Are We Heading Toward A Cashless Society? The CEO Of Raise Thinks So

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In this episode of the Fintech Focus podcast, we’re taking another look at the world of mobile payments with Jay Klauminzer, the CEO of Raise. If you were a fan of last week’s episode in which we chatted with mobile payment company Ibotta, then gear up for round 2.
 
Raise is essentially a marketplace for gift cards where consumers can sell those cards for cash or buy discounted cards. To date, Raise has, for lack of a better word, raised more than $150 million, they’ve got more than 2.5 million users on the platform currently while working with more than 5,000 brands.
 
For Klauminzer, whose background is highlighted by stints at Groupon Inc GRPN and DoorDash, joining Raise was about taking the next step in a career dedicated to e-commerce and mobile payments. 
 
Listen to the podcast below to hear more about the future of this growing market.

Explain exactly how Raise works. It's like a gift card marketplace, right?

Raise started as a gift card marketplace, about seven years ago now in its current form. It was solving a big problem where there were tens of billions of dollars of unused gift cards a year. So it was giving folks a chance to get rid of them and make some money in their pocket while doing so. On the flip side, I could go there as a consumer and get something at a discount, which I think all of us love to do.

So that's how it started and that's still a big part of the business, people like you and I buying and selling gift cards on the secondary market. But what started to really pop a couple years ago was our primary marketplace, where we work directly with retailers to sell their gift cards.

Raise is not the only company that does this sort of thing in the space. We just had Ibotta on the show. So explain how Raise is different than the other people here.

So, one is access to inventory. We have 5,000 brands that you can purchase from today. 500 of those are direct. So we have a selection that is unmatched in the space. And our Pay product is instant. You're talking less than eight seconds while you're setting at checkout. Most of them are actually less than five seconds. So it's on par with, as an example, using Apple Pay and you get cash back for doing so.

Is there anybody that sort of is looming large overhead in the mobile payment industry that everyone is, in essence, chasing?

I think Apple Inc AAPL is certainly sort of the beacon of the industry right now. They built an extremely robust product that the financial institutions kind of had to partner with because of the iOS, especially the commerce going through iOS, just dominates the industry. And so they had early adoption.

And it's a really slick interface. I think what slowed them down has been the technology adoption, right? You need new terminals, and now probably another wave of new terminals with better security and encryption. So that's a large expense for the industry. But I still look at them as a really quick, less than five second product, that works at the vast majority of retailers you're going to. It's kind of driving us towards ubiquity, where I would be comfortable leaving my home with just my phone and not my wallet full of cards.

We talk about a cashless society, and I refer to credit card-less society. But what would have to happen to further us down that road of moving closer to a cashless society or a credit card-less society than we are now?

Yeah, I use the term ubiquity all the time. It is a comfort that I can leave my home without anything but my phone. If you go to China, they're getting there, with Alipay, with JetPay, etc, you can comfortably leave your home with just your app and you can pay at millions of stores there. So I think that's what it is.

It's getting, not just the big national retailers, but getting local mom-and-pops to the point where they've adopted technology where you can pay without cash. And we're driving towards that. The puck is certainly going there. And yeah, it may take decades for the mint to shut down, but it will happen. Look what's going on with blockchain and now Facebook Inc FB probably getting into the coin space. You're seeing the merger of mobile and payments and I think we'd be silly to think it's not going to happen at some point.