More than that, the startup has secured a partnership with Visa to give it a boost out of the starting gate.
Koho seeks to provide free banking services to millennials, while also giving consumers transparent access to their financial data so they know exactly where their money is going. Koho appears to be consolidating things so you no longer need several apps to accomplish these various tasks.
Once an account has been activated, users will receive a prepaid Visa card issued by Peoples Trust Company, which can be used anywhere Visa is accepted. The idea is to load the card with just the funds needed to get by until the next paycheck. The expectation is that some money is being put away for savings, which Koho said that it’ll do for you automatically. All transactions made with the Visa card will be recorded within Koho, which provides the tracking needed to encourage financial discipline.
There are no costs for customers to use the Koho service, but the company does charge merchants when the Visa card is used. Through its partnership with the credit card provider, Koho receives a percentage of the interchange fees. In addition, revenue is generated from banking partners through currency exchange and out-of-network fees. However, the company says that none of these fees are passed along to customers.
Koho’s launch comes after more than two years of development and beta testing.
Right now, Samsung Pay, Apple Pay, and Android Pay are not supported, but Koho said that the company plans to include them eventually, starting with Apple Pay in the late second quarter.
Additionally, the company has raised USD 1.95 million (CAD USD 2.6 million) in venture funding from the founders of Hootsuite and Shopify, along with Power Corporation of Canada, Gil Penchina, and Stanley Park Ventures.
Koho is available on iPhone from now on, and an Android version will launch next quarter.
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