Credit card company Mastercard is on the way to an important cooperative agreement with Israeli startup Jifiti that is likely to make Jifiti a key link in any consumer financing deal by Mastercard in its physical and ecommerce business.
Jifiti's technology enables stores to allow customers to buy products on time payments without the deal going through the store's cash registers management system. The company does not itself lend money; it connects the customers to various lenders and enables the retailer to offer loans in its physical or online store. Financing deals of this type are very common in the US in large-scale purchases, which is very suitable for the chains that Jifiti works with, such as IKEA and Warren Buffett's Nebraska Furniture Mart.
Among other things, Jifiti is aiming at couples that have prepared a gift registry for a wedding, a common practice in the US; the gifts market is believed to amount to tens of billions of dollars. The system enables couples to buy on installments the remaining gifts on their registry that no one gave them as a gift. Another service makes it possible to turn any product in a store into a digital gift that a customer can send by email. The addressee can accept it or exchange it for its value in cash. This product is available at prominent retail chains in the US, such as IKEA, Nike, and Sephora.
Jifiti cofounder and CMO Shaul Weisband told "Globes" that the agreement with Mastercard was based on technological infrastructure built jointly with the credit card company in recent years and would be implemented for the first time in IKEA stores in the US. Five months ago, Mastercard granted Jifiti a license to operate outside the US without the backing of a bank. The companies will sign another distribution agreement in March.
"Under the new agreement, Mastercard will market Jifiti's solution to all the retail stores with which it works - all of them - as the ultimate consumer financing platform," Weisband says. He added that the credit card company would treat Jifiti as "a preferred Mastercard partner," and was likely to invest in Jifiti's upcoming financing round planned for the third quarter.
Mastercard Israel business development director Oz Azaria says, "Under the agreement, Mastercard will help distribute the technology to its customers all over the world as a technological solution for connecting various lending banks to the retail market with no need for integration." Azaria says that Mastercard was introduced to Jifiti in the framework of Mastercard's global startup program, and "there was an immediate click." Jifiti's managers then met senior executives in Mastercard, who were impressed by them and the capabilities that they had developed, leading to more intense cooperation.
"This is a giant step forward for our company, Weiband sums up. "Not only have we won the trust of Mastercard, but this is a terrific business opportunity. While gifts registries are nice to have for retailers, consumer financing is a market in excess of $1 trillion. It's something that every store needs to offer its customers."
Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2018
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