Petal is a fintech startup to follow if you are hungry for brands using sophisticated design and unconventional approaches to positioning their product.
The brave startup has taken on an industry with a bad reputation – credit. Which means dislocating the visual experience is key, from the brand experience, right the way through to the product itself. This can’t feel like credit. It has to be credit, but feel like something else.
Like Starling Bank, Petal’s vertical credit card is a deceptively simple differentiator that shows the power of looking at something afresh, through a design first lens. In addition, the clever positioning of the card-holders name echoes the move towards personalised and monogrammed accessories amongst the insta-first generation.
The fintech startup, which uses ‘cashflow underwriting’ to score and set its customers credit limits, announced it had secured a $34M credit facility this week. American Banker’s catchy headline about the launch of the card to the masses – Startup lender Petal launches its subprime credit card – certainly made us chuckle. Not exactly the headline you’d like to see about your business, and somewhat of a slight on companies like Petal’s mission.
The reality is tens of millions of Americans don’t have credit scores, because they’ve either eschewed credit altogether (this is prevalent in younger demographics) or the systems designed to capture and record their ‘scores’ are hugely deficient. Many old bureaus have woefully inadequate technology and scoring algorithms, especially in the age of big data. That is a goldmine of opportunity for the right risk adjusted system.
So who else is in this space worth watching?
Keep your eyes on Deserve, another competitor in the space. Not quite up there in the branding stakes like Petal, but building a similar proposition.
Petal is smart. You don’t need to invent something new to be successful. Sometimes rearranging the furniture works just as well.
The key is obviously making sure the business growth incentives are aligned with the customer. Currently Petal makes money from interest charges, a typical approach – although it is fee free in every other regard. However in our debt fuelled economy, let’s just hope this isn’t a case of rearranging the deckchairs on the Titanic.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.