Credit Wars: Amazon Enters the Ring

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While the pandemic has been raging through the world affecting normal life as well as well-established industries, a silent war has begun in the realms of the credit card world. Online payment apps like PhonePe, Paytm, CRED, and now with the addition of Amazon to the mix, this market has entered a monopolistic competition phase. While all the brands offer the same core service, payment of credit card bills, only CRED offers rewards for the same. 

As of September 2020 RBI has said that there are 5.86 crore credit card holders and that number is rapidly growing. While most credit card users used to settle their credit card bills through their respective bank’s website, the past few years have seen the bills being closed through various digital payment apps like PhonePe, CRED, and PayTm. This shift has been largely due to the introduction of UPI methods.

The aim of the game seems to be information. If the company can collect data on how much money a person spends and for what items they can essentially use that information to their benefit or sell that information to other companies. It is difficult to get insight into a customer based on the purchase of a single item but, having a history of transactions will enable a company to get useful insights into the customer. To accommodate faster check out amazon has a list of credit cards that a user has saved while making purchases on the site. A consolidated list can be found on the ‘credit card bill payment’ page. When asked if Amazon would provide rewards for payment of credit cards through amazon the spokesperson for Amazon declined to comment. Amazon already offers co-branded credit cards in partnership with ICICI Bank in India that offers rewards ranging from 1% to 5% as cashback to its Prime as well as non-Prime customers.

But Amazon entering this market might mean that there is huge potential there. Amazon’s predatory behavior is their go-to method for capturing any market. Fearing the same CRED has launched a massive social media campaign to capture as much of the market as fast as possible

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