Mobile app Kash is announcing a $2 million dollar raise in tandem with the nationwide launch of its mobile payment app, which circumvents the credit card payment network and the high fees associated with it.
Kash is the newest member of the mobile payments ecosystem, which still has a long way to go in terms of consumer adoption. While there’s a lot of excitement around the launch of Apple Pay, Kash thinks it can win over merchants by saving them money.
On average merchants pay 3-4 percent on every credit card purchase. That percentage gets divided up among a slew of processors that help facilitate the network and make card transactions possible. Kash’s new app helps merchants avoid those fees by taking money from a consumer’s bank account and sending it directly to the merchant. Kash itself collects a quarter of a percent on those transactions.
Both consumers and merchants need to download the app, and merchants can integrate the software with their existing point of sale. Kash generates an RSA code that changes every 50-60 seconds for each consumer bank account, which merchants scan — similar to Bitcoin wallet Circle. Kash founder and CEO Kaz Nejatian acknowledges that the app takes some inspiration from Bitcoin payment apps and brings it to a wider audience.
“The average person knows what their bank account is. They don’t know what Bitcoin is,” says Nejatian.
Still, while Kash may be attractive to merchants, it must gain traction among consumers in order to compete. So far, the company has launched in 15 San Francisco Bay Area stores — mostly coffee shops, lunch counters, and juice bars, Nejatian tells me. Within those, Nejantian says some stores have seen as much as 10 percent of customers using the app — often with the encouragement of the merchants themselves, who Nejantian says sometimes help users with the download and setup.
Today the app is available nationwide. This round was funded by Tim Draper, Structure Capital, and Green Visor Capital.
Source: Venture Beat
