Indian internet platforms across the wider e-commerce space have entered the race for large scale customer data acquisition with the launch of Ola and Paytm’s credit cards. While Paytm rolled out its co-branded credit card in association with Citibank on May 14, Ola launched a similar credit card in association with State Bank of India on May 16.
The newly launched Ola Money SBI Credit Card, for instance, will offer cash-back discounts and rewards which will be instantly credited to the users’ accounts in the form of Ola Money. This can then be redeemed against Ola rides, flight and hotel bookings, with lifetime validity.
“Transport and transit payments are one of the largest digital payment use cases worldwide. This card will help transition millions of Ola consumers from cash to secure, reliable and convenient digital payments not only for their daily commutes but for other expense categories as well,” said TR Ramachandran, Group Country Manager - India and & South Asia, Visa.
Paytm’s Paytm First Credit Card, in collaboration with Citibank, will offer a universal 1 per cent unlimited cashback with no restrictions on rewards for any transaction. Vijay Shekhar Sharma, chairman and CEO of One97 Communications, parent firm of Paytm, pointed out that the offering should increase payments flexibility for Paytm users, and will help spur large-ticket cashless payments.
While a cosmetic examination of these companies’ entry into the financial products sector might suggest an attempt to tap into a financially lucrative segment, analysts say they stand to gain much more. On the top of the list is the capability to deploy a wider data net, with credit cards giving these platforms an opportunity to analyse customer behaviour outside their platforms.
Ankur Pahwa, Partner and National Leader, E-Commerce and Consumer Internet at EY India, pointed out that the foray is “fairly intuitive and logical” for e-commerce firms. While such platforms have some of the largest repositories of customer information, it is largely confined to their behaviour inside their own marketplaces.
Launching credit cards, however, makes the net wider. “If I have a credit card, I’m not going to restrict myself to spending on just one platform. This gives the company insight they did not previously have: customer spending behaviour outside their ecosystems,” Pahwa pointed out.
Broader access to customer preferences makes it much easier to push targeted offers. “Such products offer a platform for understanding user behaviour, which becomes a way to more effectively push your products to customers,” Anand Ramanathan, partner, Deloitte pointed out. By launching their own credit card, companies can also bring down total cost of ownership for their customers while simultaneously beefing up their own user base.