TomoCredit is the brainchild of Kristy Kim and was originally launched to make it easier for international students to obtain credit. Now, more than three years later, the brand hopes to help all young adults who are in good financial health but without a credit score.
The main difference between Tomo and other credit offerings out there is that it doesn't rely on FICO scores to underwrite. By applying a "proprietary" underwriting algorithm (Tomo Score), it identifies "high potential borrowers" without a credit score. Credit checks are not required, deposits are not required, and no fees are charged with the TomoCredit card. The fintech offers cardholders credit limits up to $30,000 based on their cash flow. The system makes its money only off of interchange fees charged to merchants, not off consumers directly.
"As we are getting bigger, we are realizing that the target market we can address is way bigger than what we were expecting. We now know that the credit invisible goes way beyond immigrants," CEO Kim told TechCrunch in an interview.
Fintech Credit Card Platforms
TomoCredit Aims to Make Credit Scores "obsolete"
Trend Themes
1. Alternative Credit Scoring - The development and deployment of non-traditional methods for assessing creditworthiness.
2. Disruptive Fintech - Fintechs offering innovative and alternative financial services, such as TomoCredit, which challenges traditional credit offerings.
3. Merchant Revenue-sharing - The model of revenue-sharing between fintech credit card providers and merchants, such as in TomoCredit's interchange fee-based system.
Industry Implications
1. Fintech - The industry for companies that provide innovative financial products and services, such as TomoCredit's proprietary underwriting algorithm.
2. Consumer Credit - The industry for financial services that offer credit to consumers, such as TomoCredit's credit card offerings to those without credit scores.
3. Retail - The industry for businesses that sell goods and services to customers and can benefit from revenue-sharing models with fintech credit card providers, such as in TomoCredit's business model.