Ola, Flipkart Team Up WIth SBI, HDFC To Launch Credit Cards: This Is How It Can Disrupt Fintech

In India, there are 160 crore saving and current accounts in all the banks put together, but compared to that, only 3 crore credit card users.

There is a massive gap in here, as far as credit card penetration goes, but things can change rapidly.

As per reports coming in, Flipkart and Ola, both are planning to launch their own credit cards, which will be designed and conceptualized in a special manner.

Data is the catalyst here, which can transform the way people are using credit cards, and Ola, Flipkart has some interesting plans related to it.

How will these credit cards be different? Keep reading to find out more!

Ola-SBI May Team Up For Credit Cards

As per the reports, India’s largest app-based cab-hailing app Ola has decided to team up with India’s largest bank: SBI to launch a credit card.

Typically such a partnership between a service provider and a bank works this way: The bank handles all the back-end work such as risk analysis, card issuance, payment processing, credit line management, and statement processing; while the service provider handles marketing, sales, and promotions, along with the branding.

But here, things would be different.

Ola, which has millions of users, will use the data to calculate spending patterns of the users, and then accordingly offer them discounts, coupons, and offers.

The credit card from Ola can be launched as soon as next month, and they plan to dispatch 1 million of them, in this year itself.

Flipkart May Team Up With SBI/Axis Bank For Credit Cards

On the other hand, India’s one of the biggest ecommerce portals: Flipkart too is planning to launch their own credit card.

This will be done in partnership with either HDFC Bank or Axis Bank, as the talks are still in the initial stage.

This can be seen as a reaction to Amazon launching their own Credit Card in partnership with ICICI Bank last year, but the objective here is something bigger.

Just like Ola, Flipkart too is aiming to use data generated by their 10 crore+ users in India, and offer them credit offers via their credit card which they cannot refuse.

This won’t be the first time both Ola and Flipkart ventured into the credit and fintech niche. In 2015, Ola launched their own wallet: Ola Money, later, Ola Postpaid for helping users with payments.

On the other hand, Flipkart had launched an Aadhaar based credit offer for their online shoppers, and recently, we got news about video-based KYC process for instant loans.

But yes, a branded credit card would be a different ball game altogether.

Credit Card From Ola and Flipkart: How Will It Be Different?

The talks about this partnership between Ola and SBI; and between Flipkart and HDFC or Axis Bank will be unique in several aspects.

As mentioned earlier, Ola and Flipkart are very popular online services, having millions of dedicated users, who are spending money on their platforms, almost daily.

Using these data points, these companies will offer unique offers to the users, which would be customized based on the requirement. Likewise, the credit limit and the features of the credit card would be decided not on the credit score, but on the spending patterns.

Flipkart, for instance, is already working on more than 1000 various points to determine the creditworthiness of their users, and the same data would be used to offer them the offers, and the perks.

A person close to Ola said, “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,”

Data and behavioral pattern of the users would be the driving force behind this whole idea of credit card, and hopefully, it will unleash a new disruption in the fintech niche.

We will keep you updated, as more details come in.