Meet Kash, the most exciting payment startup in town

FusionWire, January 2016.

kash wpMeet Kash, the most exciting payment startup in town

Kash isn’t your average scrappy payment startup – the billion dollar retailers have already started knocking. We met with co-founder Kaz Nejatian in San Francisco, to talk about how this startup is gunning to replace credit cards.

At first glance, Kash could be mistaken for just another payment technology startup, although one with a particularly bold goal: to become the retail payment method of choice. Nothing about Kash’s offices in San Francisco’s SoMa district pegs the company as remarkable; as is the case for many of the City’s early startups, searching for Kash’s offices leaves you concerned you’re about to walk into someone’s flat. But no, this is the right place, says CEO and co-founder Kaz Nejatian as he lets me in, explaining how there are six Bitcoin companies in the building, which neighbours Pinterest and AirBnB.

In his hoodie and ‘Toronto Law’ t-shirt, Nejatian brings out water in mason jars as he explains how four people work for Kash in SF and three more in Canada – this count should double this year. But this is by no means a bootstrapped operation. Kash’s ambitious plan to become the retail payment method of choice has some big-name backers: first Y Combinator, then investors including Tim Draper and Green Visor Capital – and in September, former Visa CEO Joe Saunders joined the Kash board, alongside Square founding member Sam Wen. In other words: the Kash plan may be bold, but the talent pool is deep. Nejatian tells a compelling story, and after an hour in his company it’s hard not to get onboard with the excitement.

The quick and cheap alternative
The key to what Kash does, is letting people pay for things using direct debit: “We’re the only direct debit company in the US,” says Nejatian. “In the US, there’s no instant payment system that’s affordable.” The alternatives are the credit card networks, which are quick but expensive – or the Automated Clearing House network, which is cheap but takes several days. Kash adds an API on top of the banking network, which then allows people to log into their bank accounts and pay directly, at low cost. It’s all done and dusted in about two seconds.

This all sounds great, but still – getting people to change a behaviour as fundamental as credit and debit card payments is a tall order. It’s not like Kash is the first to have tried? Nejatian nods, eager to explain. First of all it’s easy: the payment is done within the browser, with no app required, and the technology is available to 93% of US consumers. The low rates are a key issue for merchants choosing Kash: instead of paying the usual 4-5% transaction fee to clear card payments, e-commerce merchants pay 0.5% with Kash. This enables them to either pocket the difference, or pass this saving on to their customers.

“We do incredibly well everywhere we’re deployed. We’ve just deployed across a major e-commerce retailer – our e-commerce product came out less than five weeks ago! On this e-commerce route, we do over 25% of transactions. In the first week there, we beat every brand of cards.” Right now, about 400 companies use Kash, with several more in the pipeline. In about three months, a “multi-billion dollar company” with physical outlets in fifty states will join this number – Kash can be used both online and in-store.

The reception from the established banking industry has been positive, says Nejatian: “There are banks that really like us, and we have big and small partner banks. But credit card transactions are the single largest source of revenue for American banks, so there are obviously banks that are nervous about that revenue going away.” Nejatian hopes to partner with more banks, but accepts it will take time. “The regulators here take a much dimmer view towards innovation [than in the UK]. It’s not as easy for banks here to say they want to have a fintech innovation hub that lets startups do whatever they want.” Nejatian shrugs; the Canadian national was previously a banking lawyer in New York, making it easier for Kash to navigate this issue.

The anti-fraud guarantee
Another appealing feature of Kash is how merchants are protected from chargebacks, which in the US can be significant. Then there’s how the technology boasts being highly resistant to fraud. Kash will cover fraudulent transactions up to $100k, says Nejatian: “But we haven’t had a single case of fraud.” Asked to explain how they’ve managed to create a system that makes this possible, Nejatian compares standard card payments to a game of Chinese Whispers: you swipe your card and it starts a chain: to the gateway, the bank, the network, and many more steps beyond:

“Instead, we have an algorithm that clears transactions, determined fraud, and moves money around. We use literally hundreds of factors to determine fraud, credibility, and creditworthiness. None of those factors we use are used by credit card companies.” Nejatian asks if I have a $5 note on me. “If I have the serial number that’s on your bill, I couldn’t spend that $5, right?” I look at the note in my hand. “But if I knew the 16 digits on your credit card, I could buy myself a Louis Vuitton purse tomorrow.” He laughs. “If you were to design a payment system today, you wouldn’t say, ‘Let’s clear money using 20 random digits!’ Because that doesn’t make any sense.”

Most of the security features in the Kash algorithm are kept secret – Nejatian will go as far as saying one of them is your IP address, but there are several dozen more. “We know information about you that your bank doesn’t know, and doesn’t want to know. … When we know those things, we don’t have to rely on numbers.”

A passion project
Having a catalogue of big name supporters to point to has been good for Kash as it pushes ahead with its ambitious goal. “But I think what makes us impressive to our merchants is when they see results. 80% reduction in transaction fees – that’s real to people.” Nejatian pauses. “I come from a long line of retailers. We moved from Iran to Canada when I was 12, and we had a corner store. I would go through our bank statements and look at credit card fees, and every month the credit card companies were making more money from my mom’s store than my mom was. Every single month. That’s true for most merchants in the US and Canada.” Nejatian was 14 years old when he decided he wanted to do something about this. “I’ve been thinking about this for a really long time! It’s nice to have a plug that a lot of people are using, and like. It’s having a real impact in the world.”

While getting small retailers onboard is Nejatian’s hobby, he knows full well it’s the billion-dollar chains that are going to make Kash a success. Progress has also been aided by the US’s recent migration to chip and PIN cards, which changed the landscape for card fraud by driving it online. “We honestly didn’t expect e-commerce [takeup] to grow as fast as it has,” says Nejatian. The company started in 2012, but the first few years were spent building the tech from scratch – the actual product is less than a year old. Even more amazingly, this growth has happened without a sales team, as it’s all been word of mouth. “But we’re building a payment company – it will take a while! I’ve waited twenty years to start the company. I can wait twenty more years for it to become a big company.”

The goal is to take Kash global: “The payment system is broken virtually everywhere. It’s bad in the US, but it’s terrible in Africa and Asia. … Moving money should be frictionless. Ideally moving money shouldn’t cost you. We have a long way to go.” Nejatian describes Kash as his mission in life, and considering his enthusiasm it’s hard to doubt his sincerity as he explains he didn’t start Kash to run his own company, but to make payments more affordable for people. “I want this to exist. I think we’ll be the ones to do it. But even if we’re not, I’d want this to exist.”

Berliner pretzel; Cornish pasty

This Recording, March 2013. Original article here.

TR pastyBerliner pretzel; Cornish pasty

The train terminal at Berlin Schönefeld Airport is just across the lawn of the terminal building. As the plane to London was set to take off in less than 25 minutes I was walking fast across the grass, but I figured there was no point in running. I mean, we were basically there, and no bears were chasing us. My boyfriend, on the other hand, was jogging up ahead, berating me for my lack of effort; he’d been stressing about the time for the entire train journey from the city. As if that would make the train move any faster, I’d muttered under my breath, as I slouched back in the train seat. I was eating the soft pretzel I’d bought from a little bakery stall after we missed the last train that would get us to the airport at a reasonable hour; it was still hot from the oven.

My boyfriend didn’t want a pretzel. What he wanted was to sit at the edge of his seat for the half-hour train ride and urge the engine forward with Jedi powers, before sprinting up to the terminal building. I caught up with him in the security line, where we scowled at each other, casting quiet blame for ending up in this predicament. It matters whose fault it was, you see, because foreign travel has cost me three relationships; four if you include the one I broke up with twice.

The first time it happened the guy wasn’t even there. I’d gone to Athens with a friend who was headed there on a business trip, which meant I often ended up on the roof after dinner, drinking beer alone while she prepared for the next day’s meetings. The night sky was black, the Acropolis was set in lights; I was bored and half-drunk and couldn’t stop thinking about some guy who wasn’t my boyfriend. Fast forward a year or so, past our resulting break-up and us geniously getting back together again, and we found ourselves going on three weekend trips together in a single month. Of course we never lived to tell the tale. Dubrovnik was the straw that broke the camel’s back; the walled city is on the World Heritage list and it was wonderfully sunny, but what I remember best is sitting outside some Renaissance church paying mobile roaming charges to call a friend, trying to put my finger of the feeling that nagged me. My parents went to Dubrovnik too later that year, and when they showed me their holiday photos I pretended I’d never been there.

Being a catalyst for a break-up doesn’t always result in negative feelings about a place though: I have pretty decent memories of Porto still. My boyfriend and I had been travelling around Portugal for two weeks by train, pulling into Porto as a couple and departing as free agents. This is a long time ago now, but I still remember a stand-off on a street corner where we wanted to go down different roads. I will refrain from making a lazy metaphor. I ended it in the airplane, up in the clouds, thinking maybe it would make it feel lighter. Somehow it worked. Something similar happened in the clouds over San Francisco, again starting in an airport, as I was headed back to London to see my boyfriend after a month apart. I was the last to board, forcing myself to keep walking down the retractable walkway while everyone else were already in their seats. Even when I think about this now, the prevailing memory is the sadness of leaving the foggy city, not the guy.

I’ve been told you’ll know everything you need about a person by how they’d behave if you got to the airport and realised you’d forgot your passport. I think about this every time I search for my passport at the security gate, because I have a sneaking suspicion that it’s not the offending boyfriends that would have failed this test. The common link here is me. I’m the one who looks over at them, the only familiar element in a sea of foreignness, and think, do we fit, even when there’s nothing else tying us together? There’s something menacing about finding yourself in an alien environment with someone, manoeuvering coded transport maps, arbitrary tipping rituals and hunger-induced fights in cultures that like to have dinner at 10pm. Not to mention the feeling of watching the person you love and adore lose their cool and stamp their feet like a five-year-old, because no one understands them when they read French words in a clunky English accent. If the cracks are already there, it culminates in one central, bleak observation: ‘We don’t belong, not here, not together.’

Or possibly something more unkind comes to mind, judging from how my boyfriend was looking at me and my pretzel during the Schönefeld scuffle. I ignored him, licking the salt off my fingers. We reached the gate with a cool ten minutes to spare, and opted to sit separately for the hour-long flight home. We made up once we reached London, hunched over Cornish pasties on a freezing train station, a scenario familiar to us and one in which the two of us made sense. We laugh about it now, as it ended well. But we’ve decided to stay put in our own city for a while, just to be safe.

On the real hippie trail in San Francisco

Published in Viator, 2012. Original article here.

On the real hippie trail in San Francisco

“Are you looking for a restaurant?” I look around and find a little Chinese man smiling at me. You cannot stand on a San Francisco street looking uncertain for long before someone will offer their assistance (or alternatively, ask for some). The old man has found me on the kerb outside the Buddhist temple in Chinatown, my hair and clothes now pungent with the smell of incense and burning paper. Or is it holy smoke? But yes, I confirm, I am indeed looking for a place to eat. He then asks if I am alone, and nods knowingly when I confirm this: “I came here alone once too, from Hong Kong. This city gives you wings.”

We end up having lunch together, the old man and I. At home I’d have been a lot more reluctant to go off with a stranger like this, but San Francisco has a knack for making you surprise yourself. Its main attractions aren’t the bridges or the cable cars, but a feeling; maybe it’s in the water, maybe it sneaks under the door while you are sleeping. Out here on the foggy peninsula, something’s up. People actually wear flowers in their hair, as San Francisco does a surprisingly good job at living up to its substantial reputation: hippie paradise, rebel haven, magnet for idealists, non-conformists and the occasional nut-job.

Simply walking down the street will give you a decent fill of the San Francisco hippie flavour, with chatty strangers, talented street performers, wafting smells of various substances, as well as general friendliness and curiosity. But if you are serious about gaining your flower power credentials, here are ten must-see destinations.

Swedenborgian Church, 2107 Lyon Street (on Washington)
Hidden out in Pacific Heights, this lumber and redbrick building from 1894 is the brainchild of Emanuel Swedenborg: theologian, scientist and receiver of divine messages. I arrived there in the early evening not expecting to find it open, but the priest, just about to lead a group in bible study, was kind enough to unlock the church for me. It’s a small, homely space: pulpit at the front, hearth at the back. Madrone tree trunks hold up the roof, and the priest pointed out how the maple chairs are made without a single nail. Swedenborgianism is founded on the belief that humans are spirits in a material world, unified by nature, love and luminous intelligence. Swedenborg called it ‘New Age’.

Yoga to the People, 2973 16th Street (on Mission)
‘This yoga is for everyone,’ is part of the guiding principle of this yoga studio. This literally means anyone, as this organisation is run on donations only. Concerned that people may become priced out of yoga, which will set you back at least three figures a month for regular practice, Yoga to the People aims to be a place where the spirit of yoga is made available to all, regardless of means. ‘All bodies rise,’ they say. Namaste.

Bound Together Anarchist Collective, 1369 Haight Street (on Masonic)
This floor-to-ceiling bookshop is chock full of books, zines, posters and pamphlets for the anarchist within. Bound Together has operated in Haight Ashbury for over 35 years now, having turned into a cultural gem in an area that still flies its hippie flag proudly. The bookshop is at the more political end of the hippie spectrum, meaning those more keen to re-live the more, let’s say, mellow elements of the Summer of Love, which happened just up the road, will find plenty of opportunity to do so on nearby Hippie Hill.

Iskcon Hare Krishna temple, 2334 Stuart Street, Berkeley (on Telegraph)
Across the Bay, another pocket of hippie history can be found in Berkeley. The Nag Champa incense lingers on Telegraph Avenue, where hoodie-clad students from the university add a freshness to the tie-dye. I was sitting in a coffee shop near the campus when a robe-clad man came up to me, asking if he could give me a booklet to the nearby Krishna temple. They can teach me how to change my karma there, he said. I have had worse offers. Lectures, chanting and vegetarian meals are also available for those looking for a more step-by-step approach.

Cathedral of Saint Mary of the Assumption, 1111 Gough Street (on O’Farrell)
Most San Francisco visitors will go to Grace Cathedral, the Episcopal house of prayer designed in the old French-Gothic style. But Saint Mary, the modern Catholic church sitting on Cathedral Hill, is by far the more unusual, and probably even more awe-inspiring. Built in 1971, the saddle roof exterior is intriguing, but it’s the inside the place that will take your breath. The concrete columns, interspersed with strips of coloured glass, sweep up to form a point high above the altar that tilts everyones heads back.

Konko Temple, 1909 Bush Street (on Laguna)
Near the windswept Japantown plaza is the Konko Temple, a small, unassuming building constructed from blond wood. In the Konko faith, heaven and earth are equally important to make a person whole, explained the reverend when I visited. I’d been sitting in the modest room for a while before he came over, patiently answering my questions and cracking the occasional joke. Kami, the Parent God, is not off in some faraway place, but here with us right now, he explained. Everything is related.

Zen Center, 300 Page Street (on Laguna)
New faces are very welcome at the modern-looking Zen Center, which holds tours for beginners so we can learn how to behave in the temple. A quiet, bright-eyed man in a robe took us around to explain what the bells mean, how to bow and how to take off our shoes in the temple. This was on a Saturday morning, just after we’d listened to a talk by the Buddhist Soto Zen reverend, a soft-spoken woman who explained It takes six months just to learned how to sit. And if you can’t … well that’s just the way it is that day. Instead, take a step back and see things for what they are.

Peoples Temple, formerly at 1859 Geary Boulevard (on Fillmore)
The Peoples Temple is a reminder there is a darker side to San Francisco’s penchant for new ways of thinking. The Symbionese Liberation Army, the radical group which kidnapped heiress Patty Hearst before she joined them to rob a bank, started in the Bay Area, and Peoples Temple founder Jim Jones decided San Francisco was the right fit for his flock. Initially, he adhered to the utopian dreams of the International Peace Mission movement, but things took a darker turn when 918 of Jones’ followers committed mass-suicide from drinking cyanide-laced Kool-Aid.

Vedanta Society, 2323 Vallejo Street (on Fillmore)
This 1905 building, with its concoction of styles, has seen better days. Still, it provides an interesting glimpse into the Vedanta Society, an order associated with monasticism and a basis in Hinduism. Just look at the building itself: each turret carries the symbol for a major religion, signalling the basic principle of ‘oneness of existence’. Vedanta teaches that the essence of all things infinite and eternal, and that all religions lead to the same goal.

Tien Hau Temple, 125 Waverly Place (on Clay)
In an alley in Chinatown, on the top floor of what looks like a residential building, is the oldest Chinese temple in the US. This, however, is not a place to sit in quiet contemplation, but a working temple. Ladies sit along the wall busily folding paper, which visitors buy to burn in the fireplace. The ceiling is covered in red and gold lanterns, with dangling messages attached, while every surface is covered in icons and incense. The smoke fills the temple before escaping out the open door, taking the prayers along with it.