SBI Cards has the highest number of co-brand partnerships (18) and these cards comprise one third of its card additions. Co-branded cards are issued in conjunction with consumer-facing partners with strong and loyal customer bases. Marquee co-brand partners include the likes of Air India, IRCTC, Apollo, OLA, Yatra, and BPCL.
The value offerings of these cards are designed to address specific needs of customers and increase stickiness. It also serves to enhance the brand strength of SBI Cards by partnering with strong brands and allows access to a
captive customer base of the brand partner.
How Co-Branded Partner from the Partnership?
They earn a negotiated sourcing fee – depending on the relative strength of brand and what they get out of the transaction. if we consider the case of e-tailers Amazon and Flipkart are strong brands and, banks like ICICI Bank and Axis Bank are likely to incur large upfront / ongoing costs to secure co-brand deals. SBI partners like Yatra.com, IRCTC, HPCL etc. are willing to pitch in for additional reward costs. This is because the additional reward points are earned and can be redeemed only at the partner’s store / platform. This increases the partners’ customer stickiness and ensures repeat business in an otherwise commoditized industry
What is in it for SBI Cards ?
SBI Cards gets access to the partner’s large customer base that they can issue cards to. Despite the fees, it is a significantly cheaper option than open-market sourcing of cards. It is however, more expensive than issuing cards to internal customers of the parent bank.
And finally, Customers earn higher reward points and get special offers at partner merchants. Co-brand cardholders get brand loyalty points, discounts or unique value-added benefits the more they transact with the co-brand partner with the co-branded card.
How SBI Card Procures customers from SBI Ltd ?
It is cheaper to source customers from within the existing banking relationships. SBI and SBI Cards are separate legal entities, there can be no direct data sharing between the two unless an explicit consent from the customer is in place. Profiling is done on customer databases to short-list potential card holders. This short list then goes through a CIBIL scrub, where CIBIL trims it further based on criteria provided by SBI Cards. Credit filter criteria include things like debit card POS activity rates, average CASA balances, other savings in MFs / insurance sold through SBI, customer age, income levels, bureau scores, geography, corporate salary accounts and also negative filters such as numerous credit card inquiries, maxed out existing cards, very high credit utilization rates etc.