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Street-Smart Startup Kurrenci Snubs SoHo for Crown Heights

By Sonja Sharp | June 14, 2012 1:56pm

CROWN HEIGHTS — Call it iCash. 

While Silicon Alley insiders drool over Google Wallet's futuristic credit app, a renegade group of coders have snubbed the SoHo silo for a nondescript warehouse on a gritty block between Crown Heights and Bedford-Stuyvesant, working to bring the cash economy into the Internet age. 

Kurrenci, a Brooklyn-based startup whose virtual currency comes online Friday, is hardly the first company to try to mint money specifically for the web — and far from the only one hoping to revolutionize how people spend it across the wired world.

But while anyone who's bought a latte in Brooklyn has probably seen Square, the novel little box that converts anything with an 'i' in front of it into a credit-card machine, and even Duane Reade accepts Google's card-free payments, Kurrenci may well be the first to serve New Yorkers — nearly a million of them — with no credit at all. 

Though the company's founders looked at spaces in SoHo and DUMBO, two techie hotspots, they settled on Buffalo Avenue near Atlantic Avenue in part because it was closer to the heart of their market. 

"We went to the corner bodegas and asked, 'Do people use Western Union or MoneyGram, are they comfortable with it, what’s the average load?'" said Kurrenci founder and CEO Nathan Hecht. "We're talking about Brooklyn — the projects, people who are unbanked and underbanked."

Starting Friday, those people will be able to swap cash for Kurrenci at any MoneyGram location nationwide using a personalized ID code, and immediately spend it online.

For the 13 percent of New Yorkers without a bank account — including more than 15 percent of households in Brooklyn and nearly 30 percent of those in The Bronx — that's a giant leap into the future. Between 50 and 80 million Americans have neither an ATM nor a credit card, effectively barring them from the entire Internet economy. 

"We kind of like it out here where we’re not in the silo," said Mosheh Poltorak, Kurrenci's head of marketing. "In Silicon Valley, you get into a kind of groupthink. Being here really allows us to really stay in touch, because we’re building a product that’s not for techies, it’s for regular people." 

But while Kurrenci may offer the biggest boon to the unbanked, Poltorak stressed the benefits for anyone who spends or earns money online, especially early adopters like those he hopes to meet at Kurrenci's official debut Friday as part of the Northside Festival.

In addition to cash, consumers can trade gift cards and foreign coins for it, buy it outright, spend it on goods and services, send it securely to friends, go in on a gift with a group or donate it to charity. 

"There's lots of things people like to do with money on the Internet," Poltorak said. "Gaming is huge for us — they have a virtual currency that's stuck."  

To start, users will be able to spend Kurrenci at about 30 online retailers, including the homegrown outfitters Necessary Clothing and Neighborhoodies. The company plans to expand its offerings in the fall. 

In approaching merchants to take the novel payment, Hecht and his team purposefully avoided the biggest retailers in each market, creating what he called a "sandbox" for small businesses competing against the Amazons of the Internet world.

"Part of our value proposition is that we’re creating this sandbox where you don’t have to compete with the big guys," Hecht said. "Amazon may be 50 percent, but there’s a million other vendors competing for that other 50 percent. " 

Kurrenci is pegged to the dollar, meaning one dollar buys one unit and each unit is never less valuable than a dollar. Each merchant who accepts Kurrenci can set its value at or above a dollar each day in their store, creating a built-in discount the founders hope will both draw new business to their online retail partners and encourage consumers to spend Kurrenci over credit.

A merchant looking to move unsold stock can offer deep discounts to customers who are more likely to come back to them, making the virtual cash incrementally more valuable than its cold, hard counterpart, Hecht explained. 

"If you come from Paris to New York and you’re buying with the Euro, you’re not so conscious about the price per item, because in the back of your mind you’re like, 'I got an extra 30 percent for my money.'" Hecht said. "You'll shop the way you want to shop, the way a Parisian shops in New York."