The Founder of Challenger Bank Kyash Talks about “The Future of Money” (1/2)
In its quest for a cashless society the FinTech sector is booming, with new payment services appearing one after another.
Today we had the honor to interview Shinichi Takatori, CEO of Kyash Co., Ltd., the company behind the wallet app “Kyash”. In 2019, Kyash also released “Kyash Direct”, a business that allows partner companies to issue Visa cards quickly and inexpensively through API access. Shinichi Takatori might best be described as an entrepreneur who creates innovative services rooted deeply in his mission to “create a value transfer infrastructure”.
In part 1, we’ll talk about Kyash's view of the world and how Shinichi Takatori’s background led him to become an entrepreneur. In part 2, we’ll focus on his vision for the future and his most rewarding moments.
Shinichi Takatori
CEO of Kyash Co., Ltd.
-- Please tell us what characterizes the two different Kyash businesses.
“Kyash” is a wallet app for individual consumers that launched in April 2017. With that app, anyone can issue a Visa prepaid card, and once you charge it from a credit card or debit card, you can make online payments at any shop that is affiliated with Visa and you can also send money to friends or colleagues. It's a Visa card that anyone can easily create and use immediately. In June 2018, we started offering Real Cards that allow you to pay at every store that accepts Visa. These physical cards are very convenient since they work just like traditional credit cards or debit cards.
“Kyash Direct”, on the other hand, is a corporate payment platform that was released in April 2019. By obtaining a card issuance license from Visa, we were able to help companies to issue cards under their own brands. There is quite a demand from companies wanting to provide branded cards as a service to customers. Rather than getting a card issuance for themselves, it is more appealing to use a global payment network. That’s why we decided to open the Kyash API to companies and developed a solution that provides card issuance and payment functions by using our existing technology. Using Visa’s payment network gives access to over 53 million stores in Japan and overseas.
-- Getting a card issuance license as a startup must have been a very high hurdle. What are the benefits for the users?
There are three main benefits. The first one is that “Kyash Direct” users have the flexibility to specify payment sources such as bank deposits, credit, sales, and company card points.
The second benefit is that the service can be launched at a much lower cost and faster speed. Launching a service quickly means that you can save time and money.
The third benefit lies in the flexibility of “Kyash Direct”. Unlike other platforms, that often use external system vendors, we provide our own payment processing system. This gives our customers the option to freely customize the platform. The above mentioned ability to specify payment sources is only one example for this.
-- I can really relate to your mission of building a “value transfer infrastructure” that eliminates the stress of cash and moves money more smoothly. What impact will Kyash's business have on companies and society?
What kind of financial system does the user really want? By indirectly asking this question to the user, I think we can see that people want “Banking” instead of a “Bank”. In fact, overseas, Bank and Banking are clearly different concepts. A bank is something that is actually built somewhere. Banking, on the other hand, are only the functions and operations performed by banks. In a world where smartphones and the Internet are so prevalent, a lot of people question if it is really necessary to have a bank in the first place. Wouldn’t it be enough to do your banking with your smartphone?
We believe that the development of products based on user needs, rather than the extension of existing systems, will lead to the transformation of financial systems and social values.
-- What was the reason you started thinking about the world of “Kyash” and made you launch a business?
I joined Sumitomo Mitsui Banking Corporation as a new graduate and was in charge of corporate sales and corporate planning for the five years I was there. In corporate planning, I was involved in establishing overseas offices and the issues I had back then are still connected to what I do now.
One concrete trigger was the Great East Japan Earthquake on March 11, 2011. The bank opened a donation account and solicited help. However, the procedure for sending donations was so complicated that some people gave up along the way. I thought if the process was simpler, the feeling of “I want to help” could have immediately led to the action “I pay”.
Another reason was my experience of establishing overseas offices. While investigating the laws and regulations in each country, I learned that Japan's financial system is distorted. In the US, for example, banks can issue credit cards and the customer can immediately check how much they paid for what. In Japan, on the other hand, banks and credit card companies have different jurisdictions and different laws. There is a lack of convenience because there is a separation between your payments and your balance.
So from these personal experiences, I started thinking
‘Maybe banks aren’t playing the role they are supposed to’
‘Aren’t there too many unsolved problems related to money?’
‘If we minimize the inconvenience of the current financial system and improve it, people could be more free.’
It would be even more convenient if you could check your payments or balance, and make transactions all from one place. This made me start to wonder if we could build a “value transfer infrastructure” that provides a smoother experience related to money.
After I moved to a consulting company and worked on the forefront of digital strategy such as mobile shift strategies or omnichannel strategies, I realized that you only need a smartphone and internet access to create the world view you want.
-- Have you always thought about starting your own business?
Since my relatives were in the restaurant business, I always understood the notion of “creating value by myself and making customers smile”, not only limited to entrepreneurship but also in general, and I always wanted to be that kind of a person. But back then I didn’t think about starting a business.
In the beginning of my professional life I wanted to explore an array of business types and I chose working in finance as a fast track for my career. The issues that I experienced there would eventually lead to me thinking about my own business.
When I faced these important issues for society, the option of starting my own business came to mind. “Am I not the only one who can enthusiastically tackle this issue?”
I always felt a bit rushed and back then I wanted to use that rush to tackle the issue while I still had the energy.
-- Are there any particular skills and experiences that you used on your way to realize those new world-views?
Since I was a kid I always had lots of contact with international students from different cultures who lived with us during their study exchange. They would ask me many questions about Japanese habits and customs like “Why don't you tip in Japan?”
From that experience, I realized that what is common to someone is very subjective and depends on people, their environment, and the times they live in. I think I’ve learned to question the status quo and I would ask myself “Wouldn’t this be more convenient if it was changed in such and such way?”
Another factor is that I met many international students across a number of cultural backgrounds while studying in the United States. Immediately after I arrived in the US, 9.11 happened and it would also make me think about religion. I developed an attitude of “just because it has been done this way, doesn’t mean it’s the right way” and this is also reflected in our service.
For example, I question the concept of indirect margins and rather invest those costs in the product.
-- What were the main experiences and learnings that helped you convey the Kyash worldview to stakeholders?
Currently the term fintech is a buzz word and partnerships between banks and startups are increasing. However, back in 2015 when we started the company, it was a completely different story.
One of the things that worked positively in such partnerships was my experience in the financial industry. I could sense whose approval was necessary to move on with a project and I was able to understand the industry and identify the key people within an organization I wanted to partner with.
Let me give you an example of our partnership with Visa which was the first company we partnered with. When you first approach that kind of a company, you need material that shows them concrete benefits of working with you. You have to ask them “What needs to be done, so that you listen to me seriously?”
