Kash

Kash is a San Francisco-based mobile and online payment company that clears transactions directly from consumers' bank accounts to merchants, removing credit cards and intermediaries from the flow. Its SecureDebit direct bank payment method avoids the credit card networks and, according to the company, allows retailers to save roughly 2% to 5% in transaction processing fees; transactions are also guaranteed against chargebacks. Kash participated in Y Combinator's Summer 2014 batch and listed a team size of 11.

As described in a January 2016 interview with co-founder and CEO Kaz Nejatian, Kash positioned itself as a direct debit provider in the US market, layering an API on top of the banking network so consumers can log into their bank accounts and pay directly, with clearing described as taking about two seconds. The product worked in-browser without requiring an app and was said to be available to 93% of US consumers. Merchants were quoted an e-commerce rate of 0.5% versus a typical 4-5% card transaction cost, and Kash said it covered fraudulent transactions up to $100,000. The company operated both online and in-store use cases.

At the time of that interview the team comprised four people in San Francisco and three in Canada, with plans to roughly double headcount that year. Y Combinator's directory subsequently lists the company as acquired.

Founding story

Co-founder Kaz Nejatian, who moved from Iran to Canada at age 12 and whose family ran a corner store, said reviewing the store's bank statements showed credit card companies earning more from the shop each month than his mother did, and that he decided at age 14 to address merchant card fees. Nejatian previously worked as a banking lawyer in New York.

Business model

Kash sells a payment acceptance method to retailers as an alternative to credit and debit card acceptance. Merchants adopt Kash to lower interchange and processing costs, with Kash assuming fraud and chargeback risk via its own clearing and fraud-scoring algorithm and bank-network API.

Merchant transaction pricing: e-commerce merchants were reported to pay about 0.5% per transaction with Kash, compared with a stated 4-5% for card payments.

Traction

About 400 companies using Kash as of the January 2016 interview. Following an e-commerce product launch about five weeks prior to that interview, Kash reported handling over 25% of transactions at one deployed major e-commerce retailer and, in its first week there, exceeding the volume of every card brand. The company reported an 80% reduction in transaction fees for merchants and said it had not experienced a single case of fraud.

Latest developments

Y Combinator's directory lists Kash as acquired; the sources provide no acquirer, date or terms.