California Startup Looking to Revolutionize Access to Credit Cards
- December 7, 2017
- Posted by: Mike Brown
- Category: Credit Card News
Deserve, a Menlo Park, California based startup, formally known as SelfServe, introduced a new credit card focused on students and immigrants. According to Deserve, the mission of this credit card is to put more people on the road to financial freedom in America.
Just recently, the company announced raising $12 million in funding to help them reach their goal. The move was directed by Accel and contributions were received from Pelion Ventures, GDP Venture, Aspect Ventures, Alumni Venture Group, as well as Mission Holdings.
Approximately 44 percent of students do not own a credit card according to a survey presented by Sallie Mae. According to the Consumer Financial Protection Bureau or CFPB, about 26 million individuals were credit invisible in the United States. Of those 26 million, almost 10 million of them are between the ages of 18 and 24.
Most credit card options are not available to those in the Generation Z, where FICO is heavily relied upon. However, instead of relying solely on FICO to determine creditworthiness, Deserve claims to utilize machine learning.
Deserve aims to implement an underwriting process with its algorithm by using current qualities such as financial outlook, education, and potential employability. With this new model, Deserve wants to help individuals in their first step to building credit. Deserves CEO, Kalpesh Kapadia stated that the credit card industry is “stuck in the past.”
This new model isn’t just going to help young consumers either.
Immigrants fall into a challenging time trying to establish credit as well. For those who wish to establish credit with the traditional method, an applicant is required to provide a social security number. Prior to receiving a social security card, an immigrant must first have the authorization to be employed in the America. However, Deserve offers a way to use alternative data to determine creditworthiness.
Drawing from personal experience, CEO Kapadia understands this hardship. In 1995, as an immigrant to the United States, one tool that was not available to him was credit.
Kapadia stated, “This is why I wanted to implement technology that rethinks the process for offering access to fair and simple credit. Deserve represents that mission.”
Here’s more background about Deserve’s new product.
The Deserve Edu Card, the new product by Deserve, focuses on students, both domestic and international. An applicant is not required to provide a social security number to be approved. However, card holders might be able to build credit using the card which is supposedly reported to all three major credit bureaus.