Buy now, pay later (BNPL) products have become incredibly popular with users, and both startups and tech behemoths such as Apple have taken notice. But BNPL companies have attracted some controversy, too, for encouraging people who are less financially secure to take on debt without fully explaining the associated risks.
Kasheesh, a fintech startup that's less than two years old, came out of stealth today with a product its founders say can benefit consumers by offering flexibility that's similar to BNPL, but without taking on a loan. The company's main product is a web browser extension that allows customers shopping 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 TechCrunch.
"You're using your existing credit and your existing debit to actually facilitate the transaction rather than going through a credit pull and underwriting a loan that you don't fully understand and then buying the same item and owing money over six to 12 months," Miller said.
The platform itself launched in private beta mode in January and has already brokered over $10 million in user transactions and purchases, according to the company. Miller added that this number has consistently doubled each month since the launch.
Kasheesh targets two main types of customers, Miller said. The first group is the "paycheck-to-paycheck" consumer that uses the platform as a budgeting tool to avoid overdrafting their cards or overutilizing their credit. The second bucket, he added, is the customer who "has 10 credit cards and want[s] every card to be top-of-wallet." Those customers can also use Kasheesh to split purchases with friends, for example. Miller said the company hasn't gone after those users intentionally just yet because although the technology supports shared purchases, the company is still so early-stage that it hasn't built out capacity on its customer support team to handle inquiries from numerous people about a single transaction.
In addition to its public launch, Kasheesh also announced it has raised $5.5 million in seed funding from institutional and celebrity angel investors. VC firms Tribe Capital, Anthemis and Courtside Ventures participated in the round alongside 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 from interchange fees from MasterCard, which helps Kasheesh issue a single-use card on behalf of users to complete each purchase. That single-use card, Miller explained, pulls from the customer's desired funding sources and allows the customer to choose how much money to use 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.
Sam Miller, Kasheesh co-founder and CEO. Image Credits: Kasheesh
Eventually, Kasheesh plans to develop its technology so users can use the same card across multiple transactions rather than having to generate a new single-use card each time, Miller said. Miller also plans to grow the Kasheesh team, currently 12 people, by recruiting heavily for product and customer success roles.
The company says it's also focused on security and keeping customer information confidential. Kasheesh partners with Stripe and Plaid to process transactions, so the company doesn't store any credit card information on its own servers, co-founder and CTO Kevin Kim told TechCrunch.
"We're big believers in the anonymous component of transactions. I kind of liken it to the day where there was always that one person in the grocery store line that had to write a check when they were checking out from the grocery store, and it's the stigma that went along with that. For that reason, we don't, we don't cherry-pick. Everyone is viewed exactly the same -- doesn't matter what geographic location, demographic information, what cards you're linking, none of that matters to us," CEO Miller added.
While Kasheesh is serving many of the same consumers as BNPL would, Miller is confident its product is differentiated enough to stand out.
"We view the entire fintech world as one giant competition," Miller said. "I think that alternative financing at checkout is the category we fall into, and that includes BNPL, that includes traditional forms of payment like credit and debit, it includes crypto, but. I think that we don't have any direct competition in the sense of who's doing exactly what we're doing … But I do think that there's going to be this huge wave where the consumers are looking for a little bit more power and transparency at the point of the purchase."