{"id":13695,"date":"2022-12-04T19:09:11","date_gmt":"2022-12-04T13:39:11","guid":{"rendered":"https:\/\/blogrevamp.cashfree.com\/?p=13695"},"modified":"2023-11-30T17:17:25","modified_gmt":"2023-11-30T11:47:25","slug":"what-are-co-branded-card","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/","title":{"rendered":"What are Co-branded Cards &#038; How Do They Offer Customised Rewards and Discounts?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a8f1be02326b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #364250;color:#364250\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #364250;color:#364250\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a8f1be02326b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#What_are_Co-branded_Cards\" >What are Co-branded Cards?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#What_are_Co-branded_Credit_Cards\" >What are Co-branded Credit Cards?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Co-branded_Credit_Card_Examples\" >Co-branded Credit Card Examples<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Does_Co-branded_Cards_Rewards\" >Does Co-branded Cards = Rewards?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Co-branded_Credit_Cards_Pros_and_Cons\" >Co-branded Credit Cards Pros and Cons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Co-branded_Credit_Card_Regulations\" >Co-branded Credit Card Regulations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Eligibility_Who_Can_Be_a_Co-branding_Partner\" >Eligibility: Who Can Be a Co-branding Partner?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#Future_of_Co-branded_Cards_Key_Trends\" >Future of Co-branded Cards: Key Trends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/blogrevamp.cashfree.com\/what-are-co-branded-card\/#FAQs_on_Co-branded_Cards\" >FAQs on Co-branded Cards<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"wp-block-paragraph\">In the last two-three years, India&#8217;s co-branded credit card market has increased. Co-branded cards have been one of the most popular products to increase customer gratification.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While customers like <strong>rewards, discounts, and cash back<\/strong>, <strong>co-branding partners<\/strong> and <strong>issuers<\/strong> can <strong>scale their businesses<\/strong>. So, how do co-branded cards work?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, what are co-branded cards and how do they work? In this blog, we will uncover that and more!<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.cashfree.com\/card-issuance\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=cobranded_card_blog\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/-53I3je8iIKpUw5nLqxDhd3y-r1dSntrOTfi1bPay-vfFlgGtqPDxHgbP8y0uxbBkzhn3JbSAABr5fgg_eqlztq3DH5ZVQAwdnrDRuAyYq3t8tSUK25PFJ7gYgaWgP7HoJnPYOpduqh4SLtQv_pNK1hXGTe609rHrmGtCotpIBduUX289aoY2Mg0FgzFNg\" alt=\"What are Co-branded Cards\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-co-branded-cards\"><span class=\"ez-toc-section\" id=\"What_are_Co-branded_Cards\"><\/span>What are Co-branded Cards?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Co-branded cards are <strong>debit or <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/blog\/corporate-credit-cards-for-vendor-payments\/\">credit cards<\/a><\/mark><\/strong> provided by <strong>the issuers<\/strong> (banks, financial institutes, or <a href=\"https:\/\/www.cashfree.com\/blog\/fintech-companies-in-india\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">fintech companies<\/mark><\/strong><\/a>) by partnering with a <strong>merchant\/corporate entity <\/strong>to provide tangible benefits like cashback, lounge access, rewards, etc.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, <strong>co-branded debit cards, co-branded prepaid cards, co-branded gift cards,<\/strong> and <strong>co-branded fuel cards<\/strong> are all examples of co-branded cards offering different benefits from different segments (lifestyle, travel, fuel, etc.).<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/jveZ4kZ0n8mmrFf-t7R_19PTWUBDvC2dk_6GFtXQvFNv4LTV72L_IdQUQfNGRTl32FANvW7v7vCLTb0oRRHpDWVns0LZnpEyLqPk1YvGKqao7oSH4MGJ4i2jaDS-ofbDoIEPF2tUkbRVLyo7tocCgDGas2XtcrE6lIK72kbY5B2RkSS4mHtu-7AYUdCN4Q\" alt=\"What are Co-branded Cards\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-co-branded-credit-cards\"><span class=\"ez-toc-section\" id=\"What_are_Co-branded_Credit_Cards\"><\/span>What are Co-branded Credit Cards?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A co-branded credit card is issued jointly by the <strong>credit card issuing company <\/strong>(bank or financial institution) and a <strong>co-branding partner<\/strong> bearing both parties\u2019 <strong>names <\/strong>or <strong>brand logos<\/strong> that offers <strong>merchant-specific benefits<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, co-branded cards give more <strong>benefits and rewards<\/strong> to the <strong>customers,<\/strong> whereas the <strong>banks<\/strong> get <strong>more customers,<\/strong> and the <strong>co-branding partner<\/strong> gets the <strong>brand visibility<\/strong>.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Remember: <\/strong>The co-branding partner will not have access to the customer transactions done through the co-branded cards as per the latest <a href=\"https:\/\/rbi.org.in\/Scripts\/BS_ViewMasDirections.aspx?id=12300\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">co-branded credit card guidelines<\/mark><\/strong><\/a> released by the RBI.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s understand some co-branded card examples to dig deeper.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-co-branded-credit-card-examples\"><span class=\"ez-toc-section\" id=\"Co-branded_Credit_Card_Examples\"><\/span>Co-branded Credit Card Examples<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Out of many types of co-branding card opportunities, some co-branding strategies worked well. Travel cards are one of the most accessible co-branded credit cards to get. Let\u2019s look at the strategy of some of the popular co-branding cards.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Southwest Airlines<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Southwest is an airline company quite popular in the USA for offering flight-friendly services to customers. They partnered with Capital One to issue co-brand travel cards to optimise revenue. Below are the key highlights of their co-branding credit card strategy.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The co-branding credit cards by Southwest Airlines offered <strong>flexibility, transparency<\/strong> and <strong>simplicity<\/strong> to use as their travel cards across countries.&nbsp;<\/li>\n\n\n\n<li>They <strong>captured a large segment of the customer base<\/strong> by <strong>promoting rewards transparency<\/strong> and a <strong>rich set of offers and benefits<\/strong> (e.g., no restriction on the expiry of the miles earned).<\/li>\n\n\n\n<li>They focus on a niche customer base with a <strong>limited presence; hence<\/strong>, they have been one of the strongest players in the travel card industry.<\/li>\n\n\n\n<li>They also launched the Rapid Rewards frequent flyer program to <strong>promote own-branded travel cards<\/strong>.<\/li>\n\n\n\n<li>They ensured to make the card rewards the<strong> most transparent feature<\/strong> by <strong>offering points for every amount spent<\/strong> on the card.&nbsp;<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.cashfree.com\/contact-sales\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=cobranded_card_blog\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/U0tEoEdHQqLwSEUww2CiATsqXENOWL3ySLy9qZoG5sZuArNCaFq88XmfWvNv8vmjL8eR2kkaC6zMROHI-t1kiF3WhC0n0IZK54o7Tv8OG9qpHL8nibfsInyMxVkwP8WOTnnjE2Pjmq9AQzNH1azJOoN5Aiv7lxOJjUCFu0vrnJMUHYFpZzEZ01N1DsXklA\" alt=\"What are Co-branded Cards\"\/><\/a><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Target\u2019s Co-branded Cards<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As one of the largest retailers in the USA, Target decided to offer co-branded credit cards to its customers who are buying items from them regularly.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They offered <strong>co-branded credit cards<\/strong> and <strong>co-branded debit cards, <\/strong>which turned out quite well as both had considerable customer spending.&nbsp;<\/li>\n\n\n\n<li>Their cards provide <strong>different reward programs<\/strong> to <strong>suit the different needs<\/strong> of the customers.<\/li>\n\n\n\n<li>Instead of collecting points and redeeming them later for future purchases, these cards <strong>offered discounts for the amount spent<\/strong> through the cards.&nbsp;<\/li>\n\n\n\n<li>They allowed their customers to <strong>use their cards at other stores<\/strong> but <strong>made significant revenue<\/strong> by <strong>charging high fees<\/strong> on such transactions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Mercedes Benz<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Benz issued co-branded credit cards to its customers by partnering with American Express (AE) and Morgan Stanley. While AE has many co-branding partners in different industries (airlines, retailers, hotels), this partnership made significant revenue for all.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They targeted <strong>affluent class customers<\/strong> to increase their spending by <strong>offering customised reward programs<\/strong>.<\/li>\n\n\n\n<li>This partnership provided a <strong>successful co-branding example <\/strong>to the world <strong>in the retail industry<\/strong> since most partnerships did well in the airline industry.<\/li>\n\n\n\n<li>By adding Morgan Stanley as a co-branding partner, Benz <strong>widened its scope to add financial services<\/strong>.&nbsp;<\/li>\n\n\n\n<li>It allowed them to <strong>create new distribution channels <\/strong>to add customers from different segments.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s see the list of some of the popular co-branded cards in India:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a href=\"https:\/\/iocl.com\/NewsDetails\/54525\" target=\"_blank\" rel=\"noreferrer noopener\">Indian Oil Citi Credit Card<\/a><\/li>\n\n\n\n<li>HDFC Bank Diners ClubMiles Card<\/li>\n\n\n\n<li>IRCTC SBI Platinum Card<\/li>\n\n\n\n<li>Axis Bank Vistara Signature Credit Card<\/li>\n\n\n\n<li>HDFC Bank Regalia First Card<\/li>\n\n\n\n<li>JetPrivilege HDFC Bank Diners Club<\/li>\n\n\n\n<li>Citi Premier Miles Card<\/li>\n\n\n\n<li>Axis Bank Miles &amp; More World Credit Card<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Now that we have understood the co-branded cards with examples, let\u2019s know how they offer customised rewards and discounts.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-does-co-branded-cards-rewards\"><span class=\"ez-toc-section\" id=\"Does_Co-branded_Cards_Rewards\"><\/span>Does Co-branded Cards = Rewards?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Rewards and benefits are the real heroes of co-branded credit cards. There is no co-branded card that doesn\u2019t have a reward program, and through attractive rewards, only companies can catch more customers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, how do co-branded credit cards work?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of offering rewards at one store or a retailer, co-branded credit cards offer rewards, miles, and benefits for every amount you spend. So, whenever a credit card issuer offers any reward to you, they pay a premium to the co-branding partner (airline, hotel, retailer).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s understand the benefits of co-branded cards for different parties involved.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-co-branded-credit-cards-pros-and-cons\"><span class=\"ez-toc-section\" id=\"Co-branded_Credit_Cards_Pros_and_Cons\"><\/span>Co-branded Credit Cards Pros and Cons<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While co-branded credit cards offer multiple benefits to customers, they are beneficial to issuers and co-branding partners in many ways. Let\u2019s see what those are.<\/p>\n\n\n\n<figure class=\"wp-block-image is-resized\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/VzXsiFoHu6OpnueYboNo0dVqs4q1gOeJ-ihpWX_6dcGe6YnBuyX4Ndqp4SMte70cVyBhVB8Cz1g4VwoU6HOjgBfg_RJj_Xo8XdL-Kp0uTSO2tNRloteD60jedUkgMK2pqMbtMgOP_cR-cda1R9Le55xZnPqvtn5BjuFWIg_bqL3p6YS_0UFAA69gV72j-g\" alt=\"What are Co-branded Cards\" style=\"width:750px;height:325px\"\/><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/www.cashfree.com\/card-issuance\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=cobranded_card_blog\">Click to uncover details<\/a><\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-co-branded-card-benefits-for-the-cardholders\">Co-branded Card Benefits for the Cardholders<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Exciting rewards: <\/strong>Unlike the other traditional cards, these cards come with great rewards, offers and discounts so, the customers get rewarded for every amount they spend.&nbsp;<\/li>\n\n\n\n<li><strong>Milestone benefits: <\/strong>They also provide milestone-based benefits such as movies, travel, or stay to encourage the customers to gather more points.&nbsp;&nbsp;<\/li>\n\n\n\n<li><strong>Additional benefits: <\/strong>Some co-branded prepaid card programs, including <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/blog\/credit-card-processing-system\/\">credit card programs<\/a><\/mark><\/strong>, provide other benefits such as free insurance, and access to premium places like airport lounges, golf courses, etc.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-benefits-for-the-co-branded-card-issuers\">Benefits for the Co-branded Card Issuers<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increased customer base: <\/strong>The issuers gain more customers from the partnership with the co-branding partners.&nbsp;<\/li>\n\n\n\n<li><strong>More customer trust: <\/strong>The issuers gain more trust with greater engagement and have fewer chances for customers to move to any other competitor.&nbsp;<\/li>\n\n\n\n<li><strong>Better customer experience:<\/strong> The co-branded business cards provide a superior experience to their business customers; hence, the customer experience improves.<\/li>\n\n\n\n<li><strong>Increased regular transactions:<\/strong> Some co-branded credit card programs, like milestone benefits, can make the customers spend more and thereby increase regular transactions.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-co-branded-card-benefits-for-the-co-branding-partner\">Co-branded Card Benefits for the Co-branding Partner<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Brand visibility: <\/strong>The co-branding partners are the front face to provide\/explain the rewards and benefits to the customers. Thus, they get more brand visibility by directly communicating with the customers.&nbsp;&nbsp;<\/li>\n\n\n\n<li><strong>Customer retention: <\/strong>Co-branded cards can create a stronger and more loyal customer base since customers prefer a specific brand\u2019s card within a category.&nbsp;<\/li>\n\n\n\n<li><strong>Increased revenue: <\/strong>Due to the milestone benefits and other rewards, co-branding partners can generate more revenue.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-disadvantages-of-the-co-branded-cards\">Disadvantages of the Co-branded Cards<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">While co-branded bank cards are beneficial in many ways, not all co-branded cards could attract many customers. Some challenges make it difficult for the issuers and co-branding partners to enter into the partnerships.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Brand credibility: <\/strong>Brand partnerships are mostly long-term and if one brand fails or loses its goodwill, all other brand partnerships are put at stake.<\/li>\n\n\n\n<li><strong>Partner dependency: <\/strong>Every stakeholder in the brand partnership is dependent on each other for multiple resources and demands. Such dependency becomes a challenge for brands that are willing to offer attractive rewards and benefits.&nbsp;<\/li>\n\n\n\n<li><strong>Customer perception misfit: <\/strong>The mismatch of the customer perception and the brand image makes it difficult to retain long-term customers resulting in customer loss or lesser adoption.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, as fancy as it may look from an outer perspective, the co-branded credit card market has become highly competitive and one needs to offer extra and better than the other existing players.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s have an overview of the co-branded credit card regulations to help you plan your partnership with other brands to issue co-branded credit cards.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-co-branded-credit-card-regulations\"><span class=\"ez-toc-section\" id=\"Co-branded_Credit_Card_Regulations\"><\/span>Co-branded Credit Card Regulations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before we understand the eligibility requirements to become a co-branding partner, let\u2019s understand the difference between the issuer and the co-branding partner.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The issuer must be a bank or a non-bank company approved by the RBI. However, the co-branding partner can be any non-bank entity from any industry (travel, hotel, etc). In fact, a non-banking financial company (NBFC) can also become a co-branding partner.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.cashfree.com\/contact-sales\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=cobranded_card_blog\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/Iu4j24CudvRYJ3sb_GE7bSZrbso2AwyFVsJUJll3mMN5WsjA7B-1xy33e8NHFv9_basdIn_o0NC_l0m7whQFjpPhSVacGjKwjb7n9a-11cPNQsNXIJkKfpqeDMqAeGurgbca8n7Kw0NoTvwAUxgcmFFNVgToEvxxEw6jVow8fIhSXnH3l5IPco2yNaFE3A\" alt=\"What are Co-branded Cards\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-eligibility-who-can-be-a-co-branding-partner\"><span class=\"ez-toc-section\" id=\"Eligibility_Who_Can_Be_a_Co-branding_Partner\"><\/span>Eligibility: Who Can Be a Co-branding Partner?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The eligibility requirements for the co-branding partner are divided into two categories:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>NBFC must have net owned funds of \u20b9100 crores or more.&nbsp;The last two years\u2019 audited balance sheet must be available. The ratio of net NPA to net advances must be less than 3%.&nbsp;<\/td><td><strong>The co-branding partner is a non-bank company (travel, retailer, etc)<\/strong><\/td><\/tr><tr><td>The issuing bank must perform due diligence to assess and mitigate the reputational risk.&nbsp;<\/td><td>NBFC must have net owned funds of \u20b9100 crores or more.&nbsp;The last two years\u2019 audited balance sheet must be available. Ratio of net NPA to net advances must be less than 3%.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-risks-related-regulations\">Risks Related Regulations<\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Risk sharing<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Risk sharing in a co-branding partnership agreement means that the co-branding partner will share the credit risk (risk of non-payment) of the credit card customer and show the risk on its balance sheet.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While a non-bank entity is allowed to enter into an arrangement on a risk-sharing basis, an NBFC can only agree to partner on a non-risk-sharing basis as per the RBI guidelines.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Reputational risk<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The reputational risk is the risk of loss of reputation due to a default in the performance obligation by a co-branding partner. Hence, the issuing bank needs to take clear steps while entering into an agreement with the co-branding partner to not transfer the customer credit risk exposure.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, a precise and compliant co-branding agreement should exist in writing to include all relevant clauses required by the RBI.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/-53I3je8iIKpUw5nLqxDhd3y-r1dSntrOTfi1bPay-vfFlgGtqPDxHgbP8y0uxbBkzhn3JbSAABr5fgg_eqlztq3DH5ZVQAwdnrDRuAyYq3t8tSUK25PFJ7gYgaWgP7HoJnPYOpduqh4SLtQv_pNK1hXGTe609rHrmGtCotpIBduUX289aoY2Mg0FgzFNg\" alt=\"What are Co-branded Cards\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">That takes us to our next section on what is the future of co-branded cards in India. How key trends are driving the competition of the co-branded card players? Let\u2019s see some of the co-branded credit card trends shaping the future of credit cards in India.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-future-of-co-branded-cards-key-trends\"><span class=\"ez-toc-section\" id=\"Future_of_Co-branded_Cards_Key_Trends\"><\/span>Future of Co-branded Cards: Key Trends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Credit card spending in India in September 2022 surged <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/credit-card-spend-jumps-14-in-sept\/articleshow\/95155132.cms\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">14%<\/a> from its level in 2020 despite a reduction in the number of active credit cards due to a strict clean-up process followed by some banks.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The rise in the total spending on the cards is mainly because more customers are using co-branded cards since they provide attractive rewards. The rewards and benefits of these cards are customised in a way that suits one\u2019s lifestyle and spending behaviour.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s see what\u2019s coming in the future for these co-branded credit cards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Pro Tip:<a href=\"https:\/\/www.cashfree.com\/blog\/startup-statistics-in-india\/\"> Growth of Startups In India<\/a><\/mark><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Increased Use of Digital Platforms for Partnerships<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The issuers and the co-branding partners have started adopting digitised platforms to provide co-branded cards. These interactive platforms can communicate the needs of the customers more effectively with the issuers and partners.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Offering rewards for signing up for credit cards, and providing robust tech solutions for digital acquisition are some of the trends going to be seen in the future.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Co-branded Cards for Expense Management:<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most important trends in co-branded cards is that issuers will focus more on providing cards that will help reduce business expenses. Hence, more partnerships will happen in the business expense management segment.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Entering Untapped Segments:&nbsp;<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The issuers are moving towards entering new segments such as mass transit, smart cities, healthcare, <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/blog\/payment-links-forms-for-travel-hospitality-business\/\">hospitality and transportation aggregators<\/a><\/mark><\/strong> since they are expecting to make new customers.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Capturing a Diversified Portfolio:<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Issuers will partner with more than one co-branding partner to issue cards from the same industry to diversify their partner portfolio.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, Partner portfolio diversification, new customer segments, <a href=\"https:\/\/www.cashfree.com\/blog\/what-is-expense-management\/\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">expense management cards<\/mark><\/strong><\/a>, digital platforms, etc., are going to be the future trends for co-branded cards in India.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_Co-branded_Cards\"><\/span><strong>FAQs<\/strong> on Co-branded Cards<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What are co-branded credit card pros and cons?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While co-branded credit cards offer amazing rewards and benefits, it may be difficult for customers to own multiple co-branded credit cards for different segments (e.g., separate cards for travel, lifestyle and hotel stay rewards)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Are co-branded credit cards easier to get?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, co-branded credit cards can be issued instantly if the <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/blog\/what-are-the-kyc-procedures-for-merchant-onboarding\/\">customer\u2019s KYC<\/a> <\/mark><\/strong>with the issuer bank is complete.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>How do banks make money on co-branded cards?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To pass on the rewards and benefits to the customers, banks <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><a href=\"https:\/\/www.cashfree.com\/blog\/cashgram-premium-advanced-features\/\">pay premiums<\/a><\/mark><\/strong> to the co-branding partners. While the banks earn by charging fees on the co-branded cards such as reward redemption fees, cash advance fees, and cash processing fees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the last two-three years, India&#8217;s co-branded credit card market has increased. Co-branded cards have been one of the most popular products to increase customer gratification.&nbsp; While customers like rewards, discounts, and cash back, co-branding partners and issuers can scale their businesses. So, how do co-branded cards work? So, what are co-branded cards and how<\/p>\n","protected":false},"author":17,"featured_media":13701,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1,1525],"tags":[1499,4802,1522],"class_list":["post-13695","post","type-post","status-publish","format-standard","has-post-thumbnail","category-all","category-banking","tag-banking-as-a-service","tag-card-issuance","tag-cashfree-payments"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are Co- branded cards? 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