Koho, a Vancouver-based FinTech company, has announced three major agreements with Visa, Peoples Trust Company and Galileo Processing to deliver modern, no-fee mobile banking service to millennials. Koho will offer Koho-branded Visa prepaid cards issued by Peoples Trust Company with Galileo providing transaction processing services. The FinTech firm will launch its banking service in Canada in about two months, according to the company official site.
Koho is a financial technology company that provides simple, modern banking to Canadians. Koho’s technology allows users to make purchases everywhere Visa cards are accepted and provides access to a suite of other products, such as direct deposit, ATMs, bill pay, free transfers and more.
In essence, Koho is a sophisticated prepaid credit card. Consumers are provided the card and then they can fund it through direct deposits to their account or via e-transfers. Client funds are held with a partner credit union. Koho receives revenues as a percentage of merchant charges on payments when the card is used.
The users can monitor their spending on the Koho mobile app or online site. The company provides an additional service where the consumer can enter savings goals or filters that notify them when they are spending too much.
In May, the company closed a $1-million seed round, led by Ferst Capital, Hedgewood, Stanley Park Ventures and notable angel investors such as Joe Canavan. In April, the company won the NASDAQ FinTech Innovation Award for the “Best Financial Technology Company.”
"With Visa, Peoples Trust and Galileo, I really feel like we’ve put together a world-class team,” Daniel Eberhard, CEO of Koho, said in the press release. "Visa is a market leader, one of the most recognizable brands in the world and allows our users to use Koho anywhere Visa is accepted worldwide. Peoples Trust Company is a leader in the issuance of prepaid payment cards and Galileo is one of the most technically advanced processors in the world. More importantly, all three organizations have demonstrated a real commitment to our vision to make banking simpler, more affordable and more transparent.”
“We think Canadian consumers need to raise their expectations," Eberhard said. "It’s not just about core functionality, it’s about understanding your financial position and providing the tools to help you improve it. Whether you're saving for travel, a dog or a house, Koho can help you get there faster."
“Visa prepaid cards offer security and the convenience to pay wherever Visa is accepted,” said Chris Ferron, Sr. Account Executive of Prepaid at Visa Canada. "We are pleased to work with companies like Koho and Peoples Trust to bring innovative products to new users.”
Peoples Trust is the issuing bank (that is bank-speak for the financial institution that holds the money) and currently manages more than $6 billion for Canadians already and has more experience launching these types of products than any other issuer in Canada.
“FinTech is an emerging financial services sector that we have been following closely. We are excited to partner with Koho to bring their innovative banking and budgeting alternative to millennials,” said Peter Read, President of Peoples Card Services. “We anticipate this being a very popular product.”
As we have already seen, many new FinTech startups have proved themselves to be disruptive and competitive for traditional financial institutions like banks. Koho, the new online mobile bank, seems to be a new game changer in the banking space.