This would mark a significant chunk of the Indian credit card market and account for around 25% of total issuances by the end of fiscal 2028, from an estimated market share of 12-15% today. A report by fintech startup Hyperface and consultancy firm Redseer says co-branded credit cards show better activation and more spending compared to their traditional peers. These cards started to gain momentum owing to increased customer interaction with renowned brands, and these cards received a favorable response among consumers. In India, credit cards have emerged as a rising payment mode for household expenses-with the share seen doubling from 5% in FY21 to an estimated 10% by FY24. Co-branded credit cards are expected to grow at 35-40% versus 14-15% for regular credit cards. They have been hugely successful because of relevant rewards, strategic partnerships, and exclusive deals.
Report: More than 75-80% of Co-branded cards get issued via partnerships that occur with e-commerce organizations. The prospects look great for co-branded cards, but the regulations are clamping down. The RBI has tightened data security rules and added more transparency for customers. They also put a limit on the contribution of the partner in co-branding activities regarding marketing and customer acquisition.
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
Co-branded credit cards will have a very promising future, and are estimated to capture 25% of the market share by 2028 in India. This growth can be attributed to increased customer engagement, higher spend, and association with recognizable brands. The RBI has made the rules more stringent to ensure better security of data and transparency for customers. Co-branded cards are expected to grow at a much faster pace than conventional credit cards. Indeed, within this dynamically changing landscape, industry players have to adapt to new regulations and are still offering attractive rewards and special deals to their customers.
