The very first reason most people use credit cards is for rewards.
When we ideated SURE, we looked beyond just rewards. We looked at innovations India has done by leapfrogging peer to peer payments with UPI. We looked at debit cards.
And, we looked at why people use digital payments.
UPI payments are the easiest. Anyone who has a bank account is automatically eligible, and can get started using UPI on their smartphone.
Being the oldest digital payment system, credit card networks have an established merchant system. This empowers them with a pro-consumer chargeback process.
The cumbersome application process, and uncertainty of credit card approvals is the biggest deterrent to getting a credit card.
UPI transactions on the other hand make debit entries into your bank account for every transaction. Imagine paying Rs.10 for tea twice a day will have 60 entries on your bank statement.
Credit card companies generally try to make you over spend, default on payment or take EMI’s. It can become a deep trap for those who are new to credit cards.
Customer support with most of the traditional financial institutions is non-existent. And finally everyone knows the relationship managers only job is to upsell products to customers – often unwanted.
The best digital payment mode
Inspite of its low penetration in India, we think credit card is still the best payment mode for consumer-to-business transactions.
We tried to understand the reasons why credit cards are not widely used in India.
India is different from western markets, and every successful multinational company had to tweak their business model to gain traction in India. To name a few, Google introduced offline features, Amazon/Uber accepted cash, Dominos/McDonald’s introduced local flavours; but credit card companies never adapted for the Indian consumer.
The current credit card business model is based on premium consumers and fees. India is a volume-driven market and such fees are being disrupted globally – paring the current business model.
UPI’s adoption shows a possibility of a 10X market waiting to be tapped with a simplified credit card offering.
Building a sustainable business
We want SURE to be in the market for years to come.
Generating revenues and profits is at the core of sustainable business.
UPI currently has zero MDR. The top UPI apps don’t make any money when you do a transaction. They instead use your data, or will try to sell you something else which can make money for them. We at SURE don’t want to do that – will not be doing that.
A Credit card has around 2-3% MDR, which is split between the card issuer, licensed financial institution, payment network, POS or the payment gateway.
MDR is paid by businesses that accept cards and this allows continuous innovations at every stage.
At SURE we do not want to make money from fees or hidden charges. We want to be transparent and make money from every transaction you spend through a cut in MDR.
Till recent times only banks and financial institutions could operate in this regulated sector, and the absence of fintech APIs was a deterrent for start-ups in this space. Now is the time for startups to offer better financial services.
Come, join us in the journey.