is Credit-card-as-a-Service?

Credit cards in India can be issued solely by Regulated Entities, which in most cases are Scheduled Commercial Banks (SCB) and rarely Regional Rural Banks through their sponsor SCBs or NBFCs with explicit approval from the regulator. Credit-card-as-a-service can be of the following types:

As Technology Service Provider (TSP) to Banks: To bolster the regulated entities’ tech capabilities for card issuance and management, the banks tend to outsource such services to technology service providers specialising in products like credit cards.

Co-Branding Integration: Partner Businesses can issue personalised co-branded cards to their customers by integrating with a Credit-card-as-a-service provider, which in turn does all the requisite plumbing with the issuing entity and the card networks. The role of the co-branding business partner in this transaction will be limited to that of a marketer/distributor.

Inside the Machine.

A credit-card-as-a-service provider takes care of the following modules, depending upon whether the card being issued is a secured or an unsecured one so that you can focus on your topline and bottomline.

Application Processing & Onboarding: The process of enrolling and setting up a new customer account with the credit card issuer.

Card Personalisation and Issuance: Customising and producing physical credit cards with personalised details for approved applicants.

Card Activation: Enabling the functionality of a newly issued credit card for the cardholder to start using it.

Card Replacement / Hot-listing / Renewal: Handling requests for replacing lost, stolen, or damaged credit cards, blocking cards reported as lost or stolen and renewal of expired cards.

Card Management: Overseeing the ongoing administration and maintenance of credit card accounts, including credit limits, usage monitoring, and account updates.

Card Plastic Specifications Compliance: Ensuring that the physical credit cards meet industry standards and compliance requirements.

Authorisation Processing: Verifying and approving transactions made using the credit card by checking available credit and account status.

Open to Buy: The remaining credit limit available for the cardholder to use after accounting for existing charges and pending transactions.

EMI: Enabling cardholders to convert large purchases into equal monthly instalments for easier repayment.

Billing Module: Generating and managing credit card statements with detailed transaction information and payment due dates.

Fee Management: Administering and collecting various fees associated with credit cards usage, such as annual fees or late payment fees.

Rewards Program: Implementing and managing a program that offers cardholders rewards or benefits based on their credit card spending.

Operations: The overall management and coordination of the credit card service, including settlement & recon, customer support, fraud prevention, and compliance.

Notifications & Alerts: Sending timely notifications and alerts to cardholders regarding transaction updates, payment reminders, and security alerts.

Delinquency Module: Managing and addressing instances of late or missed credit card payments by cardholders.

Data Management: Safeguarding and managing the collection, storage, and processing of cardholder data in compliance with data protection regulations.

How do the stakeholders interact?

Given below is a sample stakeholder diagram that illustrates how the different parties interact in the issuance & management of a secured credit card by a corporate / business.

CARD91 is building credit-card rails to help Indian businesses and banks launch their credit card programs at industry-best speeds. Reach out to us –

If you are a Bank, looking for a credit card issuance & management solution.
If you are a Business, planning to launch a co-branded credit card.
If you are a Corporate, planning to launch a corporate credit card program for employees.

Authored by Praveen Varghese, Product Manager, CARD91

India has experienced a remarkable evolution in its digital payment landscape in recent years. The swift proliferation of smartphones, internet connectivity, and government initiatives such as Digital India, Unified Payments Interface (UPI) NEFT/IMPS, Prepaid Cards/Wallets/Contactless Payments, e-RUPI, CBDC, AEPS, Open Banking/API Integration has significantly contributed to the expansion of digital payment methods throughout the nation. A strong tailwind to digital/contactless payments was provided by demonetisation and Covid-19, leading the way for a cashless economy and better tax compliance. This blog explores the latest digital payment trends reshaping India’s financial landscape.

Unified Payments Interface (UPI) Dominance

The Unified Payments Interface (UPI) has been a game-changer in the Indian payments industry. Launched in 2016 by the National Payments Corporation of India (NPCI), UPI enables users to link multiple bank accounts and execute real-time peer-to-peer transactions. UPI has witnessed exponential growth, with transaction volumes crossing the billion-mark monthly. Its success can be attributed to its simplicity, security, and interoperability across various payment apps.

IMPS/NEFT

IMPS and NEFT have revolutionised the way funds are transferred in India, providing individuals and businesses with fast, secure, and convenient payment options. Whether you need to send money urgently or make routine payments, these electronic funds transfer systems offer unparalleled accessibility and flexibility.

Prepaid Cards, wallets and Contactless Payments

Digital wallets and Prepaid cards have gained significant traction in India, allowing users to store funds digitally and make quick payments. The COVID-19 pandemic further accelerated the need for contactless transactions and contactless payments. NFC-enabled cards, QR code payments, and mobile payment solutions are increasingly prevalent, allowing consumers to make secure transactions without physical contact. Today, merchants are offering contactless payment options to provide their customers with a safer and more efficient checkout experience.

New Government Initiatives:

The Government of India has played a pivotal role in promoting digital payments through its flagship initiatives, such as Digital India, e-RUPI, CBDC and many more. Digital India aims to transform India into a digitally empowered society by promoting digital literacy and providing digital infrastructure.

o e-RUPI is a wholly cashless and no-contact electronic payment instrument that will be delivered to beneficiaries’ mobile devices (even mobile devices that are non-android or iOS) as either a QR code or an SMS-based e-voucher.

o CBDC is a digital currency issued by a central bank, rather than a commercial bank. Backed by blockchain technology, this central bank digital currency (CBDC) is an electronic version of the physical rupee, potentially representing a more secure and government-supported alternative to private digital currencies

AePS

India has witnessed rapid growth in biometric authentication for digital payments. The Aadhaar-enabled Payment System (AEPS) allows individuals to link their bank accounts with their unique Aadhaar identification number and make transactions using biometric verification. This technology has simplified payments for the underbanked population, making financial services more accessible and inclusive.

Integration of Artificial Intelligence (AI) and Machine Learning (ML)

Artificial Intelligence (AI) and Machine Learning (ML) are revolutionising the digital payments landscape in India. With AI-powered chatbots, payment service providers are enhancing customer support to address queries effectively. ML algorithms are leveraged to detect and prevent fraudulent activities, ensuring secure transactions. Moreover, personalised recommendations and targeted offers based on user behaviour are being utilised to drive customer engagement and loyalty.

Open Banking, driven by the Reserve Bank of India (RBI) guidelines, is a game-changer in the banking sector, allowing secure sharing of customer data between banks and fintech companies. Application Programming Interfaces (APIs) facilitate the seamless integration of various financial services, allowing customers to access multiple banking services through a single platform. This collaborative ecosystem encourages innovation and empowers customers with a variety of payment options.

As India moves towards a cashless economy, these trends will continue to shape the future of digital payments, driving financial inclusion and economic growth.

CARD91 is an API-led issuance Platform-as-a-Service company. It offers unparalleled technology infrastructure to banks, SMEs, corporates & fintech through its Switch and Card Management Solutions for Prepaid Cards, Multi-Currency Travel Cards and allied systems like Centralised System of Records (C-SOR) for prepaid cards, credit cards and Access Control systems (ACS)

Introduction:

Prepaid cards have experienced a remarkable transformation over the past few decades, emerging as a powerful tool in the financial landscape. Originally introduced as a convenient means for gifting and travel, these cards have evolved with advancements in technology to meet the changing consumer needs.

Prepaid Cards in India:

In India, prepaid cards have had a significant rise in popularity due to their numerous benefits. Initially embraced as a safe and convenient alternative to carrying cash, these cards quickly became prevalent in various sectors, from retail and transportation to online shopping. Their proliferation was further accelerated by the expansion of the country’s digital infrastructure.

One pivotal moment in the evolution of prepaid cards in India was the advent of e-commerce and the widespread adoption of mobile wallets. Leading banks and fintech companies integrated prepaid cards into their mobile applications, enabling users to make quick and secure digital transactions. This integration propelled prepaid cards into the forefront of India’s burgeoning digital payment ecosystem.

The Indian government also played a crucial role in promoting prepaid cards to drive financial inclusion. Millions of unbanked and underbanked individuals gained access to digital financial services by advocating for their adoption in government schemes and benefits disbursement. Prepaid cards became a gateway to the formal banking system, empowering individuals previously excluded from traditional financial services.

Prepaid Cards on the Global Stage:

The transformation of prepaid cards is not limited to India alone; it has reverberated globally. Prepaid cards have become an integral part of the financial landscape in many countries, catering to a diverse range of consumer needs. They have emerged as an alternative to traditional bank accounts for the unbanked and underbanked population, providing access to vital financial services.

The rapid growth of e-commerce and the increasing demand for seamless digital transactions have fueled the global adoption of prepaid cards. Payment processors and fintech companies have collaborated to issue virtual prepaid cards, making online shopping more accessible and secure for consumers worldwide. These cards have played a pivotal role in bridging the gap between individuals and the digital economy.

Another significant application of prepaid cards globally is in the travel industry. Prepaid travel cards have become the preferred choice for international travellers, offering favourable exchange rates and enhanced security. They provide a practical alternative to carrying foreign currency, enabling travellers to make hassle-free transactions.

Expanding Functionality and Rewards:

Today, prepaid cards have expanded their functionalities beyond basic transactions to address evolving consumer preferences. Many prepaid cards now incorporate rewards programs, cashback offers, and other loyalty benefits. These additional features aim to attract and retain users, fostering a sense of value and engagement.

Conclusion:

The evolution of prepaid cards in India and globally has been transformative, empowering financial inclusion and enabling seamless digital transactions.

As prepaid cards continue to adapt to changing consumer preferences and technological advancements, they are poised to play an increasingly significant role in shaping the future of the financial landscape. With their convenience, security, and versatile functionalities, prepaid cards will continue empowering individuals and businesses alike, fostering financial inclusion and contributing to the growth of the digital economy.

Card91 presents a diverse collection of prepaid cards, catering to both domestic and international transactions, accompanied by a convenient switch system. Our integrated solutions empower businesses and authorised dealers with effortless operations, facilitating a wide range of applications. To gain a deeper understanding of our innovative solution, please contact us at sales@card91.io. Our team will be delighted to assist you and explore how our offerings can cater to your specific requirements.

Let’s unlock new possibilities together!

-Written By Khushboo Bakhru, Partnership & Sales

In recent years, the world has witnessed a remarkable surge in the adoption of cashless payment methods. Cashless payment refers to any transaction that does not involve physical cash and utilises electronic methods to transfer funds. This can include various forms such as credit or debit cards, mobile wallets, and digital payment platforms.

The rising trend of cashless payments has brought numerous advantages to both individuals and businesses alike. Some key benefits include:

1. Convenience: Cashless payments offer unparalleled convenience, as users can make transactions anytime, anywhere, without the need to carry physical currency. With just a few taps on a smartphone or a simple swipe of a card, transactions can be completed swiftly and effortlessly.

2. Efficiency and speed: Electronic payment methods have made it possible to transfer funds instantly, allowing individuals and businesses to save valuable time. Moreover, digital wallets and payment apps allow users to store multiple payment methods in one place, simplifying the process even further.

3. Enhanced Financial Management: Cashless transactions provide users with detailed digital records, making tracking expenses and managing personal finances easier.

4. Focus on security. Cashless transactions eliminate the concern of carrying physical currency. Encryption technology and secure authentication methods used in digital payments have significantly reduced the chances of fraudulent activities.

However, like any technological advancement, there is a flip side to cashless payments too. There are cybercrimes where even intelligent people are duped by criminals. There are various techniques, such as phishing, malware attacks, and identity theft, to gain unauthorised access to personal and financial information. To mitigate these risks, individuals must be vigilant and proactive in safeguarding their digital transactions.

The rise of cashless payments indicates a transformative future for the financial industry. As technology continues to advance, CARD91 is at the forefront, leveraging the expertise, API integrations and offering additional payment options to provide innovative solutions for businesses, consumers, and partners alike. Not only this but as cybercrimes become more prevalent, CARD91 prioritises implementing robust security measures to safeguard sensitive data and protect against unauthorised access. It encompasses several key elements like encryption, fraud detection and compliance with security standards. As the financial industry continues to evolve, CARD91 remains dedicated to staying ahead of emerging security threats and delivering secure and reliable transaction solutions for the digital age.

-Ayushi Jain
(Manager- Partnerships & Sales)

Today, banks issue various prepaid instruments like prepaid cards, digital wallets, gift cards, fastags, etc. that are mandated to comply with certain regulations, as prescribed by the regulator in its master directions. At the same time, regulated entities carry out remittances, issue forex, international debit and international credit cards governed by tax laws. Any issuer providing multiple types of instruments, or partnering with multiple technology service providers is expected to follow these regulations and laws. The prepaid instrument regulations are meant to monitor/manage the level of prepaid instrument loading and usage at an individual customer level. The tax laws focus on collecting tax at source (TCS). These compliances demand a centralised repository that takes care of the following:

Uniquely identifying the customer and rolling up based on personally identifiable information (PII) sought from the customer at the time of onboarding.

Classifying customers based on their risk-profile categorisation.

Maintaining personalised limits at the customer level.

Controlling loading and usage at the issuer level.

Intimating the Bank / Regulated Entity on TCS applicability and rates.

This is precisely what the Centralised System of Records or C-SOR offers. A centralised System of Records (C-SOR) is a centrally managed repository that maintains customer-level records for a range of instruments issued by technology service providers (TSP) on behalf of the issuer. All customer actions undertaken by the TSP are sent to C-SOR for verification and validation. This means that only C-SOR-validated customer actions are treated as valid. Given below are a few scenarios that illustrate how the Centralised System of Records could be used by issuers in the context of various businesses they undertake.

Prepaid Cards: Bank and Non-bank PPI issuers issue prepaid cards through multiple TSPs. To maintain the balances and daily/monthly/yearly transactions allowed across transaction types and KYC types, be it full KYC or small PPI, the issuing entity should be employing a centralised system of records. For instance, a customer who was onboarded via both TSP1 and TSP2 will be identified as a single customer in the C-SOR system and the usage data should be managed accordingly.

Payments Bank: Payments Bank Savings Account balances plus balances contained in PPI or other internal wallets should not cross 2 Lakh INR at EOD. The differential should be swept into its partner Scheduled Commercial Bank’s deposit account. CSOR makes sure that the aggregate balance across applicable instruments doesn’t cross the prescribed limit.

LRS Limit Maintenance: Limits under the Liberalised Remittance Scheme (250,000 USD in a fiscal year) can be maintained by the C-SOR based on usage across instruments like Credit Cards, Debit Cards, Remittance Accounts and Forex Cards. The issuer can also be notified about usage that affects the TCS charged at a customer level.

CARD91 has built a robust centralised system of records as an API-led solution which lets issuers monitor its registered customers on a real-time basis. For more information, please reach out to sales@card91.io.

Written by Praveen Varghese, Product Manager, CARD91.

Tips for using Forex cards effectively for your overseas trip

Forex card is a type of prepaid card that can be loaded with foreign currency for use while travelling abroad. It is also known as travel cards as they are invaluable companions that help in simplifying and lightening your travel experiences. It is widely accepted and is one of the most cost-efficient and safe ways to pay for your expenses abroad.

Benefits of Forex cards:

A Forex card is one of the cost-effective ways of carrying and paying in foreign currency. It has replaced cash and travellers’ cheques to a major extent. The reasons are not far to gauge:

1. It’s cheaper and negates exchange rate risk. Most card issuers offer lesser spreads and at the same time, you can lock in the exchange rate when loading the card protecting you from foreign currency fluctuations during the travel.
2. It’s safer than other cards because it is a prepaid instrument and does not expose your savings bank account through a debit card or your credit limits through a Credit card.
3. Forex cards offer convenience, owing to wider acceptability, though not as much as debit and credit cards.
4. Most of the Forex cards also provide zero or lower transaction fees. Moreover, forex cards can be used to withdraw cash from ATMs in the local currency, at a fee.

Tips for using Forex card abroad:

1. Check exchange rates: Keep a check on the exchange rates before loading the card to get a favourable rate. Most players are open to negotiating these rates.

2. Keep looking for deals: Some issuer or other has deals on Forex cards, especially during travel and back-to-school seasons.

3. Issue more than one card: It’s a good idea to issue more than one card, preferably two, for the same load. The second card can kick in if the first card is lost or compromised.

4. ATM usage: Use ATMs affiliated with your card to avoid extra fees.

5. Avoid public Wi-Fi: To protect your data, one should avoid using public Wi-Fi for making online transactions or checking balances.

6. Online transactions payment: To avoid cross–currency charges use Forex Cards to pay for online transactions in stores abroad.

7. Dynamic currency conversion (DCC): DCC helps to make in-store credit card purchases in a foreign country using the currency of your own country. While DCC makes it easier for an international transaction, it also comes with an additional expense as it will include a markup fee and foreign transaction fees. So the customer should decline the option of DCC while making any retail store transaction.

8. Pay across the world with a single currency: Some Forex cards let you transact seamlessly wherever you travel without cross-currency charges. Load it once (in USD) and use it to pay for your expenses anywhere in the world.

CARD91 provides a multi-currency travel card designed for banks, distributors and agents helping with inventory management, including tracking, organising and overseeing all the multi-currency-related processes, providing a seamless digital onboarding. We make cross-border remittances faster, smoother, and more reliable through our SDKs.

Written by Srishti Sachdeva, Manager of Sales, CARD91.

Over the past few years, India’s credit card sector has experienced remarkable growth, boasting nearly 98 million active cards and transaction volume reaching 323 Million in December 2023. Projections suggest that this figure could grow to 190 million cards by 2027, driven by a burgeoning affluent class. Despite this impressive growth, a crucial question looms – is the current credit card penetration rate of 3.5% or projected rate of 7% by 2027 enough? Can we extend the benefits of credit cards to the aspirational class and achieve a card penetration rate of 10% of the population ?

The Indian economy, on its upward trajectory, is expected to witness sustained growth, propelled by rising disposable incomes and an expanding middle class. RBI statistics reveal approximately 98 million active cards, with a monthly spend of INR 1,655 billion in December 2023. Key drivers of this growth include the increasing preference for cashless transactions, enticing rewards programs, the allure of a free credit period, and the synchronisation of repayments with salary receipts. Urban areas, in particular, are witnessing a shift towards credit card usage for transactions, thanks to the proliferation of e-commerce and mobile payments.

A recent report by Goldman Sachs titled “The Rise of Affluent India”, expects that 100 million Indians will be earning US$ 10,000 per annum by 2027. This set of people can easily take the number of cards to 200 million and a card penetration rate of 7% by 2027. And this is a great opportunity for Issuers to expand their customer base and increase usage. However, should we stop at 200 million? How about “The Aspiring Indians”? The rapid pace of digitalization has opened up the doors for Issuers to reach a larger customer base and offer innovative products and services. If done correctly, India can issue cards to 10% of the population by 2027.

Growth of Credit Cards from FY2017 to FY2023 with Estimates until FY27 :-

Source: RBI Data

However, the journey towards a higher penetration rate faces challenges. Key challenges include lack of distribution channels for credit card issuers to broaden their customer base and dissemination of information about the benefits of credit cards. A significant hurdle is the prevailing high rate of credit card delinquencies in India, reflecting a lack of awareness among consumers regarding the importance of timely payments and credit score management.

Addressing these challenges requires innovative solutions, such as the issuance of secured credit cards. This product empowers new-to-credit customers to build their credit history and scores by providing security in the form of Fixed Deposits or Gold, culminating in a credit card with a free credit period and generous rewards and offers. Smaller banks, in collaboration with fintech partners, are likely to spearhead this revolution, gaining assets and liabilities without straining their balance sheets.

Some of the strategies that issuers can use for increasing usage of secured credit cards are:

• A wider geographical and demographic reach: Go beyond urban areas by partnering with local banks, non-banking financial companies, and other organisations to offer credit cards to customers in rural areas.
• A sharper focus on Digital Channels: As more consumers in India become digitally savvy, credit card issuers need to focus on digital channels to reach potential customers. This includes using social media, mobile apps, and online advertising to promote secured credit cards and educate consumers about the benefits of using them. The journey of applying for a card, KYC, creation of FD, lien marking, and card issuance has to be seamless.
• Innovative Product offerings: Differentiation by way of tailor made products for different segments, co-branding, innovative rewards, etc.
• Awareness and consumer education: Increase awareness campaigns to help consumers understand the benefits of credit cards and how to use them responsibly. The key benefit to be propagated is that timely repayments can help create and / or to improve their credit scores.

Amidst technological innovations and a burgeoning economy, credit card issuers have a great opportunity in front of them. Through strategic initiatives and consumer-centric approaches, they can fortify profitability, catalyse digitalization, and provide consumers with a secure avenue for transactions—a pivotal step towards realising India’s digital future.

Authored by Amit B. Shah, Chief Business Officer at CARD91

In the fast-changing world of digital payments, a novel payment method – Credit Card on UPI (Unified Payments Interface) is making waves in India. This dynamic duo combines the flexibility of credit cards with the seamless efficiency of UPI.

How Credit Cards and UPI Work Together

Traditionally, credit cards have been all about convenience, allowing us to shop, pay bills, and manage finances effortlessly. On the other hand, UPI has been a game-changer in the world of digital payments. Initially designed for peer-to-peer transactions, UPI quickly expanded its horizons to accommodate merchant payments as well, leading to the integration of credit cards.

The Impact: Making Payments Accessible to All

One of the standout features of Credit Cards on UPI is their widespread accessibility. This integration bridges the gap between credit card users and those who primarily rely on UPI-based transactions. It caters to a diverse audience, ranging from urban professionals to individuals in remote areas, fostering financial inclusion.

How Credit Cards on UPI are Changing the Game:
1. Accessibility for Everyone: Credit cards on UPI break down traditional barriers to financial inclusion. With UPI’s widespread acceptance and availability across various platforms, users, regardless of their location or economic background, gain access to credit facilities seamlessly.
2. Convenient Integration: The integration of credit cards with UPI brings the power of credit transactions directly to the user’s fingertips. This eliminates the need for multiple apps or platforms, providing a unified and user-friendly experience for managing transactions from savings accounts, prepaid cards and now, credit cards.
3. Empowering Small Businesses: Small businesses, often underserved by traditional banking systems, benefit from the enhanced reach of credit cards on UPI. This innovation facilitates smoother transactions, empowering entrepreneurs to participate more actively in the digital economy.
4. Real-Time Transactions: The real-time nature of UPI transactions complements the instantaneous nature of credit card transactions. Users can enjoy quick and secure transactions, enhancing the overall efficiency of financial dealings.
5. Versatility Across Platforms: Credit cards on UPI seamlessly integrate with a variety of platforms, including e-commerce websites, mobile applications, and point-of-sale systems. This versatility enhances the reach of credit transactions, making it convenient for users to make purchases or payments wherever UPI is accepted.

Focus on User Experience
Beyond its extensive reach, the user experience remains at the core of Credit Cards on UPI. The seamless integration of credit card functionalities within the familiar UPI interface ensures that users can effortlessly navigate and leverage the combined benefits of these two payment systems.

In Summary
The integration of credit cards on UPI marks a significant milestone in the ongoing evolution of digital finance. The combination of credit card features with the extensive capabilities of UPI expands the reach of financial services to a wider audience, promoting both inclusivity and convenience.

Credit Cards on UPI embody a synergy of convenience and accessibility, enhancing the inclusiveness and user-friendliness of financial transactions. As this innovative solution gains momentum, it is reshaping our perceptions and interactions with digital payments, placing the capabilities of credit cards directly at the fingertips of users from diverse demographics.

The journey toward a cashless and interconnected future takes a substantial stride forward with the transformative collaboration of Credit Cards on UPI.

Authored by Astha Bishnoi, Manager – Partnership & Sales at CARD91

After reading Amit’s blogpost that projects a whopping doubling of the credit card customer base within the next 4 years, I could not help but wonder which is the major segment of India’s population that could qualify as “The Aspirational Indians”. It didn’t take me a lot of effort. With the cues that the economic growth of India is throwing at us – premiumisation trend, luxury / revenge travel, rising number of entrepreneurs, etc. – I could easily conclude that it’s the Gen-Z that’s driving credit card growth.

Okay, now how do you lure this class of potential credit card customers? I remember students of top B-schools getting free credit cards from established issuers. But what about the rest of the young aspirationals? We all know there’s enough competition with some legacy Issuers who’ve got the proverbial “first-mover advantage”, but that also implies they’ve got the legacy systems! How can the next generation of Issuers work using first principles and craft a lean and superior product? We, at CARD91, will surely answer this question in the next few days to come ☺

However, for now, let’s just focus on the specific preferences, lifestyle, and spending habits of this demographic. Here are some features that I felt could be appealing:

Instant Card Issuance:

Millennials hate to wait! If an Issuer imbibes this core principle, a major advantage over legacy Issuers is already gained. Quick and easy application processes with instant card issuance for immediate use are absolutely non-negotiable for Gen Z.

Credit Card on UPI:

Although one may be new to credit card, UPI is omnipresent now! Gen Z is pretty familiar and comfortable using UPI and therefore, this is one of the must-have features to capture the market especially when the legacy issuers are still struggling to make it functional.

Reward Programs for Online Shopping, Food Delivery, Dining, and Entertainment:

Tailored rewards or cashback for online shopping on popular e-commerce platforms, special discounts on food delivery services or dining at partnered restaurants, and exclusive access to movie theatres, streaming services, music subscriptions, and live events are a must have!

Low Forex Markup for International Travel:

Unlike the previous generations, Gen Z is more keen to discover the world from an early age. Since it may still not be earning much, a LOW / ZERO FX mark-up feature on credit cards is surely a hotseller!

Travel Rewards for International or Domestic Trips:

Millennials are explorers in the true sense – domestic or international travel is always on their mind, and on the cards 🙂. Travel-related benefits such as discounts on domestic flights, hotel bookings, or holiday packages within India, exclusive lounge access, and waiver on fuel surcharge are needed in every credit card targeted at this generation.

Local Lifestyle Perks:

Millennials consider work-life balance very important in their overall well-being and are spoilt for choices when it comes to including “life” in their lifestyle! An Issuer must get into partnerships with local brands, gyms, spas, or wellness services to provide discounts or exclusive offers.

Financial Management Tools:

Millennials are eager to learn about building a large corpus. Budgeting features, spending insights, and real-time notifications to help cardholders manage their finances effectively can be a good attraction. An educational initiative on how to get maximum benefit from a credit card by being a transactor can help. Also, a tie-up with any personal finance assistant offering discounted or complimentary services is a plus point.

Customized Offers:

Millennials love personalized experiences! AI-led tailored promotions and discounts based on spending patterns and preferences can be a good draw.

Gamified Rewards:

Accelerated rewards with increasing spends and other milestones can hold this generation’s interest and drive higher card usage.

Language and Regional Support:

Although we are a large, English speaking nation, there’s an even larger chunk of population (Gen Z included) that still prefers Hindi or a local language. To create that “wow” factor, the Issuer can offer customer service and mobile app interfaces that support multiple languages and cater to regional preferences. 

Student-focused Features:

Career development is an important focus area for this generation. The Issuer that can give access to online courses, career-building resources, student discounts, or networking events to support professional growth will surely have an edge over others.

Flexible Credit Limits:

Millennials are either yet to start their professional journey or are in a very early stage. Cards that allow for flexible credit limits based on income and spending habits, giving users more control, are certainly more acceptable.

Green Initiatives:

With the increasing exposure to sustainability initiatives in academic institutions over the last few years, even my daughter teaches a lesson or two to me! Issuers offering cards manufactured in an eco-friendly manner or those with features that contribute to environmental causes will be able to emotionally connect with Gen Z millennials!

Collaborations with Local Influencers:

This generation has a far more extensive online social presence than physical presence. Partnering with popular local influencers or celebrities who are active online for exclusive offers and promotions can drive higher card usage.

Understanding the local culture, preferences, and the unique challenges faced by millennials in India is crucial to design the right credit card product that resonates with this demography. Additionally, keeping up with the rapidly evolving digital landscape and incorporating technology-driven solutions will likely appeal to the tech-savvy nature of millennials.

If you’re an Issuer, no time better than the present to launch a credit card product for this generation. 

Authored by Shailabh Kothari, Director – Sales and Alliances at CARD91

In today’s fast-paced world, credit cards have become an integral part of our financial landscape, offering convenience, security, and flexibility for seamless transactions both online and offline. However, credit cards go beyond mere payments, providing a range of value-added services that enhance the overall user experience. One such service gaining prominence is the Reward Loyalty Program.

Reward Loyalty Programs incentivize cardholders for their spending habits and loyalty to a particular credit card issuer. These programs offer various benefits, including differential reward points, closed-loop EMI programs, meta-data engines, and cardholder-defined actions, significantly enhancing the cardholder’s experience.

Differential Rewards Points:

A key feature of Reward Loyalty Programs is the differential rewards points system, allowing credit card issuers to offer rewards based on cardholders’ spending patterns. This feature goes beyond Merchant Category Codes (MCC) or Transaction Identification (TID), allowing customization based on parameters such as pin code, duration, or specific MCC for particular dates. For instance, cardholders may receive 5x reward points during special occasions like birthdays or wedding anniversaries, adding a personalized touch to the rewards program.

Meta Data Engine:

The Meta Data Engine enhances portfolio management for credit card issuers by efficiently processing vast amounts of data for better decision-making. This tool empowers portfolio and product teams to collaborate effectively, enabling them to identify new opportunities and convert potential customers into cardholders.

Card Holder Defined Actions:

The Card Holder Defined Actions feature empowers cardholders to take various actions through mobile applications, such as increasing credit limits or using reward points as per their preferences. Integration with aggregator EUROP Assistance enables cardholders to redeem rewards across various industries and companies, enhancing flexibility and utility.

In conclusion, Reward Loyalty Programs in credit cards offer a holistic approach to enhancing the cardholder experience, particularly appealing to the millennial demographic. By offering personalized rewards, affordability through EMI options, efficient data management, and user-defined actions, credit card issuers can differentiate themselves and add significant value to their customers’ financial journeys, aligning with the evolving preferences of the millennial generation.

Authored by Deepak Bhatt, Director of Sales at CARD91