Fintechs help banks acquire co-branded credit card users

As NPAs rise, banks target partnerships with brands with loyal, high-frequency customers

- Salman S.H.

A new breed of fintech startups is helping banks co-brand and manage credit cards with leading consumer brands, as issuers outsource origination to platforms such as Hyperface, Card91, Falcon, and VegaPay.

As credit card nonperforming assets (NPAs) inch up and credit card issuances flatline, several private sector banks are turning to these players for digital-led acquisition while firmly retaining the issuer role. Lenders including YES Bank, ICICI Bank, AU Small Finance Bank, Federal Bank, and IndusInd Bank have been outsourcing credit card origination to these startups, according to conversations with industry experts and fintech operators.

Co-branded credit cards run on networks such as RuPay over UPI, Visa, and Mastercard. What sets them apart is the bank's ability to target customers across specific industries and sectors-e-commerce, travel, hypermarkets and jewellery-by partnering with brands with loyal, high-frequency users.