Why I joined Kipp

It was time for a change. After 3 years growing the APAC market for one of Israel’s leading fintechs, I was ready for a new challenge.?

There are always pull and push factors behind any career move but I want to focus on why I am so excited about what we are building at Kipp. Here are the 3 key reasons why I joined Kipp:

1. Size of the opportunity
2. Innovative solution
3. Quality of the early team and investors

Size of the opportunity

According to Chargebacks 911, $443b of eCommerce transactions fail due to an issuing bank rejecting the transaction. Typically, these transactions fall into two buckets; credit risk and fraud risk. For the experts reading, these are your “Insufficient Funds" (credit) or "Do Not Honor" (fraud) reason codes that you see in your monthly reports from your payment services provider (PSP). Ultimately, when the transaction is declined, everyone loses. The consumer, the merchant and the issuer all miss out on their piece of the action and are left frustrated. For the consumer, they miss the opportunity to check out and buy the product they have spent time filling a virtual cart and will likely complete their purchase elsewhere. The merchant loses a legitimate transaction and potential sale. And the issuing bank loses out on the small revenue they would have made on the transaction, but more importantly, they are likely to lose their “top of wallet” position, as the customer likely uses a different card on their next few purchases.

Having seen the size of the challenge faced by merchants selling online, who, on average, lose 1 in 7 transactions due to these declines, the need for a solution is pressing - a veritable black stain on the eCommerce industry that many would love to remove.

Innovative solution

In solving this problem today, many merchants seek workarounds that involve retrying the transaction at a later point, routing the transaction through a second acquirer, or even manually picking up the phone to contact the consumer and ask them to provide an alternative card to process. And yet, all of these workarounds only kick in after the consumer has actually been declined by the issuer. In many cases it is too late to recover the transaction and there is no guarantee that the consumer will try an additional payment method.

Kipp’s solution is to work with the issuers directly such that at the point when they are about to decline the transaction, they can check with Kipp, in real time, whether the merchant is prepared to share in the cost of risk of the transaction - in which case, the order can be approved.?

In essence, Kipp has created a market whereby the issuer can be appropriately compensated by the merchant to accept a transaction that otherwise the issuer would have rejected. The issuer does this by setting an “ask” price, that if the merchant is prepared to pay for, “bid”, the transaction can be completed.

Kipp takes the binary decision that a bank makes today when deciding whether to accept a transaction and makes it a ‘shades of grey’ question. For those that have worked in finance or payments, one can appreciate that the question of whether an individual can actually afford a payment is not a clearcut question. In this respect, Kipp has created a market, where previously, none existed. The feedback from experienced payments managers so far has been overwhelmingly positive.

Quality of the early team and investors

Let’s start with the obvious. The founders. Chanan Lavi and Nir Levy.

Chanan and Nir are payments experts who have sat on all sides of the fence - experiencing the challenge as a Merchant (888 Holdings), Issuing Bank (Cal) and Acquirer (Finaro, formerly Credorax). Combined, they have decades of experience and are intimately familiar with the world of payments. This rich understanding on both the commercial and technical side of the challenge deeply impressed me and means I have a lot to learn!

They have recruited industry experts like Inbal Singer, Head of Product (888 Holdings) and Gordon McKenzie, Banking Sector Lead (Microsoft) as well as a first-class team of advisors with deep industry experience. The other early team members, no matter their previous experience, are sharp and hungry to make an impact.

Needless to say, having quality investors gave me the peace of mind that I was joining a company solving a real pain point with financial backing and advice to weather the current macroeconomic headwinds. Special shoutout to Yonatan Mandelbaum and Brian Sack from TLV Partners (who led the Seed round) for connecting me to Kipp.

In summary, I feel lucky to have found a company solving a challenge with an innovative solution, while being fortunate enough to have a first class team of founders and investors around me. One month in, I am excited about the journey ahead at Kipp.