Too many Americans slip through the cracks of the banking system because they have poor or non-existent credit. For the founding team of Petal–Jason Gross, Andrew Endicott, David Ehrich, and Jack Arenas–figuring out a way to expand credit access for new-to-credit consumers was a driving force in building their business. Their company offers a safe, affordable, no-fee credit card that doesn’t require a credit score. The Petal founders sat down with CFSI to share their company story.
What is the origin story of your company?
Everyone on our team has experienced the frustrations of the credit industry first hand. Petal began in 2016, but the seeds for the idea started much earlier. Years before, we met with a friend who’d come from abroad to study and work in the U.S. He told us about the painful process of obtaining credit. He moved to the U.S. years ago to study and now had started a great job, but he still couldn’t get a credit card or phone plan and struggled to sign a rental lease. It made us think: How many other responsible borrowers have fallen victim to this ‘chicken-or-egg’ approach to approving credit? One of every three Americans can’t get an accurate credit score. On top of that, the system is disproportionately unfair to young people, minorities, immigrants, and low-to-moderate income consumers. Petal is a credit card that does not require a credit score. Our aim is to create new credit solutions for those underserved by the traditional credit scoring system and to transform consumer credit as a tool for financial resiliency.
What has been the biggest challenge you’ve faced in starting your company?
Building a credit card company from scratch requires a lot of ingenuity, resourcefulness, and most of all–patience. We’re a technology company, not a bank, but to offer a credit product, we have to partner with a bank. This, as you can imagine, throws up challenges for everyone. Luckily, our partners–WebBank (issuing bank), VISA (network), and I2C (processor)–are all as excited as we are about expanding credit access to credit-invisible consumers.
What new innovation in fintech are you most excited about?
Technology allows us to even the playing field by giving Americans access to credit that is better, simpler, and more fair. We’re excited about the cash flow underwriting algorithm Petal uses. This allows us to see a customer’s entire financial picture, rather than just a number. This machine learning is able to spot millions of people who are otherwise invisible to banks. It’s exciting to see how this could change credit access forever–not just in credit cards, but for all verticals.
What’s one thing you wish you’d known when you started your company?
Starting a business is emotional. Prioritization is key. There are millions of things to distract you but it’s important to stay focused on your ultimate goal. Make sure you take a step back when you need to make a decision. You want to make the choice that’s right for the company, not just for yourself.
What’s the best business advice you’ve ever gotten?
Hold to your mission. Don’t let perfection get in the way of progress. At the same time, it’s so easy to start chasing things. Step back and be intentional. Don’t try and please everyone. Pick your target market and really understand their needs. And lastly: Invest in good people. Your company is only as good as your team.