Hundreds of MasterCards with a simple electronic display screen will ship from a warehouse near Irvine, Calif., on Wednesday to new customers of Binji, a fintech (financial technology) start-up.
Binji’s gimmick: Its card acts as a purse you can use to tap and secure cash from multiple credit cards and other accounts, so you don’t have to haul all that computer-chip plastic around.
The little screen confirms how much cash you have ready, so you don’t have to guess, as with an old-fashioned gift card. This simplifies consumers’ digital finances by joining app-based banking, card consolidation, and peer-to-peer payments, readily tracked on a single platform, according to a statement by Ciright Systems Inc., the West Conshohocken tech vendor who helped launch California-based Binji.
Binji is the latest start-up project supported in its initial stages by Ciright , an “equity tech” firm that employs dozens at its West Conshohocken office. Ciright’s start-up partners pay for its services at least partly in equity — a share of the business — so if they succeed, Ciright does, too, says cofounder Joseph Callahan.
A Juniata Park native — educated at Holy Innocents, North Catholic, and Drexel — Callahan got his first computer, an Atari 400, from his father, a Peco employee. Callahan says he started Ciright in 1993 after a career at General Motors, Johnson & Johnson, and Scott Paper.
“We were a cloud company,” stashing secure data on remote servers “before you heard of the cloud,” he says.
Small software and information technology firms “are always fighting with their clients” over project completion and payments, Callahan says. The client wants a thorough job. The IT contractor wants to be done quickly. The client, unless carefully advised, may have a tough time spotting holes in the system and demanding upgrades before it’s paid for.
By taking payment in equity instead of cash, “we alleviate that," says Callahan. "With equity [in the client], we have a common goal.”
But waiting for equity profits means your working capital — the money that pays your people and keeps the lights on — has to come from somewhere other than up-front cash payments. Callahan says Ciright’s early profits came from CH Medical, an operating-room ventilation partnership with U.K. air-cleaning technology maker Howorth Group that provided regular profits and high margins.
Other equity clients include Tri State HVAC, a building-systems integration service that Callahan says is used at Comcast headquarters and at other Center City high-rises; SmarTechs, an augmented-reality display system for service technician training; and Source Digital, which “does time-aligned metadata” for “commerce-aligned” online content.
Ciright also owns 35 percent of TAPP, which measures beer flows so bartenders don’t give away too much.
Fintech start-ups rely on multiple partners who split risk and profits.
Binji charges an initial $89 — the app that accesses the system by smartphone is free from Apple or Google. Callahan says Binji doesn’t charge service fees. “We are paid from the interchange,” the payments that merchants and banks make to clear credit and debit transactions.
Binji’s bank partner is Florida-based Axiom. The network has “over 35,000 totally fee-free ATMs” located through the apps. The cards’ manufacturer, Taiwan-based Smart Displayer, is a strategic investor in the company. First Data and Bluetooth provide data and wireless services.
I was surprised that a small company would try to launch a service like Binji directly to consumers. Such tech-dependent start-ups used to be launched in partnerships with, or after being purchased by, big banks such as JPMorgan Chase or Citi. But Callahan says tech, security, and launching costs have come down as more financial services migrate online and into the cloud.
Orange County, Calif., the Wilmington area, and other consumer-lending centers have in recent years become home to well-funded collections of fintech start-ups. Financial technology has come to resemble a cottage industry.