Cred Business Model is quite literally, a new money transfer technology from India to its abroad clients and friends in the global market. It is the future of money transfer and is quite possibly going to be the most popular business model of the future.
The idea of the cred business model was conceived by Kunal Shah, founder, and CEO of credits exchange enterprise, a company that specializes in online mobile money transfer. He saw the need for an affordable, user-friendly, secure, and fast electronic cash transfer platform that is accessible across multiple currencies.
How Does Cred Busines Works ?
The best way to do this is through the use of a hybrid internet/mobile platform, where credits are exchanged through an application and secured between the parties. This was then translated into a cred business model and now Kunal and his associates have been working on a new and improved version.
Currently, the cred business model has evolved with the advent of newer technology and added value to the existing system. Due to the rapid success of this model, Kunal and his associates have been working on an updated version of this model, which will also incorporate merchant services on the platform.
They are currently working on it and expect it to be launched in the next few months. One of their main objectives is to make the whole process of credit card billing easier and more efficient. For example, a client would not have to worry about due dates, balance transfers, etc.
Biggest Challenges of Cred
The biggest challenge that Kunal and his associates face is hidden charges and overheads that they had not accounted for before starting the venture.
One major area they faced was transaction fees. Transaction fees are non-refundable which meant that once a client made a transaction, the company did not refund the amount back to him. Due to this reason, some clients are hesitant to use this model due to the hidden fees.
Well, this problem is here to stay for at least the next 6 months or so as Apple mulls over the introduction of the iPhone app that will force companies like hers to introduce transaction fees as standard.
While many other companies have already adopted this concept, Apple is the only company that has not done so.
Another challenge that they face is the inability of their model to provide instant credit lines. Currently, users of their service cannot obtain a credit card number through this process.
with the impending release of the iPhone 8, this whole process might change.
How Cred Beating their Competitors ?
Apple is rumored to be planning to introduce an Instant Credit Line feature in its next mobile phone. Even though no firm release has been made, their website says that the feature is coming soon.
Kolkata-based POS provider Freshdesk has recently completed its acquisition of Paypal, one of the largest payment processors in India.
In addition, the company also signed a Memorandum of Understanding (MOU) with MasterCard and Visa, which would value the business between the two entities and would result in a valuation of over 2.2 billion valuations.
This valuation was done using the assumption that Paypal customers in India would convert their debit cards to credit cards. The implication of this clause is that Freshdesk could charge an income tax for its services in India.
As Paypal withdraws more money from its customers, the credit card payments in India may grow steadily too.
However, debit card payments from abroad are likely to grow in parallel with the growth of online payments in India. With a debit application like credit, one can easily process all kinds of online payments in India from any part of the world.
As the online market is becoming competitive day by day, it is not difficult for a crediting business model to compete with other players in the same industry.
A crediting system like credit is useful because the application does not require any type of upfront fees or any kind of investment. Once a user has made the initial deposit of a certain amount, he or she can use their credit score to receive payments from various sources.
These payments are sent to the designated bank account. Once the user receives his or her payments, he or she can redeem his or her crediting points.
The banks will verify the validity of the user’s bank account through the SEBI. If the SEBI finds that the bank account holder is financially fit and legitimate, then the SEBI will give the bank a notice to send the payments.
One may ask whether a reply platform could be as successful as a traditional Paypal-revenue relationship. While both methods have their own advantages, repay actually offers a few unique advantages, which make the model even more popular among entrepreneurs.
For starters, repay allows the entrepreneur to benefit from the fact that there is no single fixed interface that the landlord should stick to.
Therefore, it is easier for people to spread the word about their business without being restricted by the rules and regulations set up by the brick and mortar establishments.
In addition to this, some rentpay startups also offer the option of accepting credit card payments from people across the country and abroad.