Petal announced intention to expand its credit card program.
The fintech company announced this plan after receiving credit funds in the amount of $200 million. This financing was provided by the investment firm Victory Park Capital. The relevant information is contained in the press release of the fintech company, which was published last Thursday, August 3.
The firm said that the implementation of this intention will allow achieve the goal of issuing cards to those consumers who are new to the field of lending. This solution is beneficial to customers because it does not imply the need for credit points to qualify.
The company’s press release contains information that about 400 thousand consumers currently have approval for the use of Petal credit cards. Separately, the firm noted that more than 100 thousand means of payment were approved last year.
Jason Rosen, co-founder, and CEO of Petal, says that in the foreseeable future in the United States, every consumer will be able to use their banking history in order to qualify for financial services of a new format and a higher level of quality. He noted that for his company, the implementation of this scenario means the opportunity to expand the availability of credit to reach a consumer audience of millions of people who did not have access to acceptable services and were out of the spotlight of financial institutions.
Experts say that traditional methods of determining credit risk and providing funds as a practice of action limit the rights of many potential customers. As a result of this situation, various platforms and alternative data sources have appeared in the space of traditional financial services that meet the needs of those to whom banks with a standard concept of activity are accustomed to ignoring.
In the USA, an industry study was conducted, according to which it turned out that 25% of consumers were refused at least once when applying for credit funds. It was also found that many of those who unwillingly fell into the category of so-called credit marginals, with a high degree of probability, will not resume attempts to obtain these services. At the same time, 26% of respondents stated that they do not apply for a loan due to low credit scores. Another 21% of respondents say that they are afraid of being rejected and for this reason, do not make any attempts to obtain services in the field of lending.
In the case of credit marginals, a kind of vicious circle is formed. Initially, they receive a negative response to a loan request, as a result of which they lose the opportunity to replenish points, which then becomes the reason for another refusal.
Petal’s new debt program came three months after the company received new financing and spun off its Prism Data business, creating two fintech firms that use open banking data to expand access to services for consumers who do not have accurate credit ratings.
Prism Data, a Petal subsidiary that specializes in data transmission infrastructure and business process analytics (B2B), offers cash flow underwriting technology to financial institutions, fintech, and other businesses.
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