Co-branded Card Operation Project Report: Industry Trends, Operations Setup, Service Standards, Investment Opportunities, Revenue and Margins

Note: The regulatory items below outline the typical compliance architecture for this project type. Specific BIS / IS standard numbers, licence thresholds, GST HSN codes, and scheme rates referenced should be verified with the issuing authority (see References & primary sources at the bottom of this page). KAMRIT's compliance team confirms each item against current notifications during project engagement.

Co-branded card operation setup is lighter on plant-level approvals but heavier on professional registrations and local trade licences. For ₹2.1 crore - ₹29 crore CapEx, here is what this project needs:

• MSME Udyam registration, Stand-Up India / PMEGP / MUDRA eligibility
• For multi-outlet brands: franchise agreement, FDI compliance, trademark registration
• Trade Licence from the local municipal corporation plus signage and fire NOC
• GST registration above ₹20 lakh (services) / ₹40 lakh (goods) turnover
• Shops & Commercial Establishments Act registration with the state labour department
• Profession-specific council registration (ICAI, ICSI, BCI, MCI as applicable)

KAMRIT files and tracks every one of these approvals end-to-end in the Tier 3 Execution Partnership, including dossier preparation, regulator interaction, fee remittance, and the renewal calendar through year three of operations.

<p>The co-branded card sector in India spans multiple verticals, each with distinct partnership structures and customer engagement mechanics. The e-commerce sector leads in portfolio scale, with Amazon-ICICI Bank's co-branded card exceeding 5 million issued cards and Flipkart-Axis Bank's partnership crossing 3.5 million cards. These digital-native programs leverage the transactional density of online marketplaces to drive frequent card usage and high spend velocity.

The travel and airline vertical is exemplified by the IRCTC SBI Card, one of SBI Card's flagship products, which capitalizes on the Indian railway network's massive passenger volume. The IRCTC SBI Card alone has been a cornerstone of SBI Card's 19% to 20% market share position in the Indian credit card market. The retail and lifestyle segment is represented by the Tata Neu-HDFC Bank co-branded card, which has surpassed 2 million cards by integrating the Tata Group's broad consumer ecosystem spanning consumer electronics, retail, and digital services.

This card builds on the Tata Neu super-app strategy to create a closed-loop rewards environment.</p><p>The payments and fintech vertical has also emerged as a dynamic category, highlighted by POP's August 2024 launch of India's first multi-brand co-branded credit card, the YES BANK POP-CLUB RuPay Credit Card. This innovative program integrates merchants spanning Zomato, Blinkit, Cult, Rapido, Cleartrip, and PharmEasy into a single card rewards structure, representing a departure from traditional single-brand co-branding toward portfolio-based loyalty aggregation. Tiger FinTech, a subsidiary that partnered with IndusInd Bank in 2023, represents another fintech-enabled approach to co-branded card distribution.

The retail payment services sector captured 12% of global retail sales through co-branded card partnerships in 2025, demonstrating the commercial leverage these programs provide to merchant partners. While 65% of traditional credit card penetration remains concentrated in Tier-1 cities, high regional demand growth clusters are emerging in Tier-2 and Tier-3 cities, driven by digital payment adoption and expanding merchant acceptance infrastructure.</p>

Project-specific demand drivers

• RBI regulatory clarity
• Account Aggregator framework
• UPI dominance and platform play
• AIF and PMS premiumisation
• BNPL adoption in retail

<p>Technological infrastructure underpins every layer of modern co-branded card operations, from card manufacturing and EMV chip integration to digital onboarding and rewards platform automation. In the physical card production domain, India hosts capable manufacturers such as Manipal Technologies Limited (MCT Cards and Technology), which established its Plastic Cards Division in 2008 and operates an 85,000 square foot facility with a rated capacity of 300,000 cards per day, certified for Visa, MasterCard, RuPay EMV and DI cards, and SCOSTA standards. Seshaasai Business Forms Pvt.

Ltd. represents another significant player with a production capacity of 11.4 million cards per month, offering PVC-based card solutions. The manufacturing process chain encompasses plastic compounding using raw materials including Polyvinyl Chloride (PVC), Polyethylene Terephthalate (PET), Polycarbonate (PC), and PETG core stock sheets, combined with embedded EMV microprocessors, magnetic stripes, RF/NFC antennas, metallic foils, and security inks. Key manufacturing processes include offset and digital printing, lamination, die-cutting, EMV chip module bonding, and magnetic stripe encoding.

Capital expenditure for a mid-size card manufacturing facility ranges from USD 5 million to USD 25 million for core machinery, automated systems, and secure infrastructure.</p><p>Digital channel technology has been a transformative force in co-branded card operations. Digital channels reduced account opening cycles from 7 to 10 business days down to 15 minutes for online applicants by 2025, driving a 34% increase in digital card issuance volumes through 2025. Mobile payment transaction volumes exceeded USD 4.2 trillion globally in 2025, and this ecosystem shift has directly benefited co-branded card programs that integrate seamlessly with mobile wallets and payment applications.

Mastercard's 2025 sustainability initiatives illustrate the technology innovation frontier: the company partnered with Reewild to test the PlanetPoints eco-loyalty pilot, achieving an 18.8% reduction in hot meal emissions and a 16.8% drop in average checkout basket emissions over a 6-week trial involving 900 students. Mastercard also accelerated facility investments to transition from natural gas to 100% renewable electricity and enhance infrastructure energy efficiency. Co-branded credit cards represent 62% of consumer credit card offerings according to Javelin Strategy and Research, reflecting the sector's technology-driven dominance in the consumer finance landscape.</p>

The Means of Finance for the co-branded card operation is structured across three tiers aligned to the project CapEx band of ₹2.1 crore to ₹29 crore. For projects at the lower CapEx range of ₹2.1 crore to ₹5 crore, the recommended structure is 70 percent equity from promoters and ₹30 lakh to ₹1 crore under the SIDBI's SAFE (Secure and Fair Fellowship for Enterprises) scheme or CGTMSE-backed term loan from a regional bank such as Bank of Baroda or Punjab National Bank at 8.5 to 9.5 percent ROI. For mid-range projects of ₹5 crore to ₹15 crore, a 60:40 debt-equity split is recommended with ICICI Bank or Axis Bank providing ₹4 crore to ₹8 crore in structured term finance against the card issuing licence and merchant partnership contracts as security, complemented by ₹1 crore to ₹2 crore from the SIDBI's Credit Guarantee Fund for a 75 percent guarantee coverage. For the upper CapEx band of ₹15 crore to ₹29 crore, the structure shifts to 55 percent debt from a consortium led by HDFC Bank or IDBI Bank, with the State Bank of India offering a priority sector lending classification under the bank's MSME retail advance policy; a ₹3 crore to ₹5 crore subordinate debt component from a NBFC investor or private equity limited partner completes the structure. The working capital cycle for a co-branded card operation runs 45 to 60 days, dominated by receivable float from merchant partners and the interchange settlement lag of 2-3 days with Card Networks. A revolving working capital facility of ₹1.5 crore to ₹4 crore with HDFC Bank or IndusInd Bank at MCLR plus 150 basis points is recommended. State government incentives in Karnataka, Maharashtra, and Telangana for fintech operations include stamp duty exemption and electricity duty holiday for data centre infrastructure; Karnataka's Fintech Hub policy provides 20 percent CAPEX subsidy capped at ₹2 crore for approved operations in Bengaluru.

<p>Co-branded card operations face a multi-dimensional risk profile that spans regulatory, credit, operational, and competitive domains. On the regulatory front, the RBI's Master Directions impose stringent compliance obligations that require ongoing monitoring and adaptation. Banks must maintain complete control over credit lines, customer data, and regulatory reporting, while co-branding partners face constraints on data access that limit their ability to leverage transaction intelligence for personalization.

Changes in RBI policy direction, such as potential tightening of co-branding partner data access rules or modifications to interchange fee structures, could materially alter the economics of existing programs. The 18% GST on financial services creates a significant tax burden on program economics, particularly for fee-based revenue streams such as annual fees, joining fees, and processing charges.</p><p>Credit risk management represents a core operational concern. With issuer revenues from co-branded programs projected to grow substantially and new issuance increasingly channeled through co-branded products, the quality of underwriting standards across diverse brand partner audiences becomes critical.

U.S. revolving credit card debt remains above USD 1.3 trillion with elevated average annual percentage rates, illustrating the systemic credit risk that can accumulate in consumer card portfolios. In the Indian context, the average ticket size of INR 3,426 with a 28% year-over-year increase in 2026 signals both growing consumer engagement and potential stress if income growth does not keep pace with spending acceleration. Operational risks include the complexity of managing IT integrations between bank core systems and brand partner platforms, the security requirements for EMV chip and NFC antenna manufacturing, and the cost pressures associated with CapEx requirements of USD 5 million to USD 25 million for mid-size card manufacturing facilities.

Competitive risks are pronounced: co-branded cards account for approximately 33% of new credit card issuances, meaning that market share battles are increasingly fought through co-branding partnerships, and the entry of innovative models such as multi-brand aggregation could disrupt established single-brand exclusive arrangements. Customer acquisition costs (CAC) in the co-branded segment are under pressure as banks seek to reduce DSA dependency while maintaining growth velocity, and any failure to deliver compelling rewards value relative to program costs could trigger customer attrition in a market where brand loyalty is increasingly elastic.</p>