“Metal bank cards have a feel-good issue. For lengthy, OneCard’s USP (distinctive promoting level) was that it’s an entry degree card in steel kind, a primary of its sort,” stated Kashif Ansari, assistant professor at Jindal School of banking and finance, O P Jindal Global University .
Three years on, the noise has died down as a result of its reward fee and low cost provides, essentially the most enticing options of a bank card, pale compared to different cashback playing cards available in the market.
OneCard earns one reward level (RP) on each ₹50 spent. The worth of 1 RP on redemption is ₹0.10. As a part of the cardboard’s accelerated reward programme, the cardholder will earn 5X rewards on prime two spend classes in a month. This is relevant when the cardholder spends on at the least three completely different classes in a month, so the app picks the 2 highest spend classes and awards accelerated factors on these. For occasion, in case you paid ₹5,000, ₹8,000 and ₹6,000 in direction of groceries, gasoline and on-line procuring, respectively, in a month, you’ll qualify for 5X rewards on gasoline and on-line procuring. However, in case you pay for groceries and gasoline alone the subsequent month, you’ll not be eligible for accelerated rewards because you didn’t pay for a 3rd class..
The base reward fee on OneCard is abysmally low at 0.2%. In comparability, entry degree playing cards comparable to SBI cashback card and ICICI Amazon Pay card supply 1-5% base reward fee.
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Apart from incomes rewards on spends, OneCard additionally sometimes provides 5-20% on the spot reductions on on-line procuring, meals supply platforms, journey reserving websites, and many others. These provides might be discovered on the OneCard cellular app. Yet, Sumanta Mandal, founder, TechnoFino, stated OneCard’s model tie-ups aren’t as large as banks. “ICICI has the widest community of brand name tie-ups, so ICICI Amazon Pay playing cards supply the very best reductions and different advantages on on-line procuring. OneCard provides profitable offers throughout competition gross sales,” he stated.
FPL Tech provides OneCard in collaboration with Federal Bank, South India Bank, CSB Bank and BOB Financial.
Is it price having one?
Ansari stated OneCard is appropriate for freshmen whose bank card purposes are rejected by banks. “OneCard has low entry limitations. People with low cibil scores additionally get accepted. Those and not using a Cibil historical past can simply get it towards an FD,” he stated.
Another upside, although minor, is that it instantly earns rewards on classes like utilities, gasoline, charges, insurance coverage premiums, and many others, which some sought-after entry degree playing cards, like SBI cashback and ICICI Amazon Pay card, don’t permit. With these playing cards, the workaround is to purchase Amazon or Flipkart vouchers and pay for exempted classes by means of these.
The greatest draw is that you simply get to personal a steel card with out big annual charges. However, the draw back is that it has an costly re-issuance charge of ₹3,000 (items and providers tax is additional) in case you lose the cardboard or injury it. “My steel OneCard has gotten broken twice already. One can nonetheless use it for on-line transactions however not for funds on POS terminals. You can get a plastic card as a alternative at a decrease charge,” stated Mandal.
The firm touts a low foreign exchange mark-up of 1% on international transactions. But, Mandal warns towards transacting abroad with OneCard due to the corporate’s poor customer support. “OneCard’s customer support is just not good so you could not get decision to your grievances in case you increase a dispute. For worldwide transactions, it’s secure to transact with a financial institution bank card,” he stated.
Mint independently checked a number of bank card group boards the place individuals raised comparable issues concerning the firm’s unresponsive buyer care service.
The financials
FPL Technologies’ losses widened to ₹182.8 crore in FY22, from ₹33.2 crore in FY21, as per their filings with MCA. The widening losses are attributed to the rise in advertising and marketing bills, amongst others. OneCard spent over ₹124 crore on promotional bills in FY22 towards ₹11.8 crore in FY21.
It is troublesome for a fintech firm to construct a sustainable bank card product that gives a good reward fee as a result of it doesn’t have deep pockets like banks and has restricted avenues to make cash. “Fintechs can solely earn from MDR and curiosity on defaults. A fintech can by no means compete with banks, which additionally earns from cross-selling different merchandise,” stated Ansari.
OneCard didn’t reply to Mint’s question on its person base and the variety of energetic playing cards presently.