Cinchkey Aims to Ease SMB Cashflow Problems by Tapping Best Customers

bizownerHoliday shopping season is a time when many businesses can count on heavy sales volume — it’s the rest of the year that’s a problem.

This is what Cinchkey, formerly known as Credithood, has set out to solve. The company launched in 2014 in Israel, but has since relocated to New York and is adding staff for a U.S. push in 2017. Cinchkey’s app allows customers of a business to pre-purchase goods or services at a discount, and also pad the merchant’s bank account to help them weather leaner times. “It’s a win-win for merchants and the customers and the banks that serve them,” CEO Maya Komerov told Bank Innovation. “25% of small business have only two weeks cash reserves.”

Cinchkey — as Credithood — won Bank Innovation’s DEMOvation Challenge in Tel Aviv in 2015. The 2016 winner was PayKey.

The model bears a broad resemblance to Starbucks’s card and app, both of which users preload with funds that they then spend. Starbucks has $1.4 billion in cash as a result of this, Komerov said. Cinchkey’s app is different, in that it is not branded for a particular merchant, but rather contains participating merchants based on a user’s location. The company is interested in fostering community and partnering with banks and others, that support local merchants.

The location-based aspect of the app also allows for users to be introduced to new businesses. Users get bonuses for referring friends, and larger bonuses for referring businesses. Businesses receive funds paid on the Cinchkey platform within two days. Komerov referred to it as being like a loan, but without interest, and one that deepens customer engagement.

Cinchkey has a Messenger chatbot in the works, and an “intelligence” layer underneath its app to recognize patterns and help optimize the experience for all parties.

In the future, Cinchkey can leverage the data it will be gaining — which will be considerable if it scales — to personalize offers and create additional services for merchants and the banks that serve them.

Coffee shops remain a prime use case. Certainly few products engender as much loyalty as that lifesaving morning elixir, but replicating the “Starbucks” experience has proven extremely difficult for…just about everyone. But Komerov is confident of her product’s value proposition and not intimidated. “You’re serving the most loyal customers, and helping merchants and communities,” she said.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism, which makes him quite old. He can be reached at

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