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No restaurant operator has time to run to the bank to grab cash during a shortage. And no employee wants to wait days to get their tips when they could get them immediately at another job. Brian Hassan knows this, so he built Kickfin to accommodate these restaurant needs.
Kickfin is a solution that makes sure restaurants can pay out their employees' tips instantaneously, 24/7, 365. As Hassan puts it, the product is focused first on the need of the employee — that's the most important customer, who most urgently needs to be served.
Back of House spoke with Hassan about how Kickfin differs from platforms like Venmo or Zelle, why cashless tip-out is the best way to go for restaurants, and why Kickfin never requires contracts.
This interview has been lightly edited and condensed.
Back of House: From 10,000 feet, for someone who has never heard of Kickfin before, can you explain what it is?
Brian Hassan: With the growth of credit card transactions, there just simply isn't enough cash coming into a restaurant or hospitality group to fulfill cash’s biggest utility — which is not filling drawers, or giving change, but paying out tips. And so prior to Kickfin, there's been really no good way of doing this. Operators were either forced to run to the bank to pick up cash to cover their shortage to issue tips, or use armored cars to actually deliver cash, which is typically done with many high-volume restaurants. A small percentage of restaurants have actually put tips on payroll, but it's been met with a lot of employee pushback, oftentimes resulting in them looking for other employers to work for.
Now more than ever, and primarily because there are less and less shifts available, having access to earnings immediately is becoming that much more important. It's exactly why cash has been so persistent both before COVID and after COVID. So Kickfin is really the only solution in market who's reimagined the solution, which is putting funds where employees want them: into their own bank account, where their bills are paid, not on a third-party, Visa card or gift card, and not on their paycheck. We are the only company in the United States that's connected to all banks and credit unions to deliver tips instantaneously — 24/7, 365, whether it's 3 in the morning, Christmas Day, or Sunday. So that's a little bit about the problem that we're solving, the solutions that we built, and how we're different [from] any other company you might come across online.
BOH: Is this technology similar to platforms like Venmo or Zelle? Is it something totally different?
BH: I'll highlight the differences in those products that you had mentioned. So in the case of Venmo, it's very different. Venmo is a wallet solution. When you're paid to Venmo, the funds sit in your Venmo wallet, and then you need to determine how you'd like to move the funds, whether it be to a certain bank account, instantly for a fee, [or] free in five to seven days. So that's a wallet solution. Furthermore, [Venmo is] not really a great solution for businesses because they have a $2,999 weekly limit, which if you talk to most restaurants, they're paying out more than $3,000 in a week to their staff.
Zelle is a solution that's built on the RTP (real time payments) network, which does deliver funds instantaneously. However, only 50% of banks are RTP-enabled, and that touches 70% of consumer accounts. So, great solution if your employees bank at one of the accounts on that network. The reality is that employees don't just bank at Chase or Wells Fargo, they bank at small credit unions, [or] they might have no bank accounts and have a prepaid card. So Kickfin’s looked at those two solutions and said, “We need to be something for everybody. We need to be agnostic, we need to put money where employees bank, regardless if they bank at a small credit union or major bank.” And so our technology is different from Zelle in that regard.
BOH: You mentioned that tipping out through payroll is potentially causing staff frustration. Can you expand on that a little bit? How can Kickfin solve that problem?
BH: A lot of people, if you ask [why they’re] in the hospitality space, will say, “Well, I love delighting customers. I love my tips, and getting my tips instantly.” So, tips on payroll provide two inherent challenges to the employee. Number one: employees oftentimes say that they don't trust or believe their employer is calculating or paying them out the correct tips over a two-week period, so getting it daily allows them a little bit of the ability to provide accountability. That's kind of a small issue. The larger issue is having access to those funds immediately. Tips represent nationally between 60 and 70% of a tip-eligible employee’s earnings. If they're having to wait two weeks for those earnings, what they're going to do is look for a restaurant or a bar that pays out daily in cash, or there are a plethora of gig-economy roles that they can take on and be paid daily.
COVID has certainly accelerated this and given employees an even greater need to have access to these funds instantly. If you think about it, I'm going and working at a restaurant with 25% indoor capacity, I'm getting three shifts a week, versus working at 100% capacity five days of the seven per week. So maybe in that latter example, I [can handle waiting] two weeks, maybe I can't. In the former example, that's going to be near impossible. I've got to buy food for my kids. I've got to pay for copay. I've got to pay for gas to get to work. I can't wait two weeks to get 25% of what my pre-COVID earnings were.
BOH: As we approach something proximate to normal by mid-summer and the rush to rehire continues, being competitive and being able to offer something like this would theoretically be an advantage for restaurants looking to bring on better talent, right?
BH: Absolutely, and I mean, and there are players in the space solving this problem like Kickfin is, but they're using a very, very old and outdated approach. These are known as payroll cards or pay cards, which are honestly a gift card solution. I only want to bring that to your attention because [at Kickfin] we're going directly into the employee’s account of choice — no detours. We're not putting funds on a third-party Visa gift card solution that has a beautiful looking app and saying we're modern, when in fact, it's just a dated solution looking to grab market share.
Here's the problem. Let's imagine I got my three shifts, Friday, Saturday, Sunday, for my tips, and my employer is putting it on this pay card. On Monday, I've got my Comcast bill, I've got my health insurance coming out, I've got my auto insurance. It's going to take me four days to move those funds from this gift card to my bank account, so I’ve just overdrafted, I've just incurred $80 or $90 in overdraft fees, and my policies might have been canceled.
Now you're seeing why, previously, employers disliked pay cards because they were written and predatory with employee fees. They promise, “Hey, we're gonna give them free ATMs,” but they're giving them the skinniest ATM networks available, because 50% of their revenue is driven off of out of network ATM usage. Plus these employees may need to move money to their bank account to pay bills, and they're getting them with three- to four-day transfer times, because they're saying “I want that employee to swipe this card at point of sale. I want them to spend money so I can make interchange.” And that is not the right ethical approach for a population that needs to pay for goods and services that are a requirement in their life, not a pack of gum at a convenience store. I only wanted to add that to today's conversation because there's far too many of these predatory pay-card companies with hidden fees taking advantage of employers and employees alike, and they just need to be educated on it.
BOH: From the employee perspective, do they have to do anything to participate in Kickfin?
BH: When we built Kickfin, we took a year and field-tested. And here's why that's important. Far too often, Silicon Valley companies build solutions to solve problems before understanding the buyer and the problem itself. We met with operators of all sizes and in all segments, and what we've found is that enrolling and building a solution around a mobile app is not going to be successful to start. And here's why: that would require 100% of employees [to have smartphones.] If you spent any time with any GM or any operator, they're going to tell you that is not possible.
We've made the onboarding process very simple. The manager keys in name, email, and cell phone for an employee. It will issue them a text message invitation, on which they'll then key in any missing data and key in their debit card or prepaid debit card details, and they're done. It takes a manager about 15 seconds to add an employee, and it takes an employee about 45 seconds or less to enroll. So in under 60 seconds, the employee’s in the system.
BOH: What are the ways that this product has changed during the pandemic? What's on your roadmap for the future? Give us a little bit of a sense for how you're thinking about Kickfin’s role in the market and how it's evolving.
BH: From a product standpoint, we're rolling out AR. It's been a huge project of ours. It’s our second version, which will have some additional features from a reporting and compliance standpoint for employers, and even easier onboarding — if you can even imagine that — for employees that will be rolled out in the late spring or early summer. We're also working on some amazing point of sale integrations, as well. We just completed our integration with Heartland Restaurant POS, and there are tons of others that we'll be integrating with this year, as well. So there'll be some great features in that regard.
In terms of Kickfin's future, I'm sure you can imagine, we're solving a huge problem for operators. We are directly providing an operational solution to management in corporate, but in the end, we're also fostering a relationship directly with the employee. So we see Kickfin as not a manager-centric solution, but an employee-centric solution. And as we evolve, and our product team looks at additional features to add, come summer this year, they will be employee-led solutions. Because at the end of the day, that's our most valued customer — ensuring that we're delighting the employees and ensuring that we're putting money in their hands in the account that they use, and not on a gift card.
BOH: What do you say to an operator who's skeptical about why Kickfin can help their business? How do you contextualize that for them?
BH: By putting our money where our mouth is. Let me explain why and how. So first off, there are a myriad of ways to prove ROI with Kickfin. With branch closures happening across the United States, coupled with the long COVID lines to pick up cash, managers’ time isn't best spent being a courier. Managers’ time should be spent optimizing for training employees, hiring, and dealing with customers. Now, when we look in higher minimum wage states, such as Washington or California, employees around the clock waiting for their cash tip distributions gets expensive. Ten employees waiting around for 10 minutes is 100 minutes of labor waiting for their tips.
But let's put all that aside. All restaurants have their own standard operating procedures they've optimized in certain ways. That is why with us, we always do no contracts, ever. We want to earn business, month in, month out. Number two, we do no setup. We don't feel that a restaurant needs to put upfront capital into using our service, ever. And number three, we're going to give you the first month for free. And I think that's telling, because instead of us sending you white paper after white paper, case study after case study, we put it in the hands of the user.
At the end of the 30 days, we ask all three stakeholders — the employees, the managers, and corporate, because each has their own benefits of our system — was it worth the price that Kickfin is charging? I will say we have a perfect batting average. Nobody goes back to cash. As I'm sure you can imagine, thinking about even doing another bank run, building another envelope, or keeping track of a manual ledger, and even the excess accounting hours trying to figure out why cash is off by x or y, it's not worth the headache. We always say, “Let us show you first, on us.” And that's been a great go-to market for us, because it's provided us the ability to earn a lot of the trust of restaurateurs who are used to being hit with setup costs, three-year contract commitments, going in blind on a product. We're saying, “Let's get rid of all three roadblocks there and use the product.”