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hdfc bank: Cobranding with Tata Neu, Swiggy widens HDFC Bank cards’ reach


HDFC Bank’s credit card business has received a major push from its cobranding strategy in recent months. The private lender has distributed a million-plus cards with Tata Group’s super app Tata Neu and around 120,000 with foodtech major Swiggy, two people in the know told ET.

HDFC Bank had announced its partnership with Tata Neu around August 2022 and with Swiggy around July 2023.

For context: There are around 4.5 million ICICI Bank and Amazon Pay cobranded cards in use. This partnership was launched in 2018.

“The cards are being used mostly for grocery shopping, food delivery, purchase of electronic items and bill payments,” said one of the persons familiar with the development.

“HDFC Bank is not only using Swiggy or Tata Neu to acquire customers, (but) the bank is pushing these cards through its own distribution channels too, both online and offline… This helped the number grow exponentially,” the person said.


Also read | Swiggy joins co-branded credit card rush

Emailed queries to HDFC Bank, Tata Digital and Swiggy went unanswered as of press time Thursday.

Data from the Reserve Bank of India (RBI) shows that by the end of November last year, HDFC Bank had issued around 19.1 million credit cards, the largest among all the major lenders. Overall, there are around 96 million active credit cards issued in the country.

Also read | Paytm talks to banks for co-branded cards

A win-win proposition

While cobranded cards are mostly sold through the strength of the partner brand, adoption is higher where it can be used for rewards across a large ecosystem of merchants.

With a super app like Tata Neu, consumers have the advantage of using the cards across the entire Tata Digital platform. For Swiggy, consumers can use the card to order food online, eat out at restaurants and order groceries. The Swiggy card offers cashback on ecommerce portals like Amazon and Flipkart, too, which has expanded the scope of usage for these cards.

“Tata Neu cards can be used for extra points on Air India as well, which is not part of Tata Neu but is part of the Tata group, hence the opportunities to earn rewards are higher,” the person quoted above said. “The Swiggy card is mostly being used in tier one and metro cities, given that is where a large chunk of Swiggy’s customers are,” he added.

The second person aware of the development said that for Swiggy, the share of transactions through its own credit card continues to be small compared to other payment modes.

Also read | After UPI, now credit cards overtake debit card transactions

Banking on consumer spending

A senior banker said cobranded cards make more money when they get used actively outside the ecosystem of the cobranded partner, where typically rewards are not very high.

A large share of the revenue earned by banks on these transactions otherwise is expended to fund the rewards, he said.

“As of now, usage of these cards within the respective ecosystem is higher and the bank is bearing the cost of the business, but the bet is that going forward, more and more usage will happen at other outlets, which will make the product profitable,” the banker said.

Overall, banks have pushed the pedal on this business and cobranding is an important part of the strategy.

For example, Axis Bank – which has cobranded cards with Flipkart, Vistara airlines, and fintech startup Fibe (previously Early Salary) – has a credit card book of Rs 35,842 crore, up 72% year on year, the highest among its retail portfolio.

Also read | NPCI leans on bank partnerships to push RuPay credit cards

Tap to acquire

For consumer brands, getting on the cobranded bandwagon means partially lowering customer acquisition costs while significantly improving loyalty on the platform similar to having a loyalty programme or subscription plans. The caveat is that the platform has to be of a minimum scale for it to be attractive for banks to join hands.

For banks, this is also a means to activate dormant users. Industry insiders said that historically it has been seen that after getting a cobranded card, customers become more active.

Another reason why banks engage with consumer brands and companies is that additional gains start pouring in for financial institutions as dormant users become more active after getting a cobranded card.

“For banks, this means that there is an opportunity to activate some of these customers on credit cards, and gain from any growth in income down the line these customers will have,” a Gurgaon-based industry consultant said. “This was one of the reasons why internet companies are increasingly seeing interest from banks for cobranded partnership.”


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