Hi, fintech fam! 💜

I’m stoked to share a few speakers hitting the stage and dropping their insights during the Fintech Is Femme Founders Summit on June 3, kicking off NY Tech Week!

The event will cover fundraising, go-to-market, and growth strategies with learnings from:

• ​Lisa Carmen Wang is the Founder and CEO of Bad Bitch Empire, an investment platform building unapologetic worth and wealth for women.

• ​Carmelle Cadet, Founder & CEO, EMTECH

• ​Stephanie Campbell, Co-Founder and General Partner, The Artemis Fund

• ​Bukie Adebo Umeano, Investment Principal, Anthemis

• ​Sophia Goldberg, Co-Founder & CEO, Ansa

• ​Frances Zelazny, Co-Founder & CEO, Anonybit

• ​Fay Vlahu Scott, Vice President of Marketing, April

• ​Ambar Vitelli, Innovation Lead, NayaOne

• Alexandra McLeod, Founder & CEO, Parlay

• and more!

Secure your spot here and join us for this fintech summer bash!

Now, onto today’s story!

WHY UPGRADE?

There’s a big difference in how the mainstream media covers fintech and how I do. Every week, I will provide you with the latest fintech news (minus the BS), profiles of inspiring women in fintech, and insightful analysis to help you stay ahead of the competition.

For our premium members, I send out updates 3x a week through our new column, "On Performance.” These columns will provide tactical advice to improve your entrepreneur and business leader performance.

Plus, premium members support female-led journalism and keep this work going. Because of your support, Fintech Is Femme is more than just a newsletter; it's a media empire and community for women to connect, learn, and support one another.

INNOVATION

How This Fintech Startup Builds Credit For Women (Without Credit Cards)

Vrinda Gupta decided to work in financial services after seeing her overly confident Indian immigrant mother lose her fire when managing her family's finances.

Despite building a successful career in a new country and having substantial earning power, she needed help understanding financial matters and knowing which questions to ask when dealing with her financial services providers.

“I remember countless instances where she would defer to my dad during phone calls with the bank,” Gupta told me in an interview. Her mother was utterly disempowered by her lack of knowledge of the financial system despite making a good living. “Looking back,” she said. “Her concerns were valid.” 

After Gupta finished college, she started her career as a product manager, building the Chase Sapphire Reserve at Visa. She figured – what better way to learn about finances than to be inside the financial system creating these products?

She was responsible for crafting nationwide regulations for the construction of credit products. This involved determining how Visa credit cards should be structured, defining reward programs, and identifying target demographics. “I felt confident in my understanding because I was directly involved in shaping these products and ensuring adherence to regulations,” she said.

Gupta was so giddy when the Chase Sapphire Reserve card launched, tailored for young millennials living in urban areas - a demographic she identified with, being based in San Francisco with a well-paying job. She eagerly applied for the card, but they rejected her application.

Despite her heavy hand in launching the credit card, Gupta was denied because she lacked the credit history upon which credit card companies weigh their approval decisions.

Her initial reaction was to wonder what she had done wrong. “It felt like I was taking an important test for which no one had taught me how to prepare,” she said. So she did her research. 

Gupta learned that because the credit card she used was her father’s (she was an authorized user), she wasn’t responsible for paying the balance, which meant she was not building her credit history.

"I didn’t realize I was building his credit, not mine," she recalled. Despite her efforts to work in finance and bridge her financial education gap, she realized that even working in the system leaves knowledge gaps.

“Had I known better, I would have taken steps to build my credit independently,” she said. “However, my lack of awareness prevented me from taking these actions, leading to a vicious cycle.”

She started to research more, obsessing over how many other women faced the same problem. It turns out credit cards disproportionately reject women – while also giving women lower credit limits and receiving higher interest rates despite the evidence that women achieve similar credit scores to men.

Ironically, women have the world’s greatest purchasing power, controlling 85% of all consumer purchases in the U.S. Yet, as women shoulder more household burdens worldwide, they feel less financially secure.

"I saw in Visa data that 70% of women's spend is on noncredit building products, like debit cards and credit cards in other people's names," she said. "It's leaving valuable rewards on the table and, ultimately, affecting our ability to access credit fairly and equitably because we aren't building credit histories."

This realization fueled her determination to address these systemic issues, as she understood that the problem wasn’t her – but the inherent flaws in the financial system.

She discovered even more deeply troubling facts. Until 50 years ago, in 1974, women could be legally rejected from bank accounts and credit cards without a male cosigner.

Until 1988, women could be required to have a male cosigner to obtain a business loan - a reality that persisted until just two years before Gupta’s birth.

“It's sobering to realize that these historical injustices are not as distant as they may seem,” she said.

Even during the recent pandemic, women and people of color faced disparities in accessing PPP loans for their businesses, highlighting the enduring legacy of inequality in the financial industry.

Adding fuel to the fire, financial services companies spend more money advertising their services to male-centric audiences than female-centric ones.

Shockingly, only 1% of financial content is directed towards women. In 2018, financial services companies invested 13 times more money on advertising banking, investment, and retirement products and services in male-skewed magazines than in female-skewed ones.

This lack of representation leaves many women feeling alienated, giving them the impression that financial organizations do not consider female customers as a demographic they care about. Research by Merrill Lynch in 2020 found that “out of 839 articles in 17 women’s magazines, only one had anything to do with personal finance and money.”

Determined to close the credit–and knowledge–gap for women, Gupta decided to pursue entrepreneurship. 

Before striking out alone, Gupta felt she needed to learn about starting a business. She left Visa and went to the Haas School of Business at the University of California, Berkeley, where she did her MBA summer internship at IDEO.

In 2019, Gupta founded Sequin Financial, the first debit card that builds credit geared toward women, risk-free with no credit history required.

Here’s how it works: Sequin forwards the money for the purchase to the merchant on your behalf, then pays itself back by automatically withdrawing money from your connected bank account. It reports those repayments to credit bureaus.

In Gupta's nature, she did a ton of research before designing the product. Her analysis revealed dissatisfaction among women with credit card rewards programs, built based on what men want rather than what women want. She uncovered that women typically use their credit cards to make retail, beauty, charitable contributions, and household purchases.

Addressing these disparities requires a nuanced understanding of women's needs and lifestyles. It goes beyond merely targeting women; it involves recognizing and addressing hidden costs such as the pink tax, healthcare expenses, career interruptions for caregiving, and student debt.

These factors significantly impact financial decision-making and must be considered when designing products and services for women. 

In her book Invisible Women: Data Bias in a World Designed for Men, Caroline Criado Perez explains how the world around us is designed for men and half the population, aka women, are ignored in most design considerations.

She delves into gender-biased public bathroom designs in one of her case studies. It’s expected to be at a concert, movie, or event, and seeing the women’s bathroom line take longer than men's.

If you’ve ever wondered why, it results from male-biased design.

Most designers and architects allocate the same floor space to male and female bathrooms, thinking it’s fair.

In reality, it’s anything but fair as they have not considered how females use the bathroom differently from males.

Most financial institutions are made up of male leadership, suggesting that the same bias is applied to financial services products. The real question then becomes: What is wrong with the system that designed these financial products? 

To what extent are financial services less functional, less equitable, and less impactful because women and people of color are less likely to be the ones creating them?

The good news is that we can change how and who we build for by recommitting fintech to include more female founders building products for the global majority. 

As a woman, a person of color, a first-generation immigrant, and a first-time founder in the male-dominated fintech industry, the chances of Gupta raising venture capital for Sequin were slim. Against the odds, she raised a pre-seed round, which Gupta said she navigated through that process herself. 

Gupta pitched to both male and female investors. It was crucial to her that Sequin's investors understood the company's mission, which women were more likely to do. Those who invested recognized that Sequin targeted a large, lucrative, and grossly underserved market.

Gupta spent more time on fundraising to attract investors who shared her values. With that approach, she could close a pre-seed round of $700,000.

Nearly all of Sequin's earliest investors are women representing consumer tech, financial services, and design industries. Investors included Carrie Schwab (chair and president of the Schwab Foundation), Kevin Weil (former head of product at Instagram), Deb Liu (CEO at Ancestry), Dorothy Jean Chang (president at Kode with Klossy), and several women from IDEO. 

In 2021, Gupta successfully closed her second funding round, a $5 million seed financing round, bringing the total amount raised to $5.7 million.

Investors include Y Combinator, Matrix Partners, Scribble Ventures, IDEO, Thomvest, and Commerce V.C. 

While more voices like Gupta are now speaking up about these disparities, particularly in the financial realm, much remains to be done.

We must dissect how financial products are constructed, examine access issues, and scrutinize how the financial products we use daily are structured.

Most products are geared toward male users because the products are designed by men, thus creating a perpetual financial education and wealth gap between women and men. 

As builders in fintech, we must consider the hidden costs and systemic biases women consumers and clients face in product design.

It’s also important to illuminate how factors like the gender wage gap can impact credit calculations and offer insights into navigating the system more effectively. Despite legal provisions against gender discrimination, societal biases still influence algorithms.

As they say, money is power, and when you combine knowledge with financial resources, you can confidently navigate life's decisions.

While our society typically idolizes individualism, there’s immense value in fostering a sense of community, especially for women, when it comes to finance. 

In some cultures, including some areas of the U.S., finances are approached more communally, with lending and support networks among community members. A more community-focused approach to finance provides practical support and fosters a sense of belonging and shared responsibility. 

Most recently, Sequin Financial announced that its Sequin Rewards Visa® Debit Card is live, the first debit card in U.S. history designed to reward women where we spend and fight the Pink Tax, with up to 6% cashback⁺ on beauty & drugstore hauls, gyms, local salons and more. 

Pink Tax costs the average woman $188,000 or more over her lifetime on purchases of necessary personal care products. This figure doesn’t even include period products (estimated to cost $9,000 over our lifetimes and still taxed as a luxury good in 21 states). Women also pay hundreds of thousands more in healthcare costs, whether it’s monthly pills, vitamins, and supplements or the hidden costs of a healthcare system designed for men.

What’s more, none of the above costs include the impacts of the gender wage gap, which causes a $1.6 trillion hole in the U.S. economy every year. Gupta decided it was time to act and build a debit card to fight the costs of womanhood — for the first time in U.S. history.

Let’s support her mission. Sequin has reserved 150 early access spots for the Fintech is Femme community - sign up for exclusive access. 

Also, this is not an ad. Vrinda's work is fabulous, and we need to support female-led fintech products made for female communities actively.

_{WTF ELSE?}

• EU proposes two-year plan to close gender pay gap 

• 'Neobank in a box' startup Fintech Farm raises $32 million 

• Exploring three scenarios for how Gen AI will change consumer finance

• Fintech firm launches initiative to advance financial inclusion for African women

• Fintech firm Klarna says 90% of its employees are using generative AI daily

_{SEE YOU SOON!}

​At the Fintech Is Femme Founders Summit, we believe content and community are key channels for your startup's growth.

​This summit is your chance to learn and network with leading players in fintech — from top founders, venture capitalists, and operators.

​They'll teach you how to convert your idea and story into millions of dollars in funding, users attracted to your product, and partners eager to collaborate with your startup.

Meet a few of our speakers and secure your ticket here.

_{I WANT IT, I GOT IT}

• 📚 Today’s Read: Burn Book: A Tech Love Story by Kara Swisher is finally on my bookshelf, and I can’t wait to read it once I finish writing my own!

• 👀 Today’s Watch: This Ted talk: How the US Is Destroying Young People’s Future by Scott Galloway is fascinating (and on point).

• 👔 Today’s Fit: If you ever wonder where I get my waist coasts, jeans, and other suit items, it’s all The Frankie Shop.

_FINTUNES

🎵 The Linda Lindas - Growing Up

Happy AAPI Month, friends! Filling your playlists with some incredible Asian American artists. Meet The Linda Lindas, an all-female punk rock band that went viral two years ago due to their insane talent (and so young!)

That’s all for now! Stay safe, everyone. Hug your loved ones. See you Thursday!

Love,

Nicole

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