Benny Nachman
Founder and CEO, Jassby
Age: 47
Industry experience: 20 years

When Benny Nachman agreed to give his young sons a weekly allowance, he soon found the process a nuisance. He did not always have the right amount of cash, and the children often wanted to spend money downloading video games, something they couldn’t buy with cash. An attorney who had worked in the banking industry before founding the financial technology firm Credorax in 2007, Nachman also knew from his market research that even though children and teenagers now have more spending power, most big banks did not have a dedicated solution for their needs.

These market trends and his own experiences led Nachman in 2017 to create Waltham-based Jassby, a fintech that offers a banking app for families. The app includes a savings account through a partnership with Needham Bank and a no-fee debit card launched late last year through MasterCard. Jassby plans a funding round in the coming months to raise at least $3 million.

Q: What are Jassby’s products?
A: We have a mobile wallet app designed specifically for kids and families. It allows you to set up an allowance either manually or on a recurring, automatic basis – whatever works for your family. We connect three generations. Parents do more around allowances and chores, but also birthdays and holidays, and grandparents mostly do fun things, like holidays and the birthdays.

It’s not just a way to give money. We have several ways they can use the money. The kids can save, and the kids can do good – we work with a list of nationwide charities they can contribute to directly from the app. And then the third thing they can do – and maybe more important to them – is they can spend. We’ve launched a debit card in partnership with MasterCard dedicated to kids and teens. They can use it online and anywhere that contactless payments work. On top of that, we also have a dedicated shop. We call it the Jassby Shop, and you can buy directly from the shop. It’s very curated, it’s very safe, it’s very secure.

Q: How has the industry for this market evolved?
A: Up until very recently – probably, I would venture, even today – the majority of money between grandparents and parents and kids would go in the form of cash or checks. The last few years, with the increase of fintechs like Venmo becoming super popular, you see more solutions similar to Jassby – Greenlight is one, Gohenry is one – that are focusing specifically on the kids and teens market. It’s a very, very attractive and lucrative market. The market is very large and mostly untapped still. What I hope is that Jassby has a better model.

Q: What is Jassby’s model?
A: One of the things that I’m very proud of and we’re working very hard on is not being just a card company. We’re putting a lot of effort and emphasis at Jassby on building a platform and building a community. If you look at a lot of our competitors in the market, what they have is a plastic debit card that they put into kids’ hands, and then they hope the kids spend with it. What they get is the revenue that comes from the interchange fees every time somebody uses the card. It’s a very good business model, but it’s still a little bit limited. A lot of my competitors also charge monthly fees.

In parts of the world, such as Europe for example, regulators have intervened and reduced by regulation how much card companies can charge for interchange fees. This has started a little bit in the U.S. but not to the same effect as in Europe or Israel or in many other countries. I think pressure on lowering monthly fees is coming and will come very quickly, and I also venture within the next few years we’ll see more and more pressure on regulating interchange.

So, I want to make sure that Jassby has more than just a plastic card to give. What we’ve done through the shop is we created a network of affiliates where we can get a commission for the sale. The next level is we have products in the shop that we sell directly, and from there the margins are a little bit higher. My plan is that when the community gets large enough, it will also create a marketplace where retailers and brands will come to Jassby because they want to market directly to my community. By doing all of this, we are able to create on average a higher margin, and therefore it’s a more attractive business. And I can allow myself to give more benefits to my users, starting immediately with not charging them fees, so they benefit from this as well.

Q: What does Jassby have planned for the capital raised in the upcoming funding round?
A: The way I look at it, 2020 was the year that we finished building all the infrastructure that we needed. We launched the card; we have partnerships with banks; we finished building everything that we need to serve our community. Now, we’re going to go and attack the market. We want to increase our share. We also want to find more partnerships and more affiliate agreements so we have more variety of products and services that we can offer to our users.

Q: What else do you have planned for Jassby?
A: Financial literacy is something we as a society tend to ignore, but it’s very, very important. We are also going to be introducing tools to help both the parents and the teens understand where they are in this journey. I don’t like the term “financial literacy” because it makes it sound like it’s something that you have or don’t have, like it’s binary. The way I think about it is it’s a journey. We’ll launch the first tool probably at the end of the first quarter. I think that at times when we try to teach financial literacy, it’s done with some boring lectures and quizzes, and I want more learning by doing – more action, less preaching.

Nachman’s Five Favorite Books

  1. “Empire Falls” by Richard Russo
  2. “The Secret History” by Donna Tartt
  3. “A Tale of Love and Darkness” by Amos Oz
  4. “Zealot: The Life and Times of Jesus of Nazareth” by Aslan Reza
  5. The Mistborn Saga trilogy by Brendan Anderson

A Business Model to Help Kids Save and Spend

by Diane McLaughlin time to read: 4 min