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Samsung dives into India’s credit card space with Axis Bank

The news: Samsung will launch two co-brand Visa credit cards in India with Axis Bank, per a press release.

Both cards offer 10% cash back on all Samsung purchases and rewards for purchases made at select merchants, including online grocery provider bigbasket and food delivery brand Zomato. Neither has a transaction minimum.

The cards come in two tiers:

  • The Signature card has an annual fee of INR 500 ($7), and cash back is capped at INR 10,000 ($135) annually. It offers a welcome bonus of 2,500 points worth INR 500 ($7) after customers make three transactions.
  • The higher-tier Infinite card costs INR 5,000 ($68), and cash back is capped at INR 20,000 ($271). The card has a 30,000-point welcome bonus worth INR 6,000 ($81) after customers make three transactions.

Why it’s worth watching: India’s credit card market is ripe for growth.

There were about 939 million debit cards in circulation in August compared with only about 78 million credit cards, according to data from the Reserve Bank of India. And the government is trying to increase credit card use: Last week, the National Payments Corporation of India expanded the Unified Payments Interface (UPI)—the country’s mobile bank-to-bank instant payments system—to link with credit cards. This feature will let more merchants in India take credit card payments indirectly, which could boost overall use.

While several fintechs have been competing to fill the credit gap, established issuers like Axis Bank may have an easier time doing so thanks to their scale. The government’s recent crackdown on fintech lending may also put Axis Bank in a better position to grab market share.

The opportunity: Here’s how each player involved can win from the Samsung Axis Bank Visa credit cards.

  • Samsung can use the cards to tighten customer loyalty and drive sales volume. Co-brand cards let retailers use brand-specific rewards to develop stronger customer relationships. Best Buy, for example, said its credit card was the second-largest driver of customer loyalty and repeat action.
  • Axis Bank can use Samsung to increase its credit card market share. Samsung is a popular technology brand in India, especially for mobile devices. Axis Bank can use this popularity to attract more credit cardholders and bolster spending.
  • Visa can use the cards to maintain its lead over home-grown network Rupay. While Rupay dominates the Indian debit card sector, it lags far behind in the credit card space, where Visa and Mastercard take the lead. The Samsung cards can help Visa maintain its lead over Rupay and compete more effectively with Mastercard.



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