Ride hailing unicorn Ola has now launched an Ola Money-SBI Credit Card to add to its many offerings related to payments and digital transactions. The company has inked a deal with SBI and Visa, and plans to issue as many as 10 Mn credit cards by 2022.
The companies claim that the Ola Money SBI Credit Card will alter the customer experience by offering a simplified application process, eliminating joining fees and providing seamless, flexible and convenient payments for 150 Mn Ola users. Ola claims the cards will help Visa and SBI bank acquire more customers in India and creates a new monetisation model for the ride-hailing company.
The company is allowing onboarding of new users for free for the credit card, and allows them to apply, view and manage their accounts directly on the Ola app. The cashback and rewards will be instantly credited to user’s accounts in the form of Ola Money.
Bhavish Aggarwal, cofounder and CEO of Ola, said, “We are excited to launch the Ola Money SBI Credit Card and we look forward to taking this to millions of Indians over the next few years. Mobility spends form a significant wallet share for users and we see a huge opportunity to transform their payments experience with this solution.”
The Journey Of Ola Money
Founded in 2011 by Bhavish Aggarwal and Ankit Bhati, the ride-sharing company had forayed into the digital payment space in 2015 with the launch of its online wallet Ola Money which allows users to pay for their rides and also pay bills, transfer money to others and shop.
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In order to develop the cashless payment system, it also launched Ola Credit in 2016, which allowed its users to pay for their rides later on. Under this, it offered user credit for seven days which could be availed by booking ola cabs.
Ola also introduced digital credit payment service “Ola Money Postpaid”. The credit service was rolled out in 2018 in pilot mode and had recorded 30% growth month-on-month. Ola Money Postpaid offers a 15-day credit line to the users.
Hardayal Prasad, MD & CEO, SBI Card said, “Through this card, we aim to address their evolving mobility spends while providing them with maximum value and unique benefits on their travel spends, especially for cab-based commute.”
At present, Ola’s suite of digital financial offerings includes Ola Money wallet, postpaid billing and micro-insurance for rides taken on the Ola platform.
TR Ramachandran, group country manager, India and South Asia, Visa said, “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.”
Why Is Credit The Craze?
In India, credit card has been amassed by rich and few. These select few people make top line of the credit industry in India, unlike the west where every person has a credit rating and is dependent on the same for all their payments.
Even though India is still far away from this reality, the increasing discussions on the creditworthiness and credit card users has charted a fresh start for the credit market in India. Currently, the credit card market in India is dominated by HDFC Bank, State Bank of India, ICICI Bank, Axis Bank and Citibank. In February 2019, a total of 46.1 Mn credit cards were in operation in India, with nearly 9.13 Mn credit cards and 89.11 Mn debit cards added in one year.
Amid the latest technology giants which have entered the market, here’s a brief:
- Paytm has launched a Paytm First Credit Card in a partnership with Citibank this week. The card offers rewards for every transaction, and is tied in to the Paytm ecosystem.
- Walmart owned Flipkart is reportedly partnering with Axis Bank or HDFC Bank later this quarter. The company is also tracking up to 1,000 data points to gauge a customer’s ability and intent to repay dues.
- Amazon offers Amazon Pay ICICI Bank Credit card. This was launched in association ICICI Bank, Amazon Pay (India) (Amazon) and Visa is currently in the pilot phase and has been rolled out to the first set of invited users only.
- Premium smartphone maker Apple rolled out its first credit card named Apple Card in March this year. It will work with the Apple Pay account and allow users to make payments at most points of sale.
It is to be noted that Visa and Mastercard, the global giants in credit card payments and servicing, have been struggling to stay relevant in the Indian market as payments platforms have adopted UPI and other payments standards more increasingly in their bid to go digital.