Buy Now, Pay Later (BNPL) products have become incredibly popular with users, and both startups and tech giants like Apple have noticed it. But BNPL companies have also attracted some controversy to encourage less financially secure people to take on debt without fully explaining the associated risks.
Kasheesh, a fintech startup less than two years old, came out of stealth today with a product that founders say can benefit consumers by offering flexibility similar to BNPL, but without taking out a loan. The company’s main product is a web browser extension that allows customers who shop online to split their payments across multiple combinations of debit, credit and gift cards without having to pay a fee or interest, co-founder and CEO Sam Miller told Technewscity .
“You use your existing credit and your existing debit to actually facilitate the transaction instead of going through a credit line and taking out a loan that you do not fully understand, and then buying the same item and owing money over six to 12 months,” said Miller.
The platform itself was launched in private beta mode in January and has already mediated over $ 10 million in user transactions and purchases, according to the company. Miller added that this number has consistently doubled every month since its launch.
Kasheesh targets two main types of customers, Miller said. The first group is the “paycheck-to-paycheck” consumer, who uses the platform as a budget tool to avoid overdrawing their cards or over-utilizing their credit. The other bucket, he added, is the customer who “has 10 credit cards and wants[s] each card must be top-of-the-wallet. “These customers can also use Kasheesh to split purchases with friends, for example. Miller said the company has not gone after these users on purpose yet, because even though the technology supports shared purchases, the company is still at such an early stage that it has not built up the capacity of its customer support team to handle queries from several people on a single transaction.
In addition to the public launch, Kasheesh also announced that it has raised $ 5.5 million in start-up funding from institutional and well-known angel investors. VC firms Tribe Capital, Anthemis and Courtside Ventures participated in the round along with NFL player Odell Beckham Jr., investor Sahil Bloom and actor Robin Wright.
The company is able to offer its product to users at no cost because it makes money on exchange fees from MasterCard, which helps Kasheesh issue a one-time card on behalf of the users to complete each purchase. The one-time card, Miller explained, subtracts from the customer’s desired sources of financing and allows the customer to choose how much money to spend from each source when making their purchase. For MasterCard, he added, the value proposition makes more sense than BNPL because Kasheesh’s average order value per customer is “well over $ 1,800” compared to the average BNPL purchase, which tends to be much smaller.
Eventually, Kasheesh plans to develop its technology so users can use the same card across multiple transactions instead of having to generate a new one-time card each time, Miller said. Miller also plans to expand the Kasheesh team, currently 12 people, by recruiting heavily for product and customer success roles.
The company says it is also focused on security and keeping customer information confidential. Kasheesh works with Stripe and Plaid to process transactions so the company does not store any credit card information on its own servers, co-founder and CTO Kevin Kim told Technewscity.
“We are big supporters of the anonymous part of transactions. I compare it a bit with the day when there was always the one person in the grocery line who had to write a check when they checked out from the grocery store, and it’s the stigma that followed “For that reason, we do not, we do not pick cherries. Everyone is seen exactly the same – no matter what geographical location, demographic information, which maps you link, none of that matters to us,” added CEO Miller.
While Kasheesh serves many of the same consumers as BNPL would, Miller is convinced that their product is differentiated enough to stand out.
“We see the whole fintech world as one giant competition,” Miller said. “I think cash-backed alternative financing is the category we fall into, and that includes BNPL, which includes traditional forms of payment such as credit and debit, it includes crypto, but. I think we have no direct competition in the sense of who does exactly what we do… But I think there will be a huge wave where consumers are looking for a little more power and transparency in the meaning of the purchase. “