Alternative Payment Solution
Kurrenci, a New York City-based startup enabling consumers to shop online with virtual currency, is the Best Alternative Payment Solution in the 2013 CNP Awards, according to an online vote of customers. The virtual currency is pegged to the U.S. dollar; consumers buy each unit of Kurrenci for $1. But, each merchant is able to set the “exchange rate” for Kurrenci in real time through their online dashboard. This allows them the flexibility and control to manage their customer acquisition costs and reduce excess inventory as needed.
“When you get it, a Kurrenci is 1-to-1 with a dollar,” explains Nathan Hecht, CEO of Kurrenci. “Depending on where you use it, each store has a different exchange rate with a minimum of $1. If I’m an e-commerce merchant who wants to increase traffic at my store immediately, I can say, ‘today Kurrenci is worth $1.10 at my store.’ It’s a real-time platform they can immediately use to increase customer acquisition through value.”
Particularly for small to mid-sized merchants, it has become increasingly expensive to acquire a customer, Hecht says, while customer retention rates have been decreasing, reducing the long-term value of that customer. It has become prohibitively expensive for these merchants to compete with the “big guys” through marketing initiatives like pay-per-click advertising. In desperation, merchants have turned to affiliate networks and marketplaces, giving away up to 15 percent of their margins without acquiring a long-term customer. Kurrenci says its “social-commerce” platform gives the merchant an opportunity to reach consumers when they are ready, willing and able to shop.
Merchants reach Kurrenci users through the company’s Website and through outbound marketing like email to promote the value of their currency and draw them to the retailer’s site. Kurrenci says it has moved the discount from the item (or person) to the instrument of payment and Kurrenci members automatically see the savings applied at checkout.
Consumers can buy Kurrenci online using a credit card or via ACH transfer. They can earn Kurrenci—now from the company itself as a reward for “preferred actions” and soon from merchant partners as part of promotions. It does not cost anything for merchants to accept Kurrenci and the company predicts it will make cross-border transactions seamless as it expands internationally.
“Our goal is to position Kurrenci as the currency of the internet,” Hecht says, “which will eventually be used in all the ways that people want to use money online.”