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Driven by India’s booming economy and shifting consumer preferences, co-branded credit cards (CBCCs) are projected to grow at the 35-40 per cent compound annual growth rate (CAGR), outpacing the traditional plastic money by two times in FY28, a report said on Tuesday. 

As consumers seek personalised financial products, co-branded credit cards have emerged as a key driver of engagement, offering tailored rewards and exclusive benefits through strategic partnerships between banks and brands.

The report by Redseer Strategy Consultants highlighted that in FY24, CBCCs accounted for 12-15 per cent of total credit cards, with projections showing this share could exceed 25 per cent by FY28.

This growth trajectory is twice as fast as that of traditional credit cards, according to the report, in collaboration with Hyperface.

“Co-branded cards have evolved from travel rewards to essential industry drivers, offering tailored value propositions that meet consumer needs and fostering loyalty through multiple card options”, said Praveena Rai, COO, the National Payments Corporation of India (NPCI).

E-commerce dominates the CBCC landscape, commanding 75-80 per cent of all issued cards. Following e-commerce, the travel sector holds an 8-10 per cent market share, while the dining and entertainment sectors represent 3-5 per cent of co-branded cards. This success is largely driven by cashback offers and loyalty points programmes.

Survey insights revealed that 65 per cent of key decision makers believe launching a co-branded credit card is a powerful tool for increasing customer loyalty.

As CBCCs gain traction, “they are poised to become a dominant force in the financial ecosystem. With continued growth projections and the evolving role of technology, CBCCs will enable brands to deliver more personalized, engaging, and rewarding experiences, shaping the future of financial products in India," explained Jasbir S Juneja, Partner, Redseer.

Credit cards have undergone a significant transformation, driven largely by the innovations of Credit Card as a Service (CCaaS) platforms.