Flipkart is a company which is going through some transition period. However, even in this chaos, the company is keeping its eyes and ears open for other ventures and businesses in India. There is this new trend where companies are launching their own credit cards. Apple has done by partnering with a bank and now Flipkart along with Ola is doing the same.
Ola, according to the sources close to Economic Times, is rumored to be in links with State Bank of India. Ola and Flipkart, the duo have done a lot of research before coming to this conclusion that they need to launch their own credit cards. The being said, Ola has around 120 million users and the company is going to issue a test run in the next week itself. These plans were not leaked for a long time but as the project comes close to launch it is hard to keep everything under the wraps.
Ola is planning to launch around 1 million cards in the first phase of this venture. The company has apparently studied the card usage of the consumers before entering this market. That being said, the birds were chirping when the news came out and the persons who wanted to be anonymous said, “Ola is betting big on credit-based payment as next frontier of digital payments. Unlike traditional brand partnerships that focussed only on marketing, these rewards are now going to be structured in such a way that these technology companies can back-calculate the customers spending patterns.”
Ola is also going to award deep discounts for people using their credit cards. The same goes for Flipkart. The companies offering rewards is a strategy to lure in users at first, a strategy used by almost every company trying to bring in consumers on its platform. That being said, a person aware of the matter said, “Rewards offered are also expected to be higher than market standards in a bid to lure customers. The Broader strategy is to offer wider services aligned with mobility and beyond, with a digital-first onboarding experience, real-time expense management and instant rewards system linked to spends.”
Investors were also willing to talk about the pros and cons of this move by Ola and Flipkart. There is a lot of news about the same but the investor wanted to stay anonymous as he talked to ET. He said, “Credit card collaboration is an opportunity for internet companies to help them understand their customers better, map transaction history including offline spends, increase spending on their storefront, cross-sell, and over time better assess credit scoring for lending.”