In India, there are just three credit cards for every 100 persons. In India, on the other hand, there are about one billion debit cards in circulation today. Indians have essentially spent their whole lives on debit cards, resulting in a credit score of zero to one. However, this implies that there is a greater chance for penetration in the South Asian country.
Slice is a fintech company that aims to challenge the credit card business in India. Slice, a Bengaluru-based firm, is offering a new-age payment card that promises to alleviate GenZ and millennials’ credit card concerns. The banking system in India, according to Founder and CEO Rajan Bajaj, has long considered credit cards as a lending product rather than a payment instrument. Slice, a four-year-old firm, offers a prepaid card with a pre-approved credit line, according to reports.
In summary, Slice has made it significantly easier for more people to receive a card, even if they don’t have a regular full-time employment, and the enrollment procedure is quick. Slice has over three million members and is now adding incentives to its app as part of its effort to make the plastic card into a larger financial instrument.
According to Bajaj, the largest draw for customers is the ability to develop credit ratings, which would eventually qualify them for better credit cards from other companies and banks, as well as loans for other purposes. Most Slice customers have a credit score of over 700 after around six months, he claims.
Slice recently raised a funding of $220 million!.
Slice, a fintech business, has raised $220 million from a group of investors led by Tiger Global and Insight Partners, valuing it at over $1 billion, making it the newest Indian unicorn. Sunley House Capital of Advent International, Moore Strategic Ventures, Anfa, Gunosy, Blume Ventures, and 8i were among the new and current investors in the series B funding.
Slice is the 41st unicorn this year, demonstrating investors’ continued willingness to fund IT companies in the face of rising consumer demand for digital services. According to Crunchbase data, the Bengaluru-based startup has raised around $258.8 million in equity so far. It received $20 million in June from a group of investors led by Blume Ventures and Gunosy.
Slice wants to utilise the new funding to grow its payments footprint, employ talented staff, and extend its product offerings, according to a press statement issued on Monday. Slice, which portrays itself as a credit card disruptor, allows young Indians to pay bills using its super card, a prepaid Visa card with a credit line. Users may get up to 2% cashback on each transaction, according to the business. It claims to send out over 200,000 cards every month. “While the majority of Indians have bank accounts and debit cards, just a fragment of the banking population possesses credit cards, with industry estimates putting the number at fewer than 35 million. Furthermore, the country’s new credit-rating system only covers a small portion of the population, making it difficult for them to obtain a credit card,” according to the business. Slice has almost five million members, with an average age of 27.
According to a recent research by NASSCOM and PGA Labs, Indian start-ups raised over $6 billion in Q3CY21. Fintech start-ups received around 16% of the total. “Fintech is continuing to build on its history and expand its reach into the startup community. According to the research, “the growing infrastructure stack, innovative solutions, and new business models will keep this industry in the spotlight.”
In India, how is Slice addressing credit card issues?
Essentially, with slice, the business is aiming for everyone who is credit-worthy, with a market size of 400 million people with credit limits ranging from Rs 10,000 (US$ 134) to Rs 10 lakh (US$ 13,425). Bajaj further states that the Slice app is meant to be extremely engaging, accessible, and approachable to millennials and Genz, allowing them to genuinely grasp and demystify traditional banking.
The slice app allows users to have total control over their card, including the ability to track spending and set payback schedules, to mention a few features. Slice also provides a fully free credit card with no hidden costs or annual fees, unlike regular credit cards that typically come with fixed yearly rates. Customers can use the product for free for the rest of their lives if they stick to a monthly payment schedule.
To top it off, Slice just announced a three-month no-interest deal, allowing consumers to spread out their credit card bills for free over three months. According to Bajaj, this is the industry’s “longest interest-free payments” deal, with no “hidden or additional expenses.” In brief, holders of the Slice card can earn up to 90 days of interest-free payments.
The fintech arm has also developed “slice rewards,” which give up to 2% back on every card purchase and can be redeemed for cash right away. “We’ve been working with numerous firms like Amazon and Flipkart on a no-cost EMI (equated monthly instalment) offer for two years,” Bajaj told Financial Express Online. Slice users may now use these two new capabilities to make purchases at over five million Visa-accepting merchants. They may also convert their monthly expenses into three-month instalments without incurring any additional costs such as hidden fees or GST.
“After seeing the success with our no-cost EMI products with no hidden or extra charges, we believe it is time for the industry to start viewing credit as a consumer product with Facebook, Google, and Instagram as competitors. Opposed to pushing it as a loan product to consumers,” said Bajaj.
According to reports, Bajaj added that May of this year was the strongest month since its debut, and June has seen a 25% increase. The firm, which offers users with credit limitations based on its own balance sheet, said it will utilize the new money to expand its client benefits. Another remarkable achievement, according to him, is that within six months of joining Slice, more than 65 percent of users’ credit scores had risen to 730.