Leveraging Apple Pay, Kash Hauls In $2M

With Apple Pay and its fight with big-retailer-backed CurrentC grabbing headlines, San Francisco mobile-payments startup Kash thinks it can win over merchants by reducing interchange fees while dodging a requirement for NFC-enabled phones. The company said on Tuesday (Nov. 4) it has raised $2 million and is launching nationally, according to VentureBeat.

Kash doesn’t use the Visa/MasterCard processing network, instead taking money directly from a customer’s bank account and sending it directly to the merchant. Kash itself collects 0.25 percent of each transaction, a small fraction of conventional payment-card interchange fees. To pay, customers show a QR code, which the Kash app changes every 50 to 60 seconds for each bank account, which the merchant then scans — an approach similar to Bitcoin wallet Circle.

But to succeed beyond its current group of 15 Bay Area merchants (mostly coffee shops, lunch counters and juice bars), it will have to gain wider traction. Part of that will come from the $2 million in seed funding from Draper Associates, Structure Capital, and Green Visor Capital.

But Kash founder and CEO Kaz Nejatian told VentureBeat that some early-adopting stores have seen as many as 10 percent of customers using the app, often with merchants themselves helping users to download and set up the app. That kind of merchant investment could ultimately be critical for Kash to have any chance of survival amid the big players.