FaceCash’s Aaron Greenspan Is Out to Kill Plastic with Mobile Payment System
For Aaron Greenspan, president and CEO of Palo Alto, CA-based Think Computer Corporation, it’s been a long road to FaceCash. The mobile payment system, which next week launches a new feature that allows shoppers to place orders before they even arrive at a store, is the result of years of work that started when Greenspan founded the company as a 15-year-old high-school freshman. It’s not a typical Silicon Valley start-up story, but he’s not a typical entrepreneur. “It’s not the kind of thing where you see a lot of people working on ten-year projects,” he says. “I see that as medium-term. I like big problems.”
In 1998, as people were flocking to the Internet, Greenspan started helping companies and individuals get set up on the Web. Soon, he had enough work that he decided to incorporate to protect himself. “I was anxious to do something other than homework, and I also didn’t want to get sued for fixing a company’s computer and find out I had given them the wrong diagnosis or something.”
Fast forward to college, and Greenspan was working on creating the predecessor of Facebook at Harvard—a Web service he called houseSYSTEM, with a social networking feature called the Face Book. According to Greenspan, houseSYSTEM predates Mark Zuckerberg’s facebook.com by about four months, and Zuckerberg was an early subscriber. Greenspan detailed the whole story in his self-published book, Authoritas: One Student’s Harvard Admissions and the Founding of the Facebook Era.
As all of this was going on, Greenspan was also working on the problems of the family business. The company sold promotional products like T-shirts and coffee mugs, but had a “really awful” order management system. So from 2001 to 2009, while finishing up college and then developing custom software for companies, he tinkered with ways to improve the family’s homegrown accounting system. But after all of that time and effort, he had a problem. “Most companies don’t want accounting software from a startup,” he says. “It’s risky enough even buying it from a big company.”
At the same time he was trying to figure out what to do with all the work he’d put into this accounting program, he was also shipping 100 copies of his book around to people he thought might be interested. Standing in line at the post office with 100 packages to send didn’t appeal to him, so he decided to ship them through media mail, a cheaper way to send books, CDs, and DVDs through the U.S. Postal Service. Media mail uses a specific type of barcode called Code 128-C. If the post office could use them and airlines could use them, so could he. “It kind of just clicked at that point,” he says. “If you could use barcodes for boarding passes, why not use them for payments?”
With an accounting backend already built, it wasn’t long before Greenspan was able to launch FaceCash, a mobile payment system that allows merchants to accept payments by scanning barcodes off of shoppers’ phones. “The basic idea is that carrying plastic is kind of inconvenient for consumers and a giant nightmare for vendors because it’s so expensive to process,” he says. Every time merchants run a credit card, they pay between 3.2 and 3.5 percent in interchange fees to the card company. But FaceCash is linked to bank accounts and works more like a debit card—you transfer money from your bank account to your FaceCash account—and FaceCash charges vendors a flat fee of only 1.5 percent per transaction.
The system also retains data from the sales and integrates with the ThinkLink accounting network, free accounting software for merchants who use FaceCash. “If you did all of your sales through FaceCash, at the end of your year you can press a button and … Next Page »