Went thrugh the DRHP, it mentions that their revenue stream comes from both the issuers and banks
given this data point, my hypothesis is this:
- Cards networks (Visa, Master) provides these services to the issuers (HDFC, ICICI) to be then given to their customers, based on the card tier that the customer belongs to
- Banks can also tie-up with DFS and customize their offerings for the customers
So there might be increasing incidences of large banks going and tying up with DFS, where as the smaller ones will go through the partnerships of Visa and the likes
What point 1 might also imply and also explain their higher ARs and APs; they raise invoices to their partners on a monthly basis (mentioned by the management), the partner if its a bank, would process the payment say in a 30-60 days cycle [so total 90days], and when the txn happens through the networks, one can add another 30 days in the chain [so total 120 days]. This is a pure connecting the dots and might be wrong, request the member to correct/provide inputs if I am missing anything.
This also seems correct, in the Q2 concall, they had given their realizations by domestic and international transactions, which was ~840 domestic and ~1300 for international; given Priority Pass/Premium Plaza lounges dominates the international scene more, it is likely that at the premium end PP would be dominating the scene and DFS would be more domestic, which is also reflected by their 68% market share, though they mention that they have 90-95% marketshare in CCs which are 80-85% of the txn volume
Disclosure: No position, just trying to understand the business
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