Syracuse University startup & mobile payment app, ChaChing, readies for launch

SYRACUSE — A Syracuse University–based student startup, ChaChing, is gaining momentum with its peer-to-peer mobile payment application. 

ChaChing came in second place at the Student Startup Madness contest at the South by Southwest Interactive Festival. It’s a five-day event in Austin, Texas, where emerging technology companies come together for panels, presentations, and networking.

The fledgling business is now getting ready to enter the private beta phase with its payment app. The beta phase in software development is where developers find potential bugs in a service. For ChaChing, it will go into this trial-and-error phase privately, due to the nature of mobile security and payment applications. This means that only specific users can access ChaChing, and those users will work closely with the developers to give feedback before graduating to a public beta application.

ChaChing co-creator, Seth Samowitz, says using ChaChing will be as simple as sending an emoticon to a friend over text message. “You’d switch to a money keyboard, just like you would for an emoji keyboard,” Samowitz, a Syracuse University student, says. “The keyboard is the next frontier; there is so much clutter when it comes to apps.”

Users could send their friends money directly from iMessage, WhatsApp, and other similar texting applications without ever having to leave the conversation. ChaChing looks to eliminate the middleman, the application, by incorporating all of the payment in the keyboard. ChaChing says it will work seamlessly with iOS and Android texting devices.

Founders Samowitz, Eugene Chung, and George Balayan met at a hackathon last summer and shared frustration in the interference of other payment applications. 

“I don’t want to get disrupted in a conversation. People will forget to send you the money, but with ChaChing, you’re already talking to them so it’s easier to send it to them,” Samowitz says. “We will be a cashless society and this is the next transition.”

Mobile peer-to-peer payment transactions in the U.S. totaled an estimated 

$10 billion to $16 billion in 2015 and are projected to hit up to $86 billion by 2018, according to Business Insider Intelligence. The size of this growing industry could be lucrative for ChaChing.

“Most people don’t understand from an investment standpoint that it [the market] should be at least a billion-dollar market [to be attractive]. Because if you say it’s a huge market at $100 million, that’s not a huge market. For investors, that’s small. I want to know that you’re going after something that’s got potential to have gigantic effect,” Sean Branagan, creator and commissioner of Student Startup Madness, says. 

Companies making waves in this industry include Google (Alphabet Inc. — NASDAQ: GOOG), Facebook (NASDAQ: FB), and Apple Inc. (NASDAQ: AAPL). Apple will likely incorporate peer-to-peer payment into Apple Pay, a payment system allowing users to pay at brick-and-mortar stores. Shifting from wallets to phones is more convenient for customers, but is also smarter for the economy according to a 2013 Tufts University study. Cash costs Americans $200 billion a year, researchers Bhaskar Chakravorti and Benjamin D. Mazzotta said in the study. This charge includes $101 billion in missed tax revenue due to under-the-table transactions, $43 billion for American consumers through travel time to ATMs and fees incurred at ATMs, and $55 billion in theft and increased security costs for businesses. 

However, these emerging payment applications have yet to answer the question on how they will turn a profit. The operating system for these mobile applications are expensive but Samowitz says he already has made a plan for turning a profit. He declined to provide further details.

Another hurdle for ChaChing is convincing users that the payment application is safe. Cyber security comes to the forefront for users when they are releasing their banking information, and breaches in private account information can halt a startup in its tracks. 

“We are working with a partner who allows us to send and receive money from any bank,” Samowitz says. “If people are uncomfortable at first with giving their information, we may let them use Venmo at first.” Venmo, a peer-to-peer mobile payment service using a free digital wallet, allows users to make and share payments instantly from their phones. 

ChaChing co-creators Chung and Balayan have a combined 20 years of experience in software development. Balayan is a senior software engineer at the media company Bloomberg LP in New York City and Chung is director at Mezocliq, a tech company in New York City.

Because of that experience, Samowitz says he is confident that ChaChing’s security is strong. “They are both genius engineers who use military grade security to back our company,” Samowitz says. “Being a financial tech app, we have to be very, very careful. We don’t touch any of the money. It’s like sending a check.” 

To ensure security, all transactions through ChaChing will expire within 15 minutes if the user does not accept the money. The engineers will also incorporate a transaction-cancellation option where anyone can terminate his or her transaction by 5 p.m. the same day. The money sent won’t be processed until 5 p.m. as well, due to the cost and risk associated with instant payment, Samowitz says. After that, users can transfer their money to their credit card, which can take up to 24 hours, depending on the user’s bank. 

But the real issue isn’t security for the entrepreneurs — it’s figuring out how to go viral. “We’re trying to figure out the network effect,” Samowitz says. “Going viral will be the challenge.” In order for an app to stand out in the sea of programs, a large and loyal foundation of consumers is necessary. 

Branagan agrees and says that investors want to see that real customers are interested. “The defining characteristic for startups is traction. Do you have customers? Do you have downloads? Do you have visitors? All of those things show real people care,” Branagan, a 1980 graduate from S.I. Newhouse School of Public Communications, says. 

Samowitz says he does have the traction and customers and is focusing on college campuses. He adds that he wants to partner with fraternities and sororities across the nation once ChaChing launches. 

“The best way to get a lot of people fast is through college,” Samowitz says. “We are always sending money, and if the money is not in front of us or if the payment app is not intuitive, we won’t send it. We need to get paid now; we’re all on strict budgets as college students.”

Another piece of the payment app’s success will be getting investors’ attention. “After South by Southwest, we’ve had a lot of interest from accelerators in California,” Samowitz says. Accelerators are programs for startups that usually provide about 12 weeks of mentorship, coaching, and education. The programs generally finish with a demo day or public pitch event.

“Right now we’re bootstrapping. We have the $3,000 that we won from Student Startup Madness, and have lots of other money and talks going on,” Samowitz says. The team will compete in other contests including the Whitman Entrepreneurial Idea Award, a competition through the Whitman School of Management at Syracuse University. 

Samowitz is working toward a bachelor’s degree in finance at Whitman as well as a bachelor’s degree in information management and technology at the School of Information Studies and is expected to graduate in 2017. 

Once the team has enough funding, the three co-creators and owners want to make ChaChing their full-time job. “For right now, we are doing it in our spare time, but we want to be full time,” Samowitz says. “We don’t know how it will go privately; Venmo was private for two years.”

ChaChing will stay in private mode until the engineers have finalized the application but expect to launch in June or July. 

“It’s great to dream but you’ve got to execute. We need to get our product out there and get feedback and improve it,” Samowitz says. Eager to push forward, 

ChaChing is allowing consumers to sign up for its public beta on its website at chaching.io.