EXCLUSIVE – Elevate Credit will launch a new credit card product that targets subprime clients in June, for which the company has teamed up with Mastercard.

“One of the unique things about this card is that, unlike most subprime credit card products whose credit lines tend to be below $500, this one is significantly larger,” Jason Goldberg, general manager at Elevate told Bank Innovation.

For this digital-first credit card, Goldberg explained that Elevate is in talks with a bank on a banking partnership. Goldberg could not name the institution.

The subprime market has seen a burgeoning interest among fintechs and lenders recently.

Take for instance Petal, the fintech that launched a mobile-first credit card last year. Petal, whose card is powered by Visa, caters to the new-to-credit or credit-invisible audience, who many times tend to be mis-classified as subprime since they have little or no credit history. The Petal card starts with a credit line of $500 and goes up to $10,000. The average amount ranges between $2,000 and $3,000.

Clearly, with players like Petal and many others, the sector is garnering attention as an untapped market with a lot of potential. According to Elevate, the market of Americans with low or no-credit scores is as big as 160 million people.

On Elevate’s upcoming launch, Petal CEO Jason Gross told Bank Innovation in an email:

We’re excited to see more innovation in the space, and a growing focus on creating credit products that work for everyone. This is more clear evidence that fintech is coming to reinvent the credit card.

The fundamental innovation in this space rests on underwriting technology, which typically consists of artificial intelligence, machine learning, and APIs.

Goldberg could not disclose much about Elevate’s underwriting system. But for comparison, Petal’s system uses AI and ML, and doesn’t rely on FICO scoring to gauge the credit-worthiness of a candidate, but instead looks at other characteristics including cash flow and behavior.  

For Goldberg, aside from the underwriting technology, Elevate’s product is innovative because “it is the first subprime credit product to offer prime features,” he said.

Those features include on/off functionality, credit score monitoring, fraud alerts, and a full service mobile app.

The card will not, he said, have any reward features. Interestingly, the system of rewards, points, and cashback is considered a crucial competitive advantage for prime credit cards. In fact, some credit cards’ entire popularity can be based on its rewards on points programs (more on that here).

Elevate’s card, set to launch in two months, will first be made live to users on an “invitation only” pre-selection basis, Goldberg said.

“The look of the card is also exciting,” he said. “This card isn’t a vanilla non-descript design like the other cards in this industry, this one will be chip-enabled with a premium look.”

So far, Elevate has originated $5.2 billion in credit to more than 1.9 million non-prime consumers.