Report Says Co-Branded Cards to Reach 25% Market Share by 2028

Co-branded credit cards are expected to make up a notable portion of the Indian credit card market, comprising around 25% of total issuances by the end of the fiscal year 2028. This is a significant increase from the current 12-15% market share. The report by fintech startup Hyperface and consultancy firm Redseer shows that co-branded credit cards are experiencing a higher activation rate and increased spending when compared to traditional credit cards. These cards have grown in popularity due to increased customer engagement with well-known brands and a positive reception among consumers.

Credit card usage as a payment mode for household expenses in India is on the rise, with the proportion doubling from 5% in FY21 to an estimated 10% by FY24. Co-branded credit cards are expected to grow at a rate of 35-40%, overtaking the expected 14-15% growth rate for regular credit cards. This success is due to relevant rewards, strategic partnerships, and exclusive deals.

The report highlights that the majority of co-branded cards, approximately 75-80%, are issued through partnerships with e-commerce organizations. The future looks good for co-branded cards, but it’s important to note that regulations are getting stricter. The Reserve Bank of India (RBI) has made data security rules more stringent and required more transparency for customers. They have also limited the involvement of co-branding partners in marketing and customer acquisition activities.

Recent Success of Co-Branded Credit Cards in India

• Tata Neu HDFC Bank Credit Cards: HDFC Bank and Tata have collaborated to launch the Tata Neu Infinity and Neu Plus Credit Cards, which are best suited for shopping at Tata brands.
• Swiggy HDFC Bank Credit Card: This card is a partnership between Swiggy and HDFC Bank and provides offers and discounts while ordering food through Swiggy. With an annual fee of ₹500, the Swiggy HDFC Bank Credit Card offers 10% cashback on Swiggy.
• Amazon Pay ICICI Bank Credit Card: ICICI Bank and Amazon have introduced the Amazon Pay ICICI Bank Credit Card with no fee. This lifetime-free credit card is best suited for shopping and offers discounts and perks to loyal Amazon users.
• Flipkart Axis Bank Credit Card: Shopping enthusiasts will like the Flipkart Axis Bank Credit Card, a collaboration between Axis Bank and Flipkart. This card has an annual fee of ₹500 plus taxes and offers 5% cashback on purchases made on Flipkart.
• EazyDiner IndusInd Platinum Credit Card: IndusInd Bank and EazyDiner have launched the EazyDiner IndusInd Platinum Credit Card for food lovers. With no joining fees, this LTF card offers a 3-month EazyDiner Prime Membership and 500 bonus EazyPoints.

Bottom Line

The future looks promising for co-branded credit cards, with expectations of reaching a 25% market share by 2028 in India. The growth is due to more customer engagement, increased spending, and partnerships with well-known brands. The Reserve Bank of India (RBI) has implemented stricter rules to improve data security and customer transparency. Co-branded cards are expected to grow faster than traditional credit cards despite the challenges. In this changing landscape, industry players need to adjust to new regulations while still offering attractive rewards and special deals to customers.