Portland payments startup Kuto is teaming with the city of Portland and others to get $500,000 into the hands of residents to spend at small businesses.
Through the Kuto mobile app consumers will be able to claim $50 gift credits that can be spent at small businesses within certain targeted neighborhoods.
The first activation is an event May 4 at Pioneer Courthouse Square from 11 a.m. to 2 p.m. People who are in that location can activate the cards to spend at businesses in downtown. The measure, called Downtown Workers Are Here for Portland, is meant to encourage workers returning to offices to spend with local businesses who have been hurting through the pandemic.
Funds for these initiatives are from federal and local Covid-19 pandemic relief programs. There are 100 downtown restaurants and retailers participating.
“These dollars and customer relationships will make a difference to shops and restaurants that have been hardest hit during the pandemic,” said Mayor Ted Wheeler in a written statement. “I want to extend a warm welcome to those returning downtown for work. Your presence is critical to the revitalization of the city.”
The next activation is in the Foster-Powell neighborhood at the Portland Mercado on May 7. In total the program aims to distribute 10,000 digital gift cards. The initiative is organized by the city, Worksystems, Prosper Portland, Business for a Better Portland, Portland State University, Bricks Need Mortar, Downtown Clean & Safe and Kuto.
The Kuto app credits are available on a first come, first served basis. If after two weeks they aren’t used the credits expire and the money cycles back into the system to be given out, said Kuto co-founder and CEO Kiyo Kubo.
Signing up is easy for both the consumer and the business, Kubo said.
Kuto is a payments app that connects a consumer’s bank account to the Kuto platform. When the consumer enters a business that is on the platform they can complete a touchless transaction. For instance, if someone walks into a brewery they can order a beer and food and when they are ready to pay, their Kuto profile appears on the business’ point of sale terminal, the business confirms the person there matches the face on the profile and the transaction can be completed. The money is taken directly from a bank account and transferred to the business.
The idea is that it helps businesses cut out fees associated with credit and debit cards, said Kubo. These transactions are akin to writing a check in the way the money is transferred, which is to say this app does not use the blockchain or cryptocurrency on the backend.
As the company has developed its payments platform it has also created a way for organizations to create gift cards to support local businesses and a way for local businesses to offer rewards to customers to encourage return business.
Last fall, it participated in a similar program with the city and others to encourage students returning to Portland State University to spend at downtown businesses. Last holiday season the company partnered with the group Bricks Need Mortar for gift cards to boost sales to local retailers.
“Kuto is Portland’s answer to big banks,” said Kubo in a written statement. “We move money between consumers and the local businesses for about 65% less in merchant fees than it typically costs to do it with a credit or debit card, and businesses are happy to give that back to their regulars as rebates on their next visit. Paying with Kuto benefits the local businesses and any customer who uses Kuto.”
Kubo and co-founder Nick Farina are familiar faces in the Portland startup community. They previously founded Meridian, a location-based app that was acquired by Aruba Networks in 2013. Once they left Aruba in 2017, they began working on a payments idea. However, that payments idea was derailed by the pandemic.
Kuto, which launched in 2020, ends up being a combination of these two areas of expertise that the duo have developed: location and payments.
The Kuto app has about 600 businesses across its platform. Those businesses are in Portland and Corvallis. They are hoping to roll out to other Oregon cities this year.
