Goldman Sachs leads $50 million investment in millennial credit-card start-up Deserve

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Most of the card industry still relies on 1970's era technology, including mainframes and the COBOL programming language.

is betting on a Silicon Valley start-up that's seeking to modernize the systems underpinning the credit-card industry.directly to nontraditional consumers

with little credit history and other deficiencies using a cloud-based platform to determine their creditworthiness. It also sells that platform to corporations for them to offer their own branded cards. The company, which started out as SelfScore in 2013, initially targeted international students who couldn't get traditional credit cards. It later opened up to other groups of millennials who struggle to qualify for traditional cards because they lack a credit history, using machine learning and alternative data sets to make the determination whether to issue the cards.

Last year, the firm returned to its original plan of offering its tech to financial institutions and other companies, what it's dubbed "credit-card as a service," according to Deserve CEO Kalpesh Kapadia. Most of the industry still relies on 1970s era technology, including mainframes and the COBOL programming language, he said.

"There's a need for a modern, mobile-first, digital-first, highly configurable solution that's completely in the cloud," Kapadia said in a phone interview. "Goldman sees the value in that given they didn't have any legacy infrastructure when they started Marcus."

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