debuted a banking platform and credit card to help newcomers grow their credit

  • US fintech debuted a banking platform and credit card to help banking newcomers and younger consumers grow their credit.
  • And some high-profile competition in credit improvement products could be a headwind to adoption for's offering.
  • Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry with the Banking Briefing. You can learn more about subscribing here.'s mobile platform is aimed at banking newcomers and younger consumers distrustful of the financial system, CNBC reports. Its metal credit card dubbed Unicorn Card and a connected app launched in beta on August 6, with applications expected to open to all consumers in the fall.

The card comes without fees or interest and boasts an algorithm-based Credit Optimizer tool designed to help customers rapidly improve their credit. However, it doesn't carry traditional rewards like points or cash back. High-profile competition in credit improvement products could be a headwind to adoption for's offering. At the end of June, Apple rolled out its Path to Apple Card credit building program for applicants who were denied access to the card.

The four-month program guides prospective customers toward improving specific financial markers that could help them get approved on a subsequent attempt. And US neobank Chime released a credit builder card at the same time that functions similarly to a debit card: Users transfer a set amount of funds to a Credit Builder Secured Account and can charge up to that amount — the balance is then automatically paid off on time. As these offerings become more common, it may be difficult for a new entrant like to generate sufficient buzz to drive sign-ups.

Even if can drive customer acquisition, it could struggle with long-term retention unless it diversifies its offerings. Because Unicorn Card comes with relatively few rewards, its primary value proposition will likely be its credit-building capabilities. And while this could prove alluring to prospective customers who need help with their credit, once they have improved their credit scores and can qualify for popular reward-bearing offerings from other providers, they may opt to abandon their accounts in favor of more perks.

The fintech could preempt this risk by expanding its offerings to include loans or more premium credit cards that existing customers can transition into after they have built up their credit. It already appears to be on track for such expansion, as lead investor and cofounder David Adelman told CNBC that he envisions going "into other verticals" and sees opportunities including rent and mortgage applications on the platform as it grows.

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