CRED Wins RBI Nod for Payment Aggregator License, Gearing Up for Expansion
In a significant development for the Indian fintech landscape, CRED, a Bengaluru-based startup, has secured the much-coveted in-principle approval for a payment aggregator license from the Reserve Bank of India (RBI). This pivotal approval is set to bolster CRED's position in the market, enabling it to serve its customers more effectively and roll out new products with greater agility.
As a payment aggregator, CRED will now bridge the gap between merchants and customers more efficiently, facilitating direct payment processing. This move is expected to slash costs, streamline payment flows, and offer direct merchant onboarding capabilities. Furthermore, it empowers CRED to settle funds with merchants directly, broadening its service reach.
This milestone comes at a time when the RBI has shown a cautious approach towards licensing fintech operations, highlighted by its recent directive to Paytm Payments Bank to suspend most of its activities. The approval for CRED, therefore, marks a significant vote of confidence in the fintech startup, valued at $6.4 billion and backed by heavyweight investors such as Tiger Global and Coatue.
CRED's ascent in the fintech domain is noteworthy. Initially focusing on credit card bill payments, the company has progressively diversified its services to encompass loans and investments. This strategic expansion was further underscored by its recent acquisition of the investment platform Kuvera, indicating CRED's ambitious vision for growth. Targeting India's affluent segment, CRED is poised to leverage its new license to scale new heights in service offerings, reinforcing its competitive edge in the burgeoning market.
Analyst comment
Positive news: CRED has received approval for a payment aggregator license from the RBI, enhancing its position in the market and enabling it to serve customers more effectively. This approval will help CRED bridge the gap between merchants and customers, reduce costs, streamline payment flows, and broaden its service reach. It also signifies a vote of confidence in CRED amidst the RBI’s cautious approach towards licensing fintech operations. With its ambitious vision for growth and support from investors, CRED is well-positioned to capitalize on its new license and strengthen its competitive edge in the market.
