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Spotted: US startup Petal is piloting a new way to provide credit to people with no (or poor) credit histories. Petal isn’t a bank. It partners with WebBank, an online financial services platform. What makes Petal unique is that it uses machine learning to analyse an applicant’s entire financial history to get a more detailed picture of financial behaviour. Using sophisticated data analysis, it looks beyond whether credit card bills were paid on time to assess things like whether rent was paid on time.

The strategy replaces the traditional standard for credit card qualification – the credit score. This allows people who have poor credit histories — or no credit histories at all — to qualify. It gives young people, for example, or immigrants who struggle to transfer their banking histories to the US, a sporting chance. In addition, unlike most credit cards, Petal doesn’t charge fees. Not even late fees.

Petal has captured significant attention from investors. So far, the startup has raised $80 million in equity and debt financing.

The card, which launched in October 2018, offers its clients a line of credit up to $10,000 at an annual percentage rate of 15.24 percent – 26.24 percent.