India’s co-branded credit cards proposition may appear straightforward at first glance. Take a popular consumer brand, attach it to a bank-issued credit card, add cashbacks or reward points, and call it loyalty. In reality, it is far more complex. Banks and co-brand partners, in search of new users and sustained engagement, are attempting to accelerate credit card circulation and usage in India. The assumption is that sharper rewards on transactions will spark loyalty. A critical question now confronts the ecosystem — are banks and platforms or partners including telecom, hospitality, retail, airlines and payment platforms, merely collecting users in hope that loyalty will follow, or is there a deeper strategy at work?
Arnika Dixit, President & Head – Cards, Payments and Wealth Management, Axis Bank, believes a fundamental shift is underway, with focus now on “retaining high-quality, high-frequency users who integrate their cards into daily digital habits.” Cashbacks may attract users in early stages, Dixit argues, but real value lies in making a card indispensable to everyday spending. Axis Bank’s current co-branded portfolio reflects this thinking, with partnerships spanning Airtel, Flipkart, and Indian Oil — ecosystems that sit squarely within daily consumption patterns.
Numbers underscore both an opportunity and a challenge. Reserve Bank of India (RBI) Database on Indian Economy data indicates Indians did 518.29 million (that’s around 51.82 crore) card transactions in October 2025 to the tune of ₹2,14,230 crore in value, just short of the record ₹2,16,707 a month earlier.
India has around 111.6 million active credit cards in circulation, and faces strong competition from UPI, or the unified payments interface. The National Payments Corporation of India (NPCI) data recorded 20,700.92 million transactions to a value of ₹27,27,790.68 in the same month.
Dixit believes that in the next five years, co-branded cards are expected to potentially account for 25-30% of new card issuances, as banks tap into large, digitally engaged platforms.
Salila Pande, MD and CEO of SBI Card, echoes this view. “The evolution of India’s digital payment ecosystem is creating a powerful growth platform for the credit card industry, driven by increasing digital adoption, growing middle class, and rising aspirations. Within this landscape, co-brand partnerships play a significant role in strengthening business fundamentals by aiding new account acquisition, driving higher customer engagement, incentivising spends in key categories, while influencing brand loyalty,” she tells HT.
SBI Card has leaned heavily into this strategy, with partnerships including Flipkart, Indigo, Tata Neu, PhonePe, Bharat Petroleum, IRCTC, and Singapore Airlines.
Ravindra Rai, MD & CEO of BOBCARD LIMITED, insists that the co-branded card model is suitable for India because the market is still expanding. BOBCARD recently announced a partnership with Etihad, with two cards catering to an audience that would prefer to earn airline loyalty miles in return for their credit card spends.
“These partnerships allow banks to scale faster by leveraging trusted consumer ecosystems, while partner brands deepen loyalty through simple, everyday value propositions such as cashback or merchant-led rewards. Unlike mature markets where co-brands reinforce loyalty within an already carded population, India’s co-branded cards often serve as an entry point for first-time credit users,” Rai tells HT, pointing to this being a long-term strategy aligned with financial inclusion and market expansion.
That logic appears to be playing out. Tata Digital’s super app Neu and HDFC Bank, earlier in 2025 announced that they’d surpassed the milestone of 2 million cards issued. “It is our endeavour to create a customised offering for every customer segment, providing best-in-class payment solutions,” said Parag Rao, Country Head – Payments, Liability Products, Consumer Finance and Marketing at HDFC Bank, at the time.
Even so, India still trails far behind global peers in card penetration. The United States has over 827 million active credit cards, China around 707 million, and Japan approximately 320 million. HDFC Bank (25.64 million cards issued), followed by SBI Card (21.74 million), ICICI Bank (18.58 million) and Axis Bank (15.57 million) are the biggest card issuers in the country.
Tackling scale and longevity questions
The scale that will eventually underline India’s credit evolution in the coming years, is something no one financial institution can shoulder alone, says Sharath Bulusu, who is Senior Director for Product Management for Google Pay. “No single player will solve it because nobody’s got a balance sheet big enough to serve the credit needs of India. Not even the biggest bank in the country has that. It is going to require bringing a lot of players,” he explains.
Google, reflective of this thinking, has rolled out its first credit card called Google Pay Flex Axis Bank Credit Card.
India’s fintech and startups too are doubling down. CRED has partnered with IndusInd Bank, while PhonePe underlines its aggressive approach with four credit cards, two each co-partnered with HDFC Bank and SBI Card, though approvals for latter’s credit cards have been notoriously difficult in recent times. PhonePe is also partnering with MasterCard to allow in-store payments by tapping NFC-enabled smartphones at payment terminals using the PhonePe app.
“We have always been committed to simplifying financial services and making them accessible to all Indians. We are constructing the infrastructure for a more inclusive credit landscape in India,” said Sameer Nigam, Co-founder & CEO at PhonePe, announcing the partnership with SBI Card.
Some partnerships have delivered clear results. Tata Neu’s alliances with HDFC Bank and SBI Card, the Amazon Pay ICICI Bank credit card, and Bharti Airtel’s cashback-led Axis Bank card, have significant traction. Others have stumbled. IndusInd Bank’s devaluation of benefits on its EazyDiner credit card last year, served as a reminder that loyalty funded purely through rewards can be fragile and costly — misuse by users too.
Kapil Chopra, Founder of EazyDiner, a platform for restaurant reservations, points out that “When you cheat, card privileges are downgraded and genuine users suffer. 1% gain and 99% lose.” This is something banks must be wary of.
That brings the debate to a pertinent question — as acquisition costs rise and rewards inflation sets in, which elements of co-branded cards are expected to drive long-term stickiness?
For Axis Bank’s Dixit, the answer lies in data-led personalisation and ecosystem integration, key to converting occasional spenders into loyal users. “Pure financial incentives are no longer enough. Ecosystem integration and data-driven personalisation are becoming real levers for stickiness. Differentiation lies in making cards indispensable through everyday use cases such as subscriptions, wallet reloads, telecom, travel, and e-commerce, creating habitual usage and switching friction,” she says.
BOBCARD LIMITED’s Rai believes durability depends on restraint. “Co-branded cards anchored in clear, repeatable value propositions rather than escalating rewards are more likely to remain durable and profitable over time,” he says. Over the next five years, he expects banks and partners to focus on onboarding first-time credit users through trusted ecosystems, positioning co-branded cards not as niche loyalty tools but as on-ramps to formal credit.
As India’s credit market matures, co-branded cards are evolving from promotional tools into strategic distribution rails for formal credit. In a UPI-dominated economy, that distinction may ultimately determine which partnerships endure—and which quietly fade away.
