AU Small Finance Bank (AU SFB), India's largest small finance bank, has announced a strategic partnership with Zaggle Prepaid Ocean Services Limited, a leading spend management company, to launch co-branded retail credit and prepaid cards. This collaboration aims to revolutionize the banking experience for both retail and corporate customers.

Retail Credit Cards: Smart Spending and Easy Rewards

The partnership introduces a new retail credit card equipped with Third-Party Application Provider (TPAP) integration and a personalized recommendation engine. This innovative card focuses on:

• Smart spending tips
• Easy-to-earn rewards
• Tech-enabled convenience

The goal is to make everyday spending more rewarding and effortless for customers.

Commercial Credit Card Portfolio

AU SFB and Zaggle will expand their partnership to develop a comprehensive commercial credit card portfolio. This initiative combines:

• AU SFB's underwriting expertise
• Zaggle's extensive enterprise network

Corporate customers will gain access to Zatix, Zaggle's centralized SaaS platform, providing real-time visibility, control, and actionable insights into corporate spending.

Co-branded Prepaid Cards for Corporate Clients

The partnership also introduces a co-branded prepaid card program for corporate customers, offering:

• Tax-saving benefits through multiple wallets (fuel, meals, gifts)
• Expense and reimbursement tracking
• Support through the Zaggle mobile app

Expanding Reach and Services

As part of the collaboration:

• Zaggle will introduce AU SFB to its southern regional corporate network as a primary banking franchise
• The partnership aims to deliver innovative, technology-led payment solutions for both retail and corporate customers

Key Highlights

• Retail Credit Cards with TPAP integration and AI-powered recommendation engine
• Corporate Credit Cards supported by Zaggle's enterprise acquisition and Zatix SaaS platform
• Multi-Wallet Prepaid Cards for tax savings, fully managed via the Zaggle app
• Zaggle SAVE to automate employee expense reporting and reimbursements

Company Profiles

AU Small Finance Bank

AU Small Finance Bank recently received in-principle approval from RBI to transition to a Universal Bank.

Zaggle

Dr. Raj P Narayanam, Founder & Executive Chairman of Zaggle, expressed excitement about the partnership, emphasizing the delivery of innovative, technology-led payment solutions. Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, highlighted the alignment of this partnership with their vision of empowering businesses and consumers through smarter financial solutions.

This strategic alliance between AU Small Finance Bank and Zaggle is set to create a powerful suite of financial products and platforms, tailored for India's dynamic consumer and corporate ecosystem.

AU Small Finance Bank has made a significant move in the digital banking space with the launch of its new AU KOSMO Credit Card. This innovative product, developed in partnership with Kiwi, a Credit on UPI platform, brings the convenience of UPI payments to credit card users.

Key Features of AU KOSMO Credit Card

The AU KOSMO Credit Card, built on the RuPay network, offers a unique proposition to customers:

• UPI Integration: Users can make credit payments via UPI at both online and offline merchants without the need for a physical card.
• Rewards on UPI Payments: The card offers rewards for transactions made through UPI, encouraging digital payments.
• Fuel Surcharge Waiver: Cardholders enjoy a 1% fuel surcharge waiver, providing savings on fuel purchases.
• No Annual or Renewal Fees: The card comes with no annual or renewal fees, making it an attractive option for cost-conscious consumers.

Target Audience and Onboarding

AU Small Finance Bank is positioning the AU KOSMO Credit Card to appeal to:

• First-time credit users
• Young professionals
• Tech-savvy consumers

The bank has implemented a digital onboarding process, aligning with the preferences of its target demographic and streamlining the user experience.

Market Context

The launch of the AU KOSMO Credit Card comes at a time of significant growth in the UPI and RuPay ecosystems:

• UPI P2M (Person to Merchant) payments reached ₹7.20 lakh crore in August, marking a 26% year-over-year increase.
• RuPay's credit card market share has grown to nearly 12%, indicating increasing adoption of the domestic payment network.

AU Small Finance Bank's Market Position

As of June 30, AU Small Finance Bank's financial position and reach include:

• Over 2,500 banking touchpoints across 21 states and four union territories
• Total deposits of ₹1.27 lakh crore
• Loan portfolio of ₹1.17 lakh crore

Strategic Implications

The introduction of the AU KOSMO Credit Card aligns with AU Small Finance Bank's broader strategy of financial inclusion. By combining credit card functionality with the widely-used UPI platform, the bank aims to expand its services across urban, semi-urban, and rural markets.

This move could potentially increase the bank's customer base, particularly among younger and more tech-savvy demographics, while also contributing to the growth of digital payments in India. The absence of physical cards may also lead to reduced operational costs for the bank in terms of card production and distribution.

As the digital payments landscape in India continues to evolve, products like the AU KOSMO Credit Card represent an important convergence of traditional credit services with modern payment technologies, potentially setting a trend for other banks to follow.