Jupiter Select #3: Optimizing Spends & Earning Rewards Masterclass by Vibhor, Founder of Donut

1. How has the rewards Ecosystem shaped up in India?

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2. What formulates the rewards industry?

Purpose of Rewards:

  1. Brands: Acquire and Retain users
  2. Reward Companies: Get a share of the Deal
  3. Bank: Increase spend of the user, give more credit to the user
  4. User: Intends to save money

3. What are the problems in the rewards industry?

4. Can you throw some light on Donut’s journey?

In India, people have a lot of finances: credit cards, debit cards, e-wallets etc. I wanted to cater to this problem and bring out one card for all finances. While working on this we realised the reason people have multiple cards is that each option offers different rewards and if this can be centralised the former problem also can be solved, so we pivoted to a rewards company.

5. Can you explain how the user is missing out on rewards by an example?

The power of compounding is underrated. Users use what is available at hand and most of them are unaware that 2 different types of rewards can be coupled together.

The bank applications have a very poor and complicated UX when it comes to viewing or redeeming rewards as their incentives are not aligned for redemption.
For Eg: I have a Yes Bank card and their rewards are listed in a PDF hidden in someplace in the website containing 3k+ Dining merchants and I have to use ctrl + F to be able to view it.

Talking about Dining offers, we always don’t need to buy a Zomato Gold as our bank usually has tie-ups with a lot of restaurants that get a healthy chunk of discount. So one must calculate if its needed to bear the cost of the Zomato Gold card or not

6. How are you at Donut solving user problems?

  1. There are various kinds of offers going on giving different rewards.
  2. Rewards change almost every week
  3. There are different Permutations and Combinations to rewards
  4. It takes a lot of time to hunt the right deals

Donut helps users overcome all these problems by suggesting the most efficient rewards.

7. What is Donut’s Business Model?

It’s really simple. We get money from Brands when you buy from them by using deals on our platform. We try to give maximum to the user here.
Next is the money we achieve from the Card Interchange.

In simple words, if the user makes more money, we make more money.

8. Any Festive season advise for accomplishing more rewards?

  1. Choose your cards wisely. Align them with your expenses.
  2. Go for an HDFC card and utilise the smart buy service.
  3. Affiliate is the Easiest way to save money.
  4. Buy a gift card out of all your reward points and enjoy the discounts.

9. Why are UPI rewards unsustainable?

It makes sense for credit Card Companies to offer rewards as they earn when the user spends. However, when rewards are offered (let’s say a scratch card) for UPI payments, the company is spending money on the reward and not earning.

10. Why does the redemption of CC rewards be lesser in cash and more into Brand Offering?

So here we need to view that who is funding these offers.

When the bank converts the reward points into cash, it has to spend extra to benefit the user whereas in case of a brand offering the bank alone doesn’t spend as its distributed between the Brand and the Bank thereby reducing its cost and amplifying the benefits.

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