- PayPal executive Kathleen Pierce-Gilmore left the company in October to join Raise, a gift card marketplace startup, as chief operating officer and president.
- Pierce-Gilmore, who grew up poor, thinks Raise can disrupt the credit industry in ways that PayPal and traditional finance companies can’t.
- The COO and president was one of three executives hired around the time that Raise got $US60 million in funding — including an investment from PayPal.
Gift cards may not be the most obvious place to disrupt the banking industry, but Kathleen Pierce-Gilmore doesn’t see it that way.
After two years as the vice president and general manager of PayPal’s US credit division, and over a decade spent between American Express and Capital One, Pierce-Gilmore decided to leave corporate America to join Raise, a Chicago-based startup that runs an online gift card marketplace.
And it’s all because she thinks Raise can have a serious impact on how low-income families manage their finances.
“I grew up incredibly poor and below the poverty line. I didn’t realise it when I was younger, but it created a very strong condition in me of financial discipline,” Pierce-Gilmore told Business Insider. “I started to have this growing need to help others have that same sense of financial security.”
Pierce-Gilmore, who has spent most of her career in credit divisions across the financial industry, thinks prepaid cards could be a key step in helping low-income consumers escape heavy credit debts — the type of which she saw often when working at as a vice president at Capital One.
“Capital One serves some of the most vulnerable people in America. I learned during my time there that a lot of people that worked there didn’t have a deep appreciation of how their products impacted their customer’s lives,” Pierce-Gilmore said.
“The opportunity I saw at Raise was a bit more pure. There’s no credit aspect, it’s prepaid. There isn’t the kind of bad out come possible, where someone can get in over their head,” she said. “I believe technology is the better way to deliver financial services to more people and more fairly.”
“We’re not hurting anyone, only helping”
Raise was founded in 2013 by CEO George Bousis, who launched the company as a place where individuals could sell gift cards they no longer wanted in exchange for cash.
It’s since expanded to include discounted gift cards directly from retailers like Macy’s and Fandango, which sell the gift cards for less than their cash value. Dunkin’ Doughnuts, for example sells $US50 gift cards for $US40.50 — a 19% discount. Others, like Amazon, only discount their cards by 1.1%.
Raise makes a transaction fee on each purchase, and the retailers benefit because they don’t have to pay credit card fees on purchases made with their gift cards. Raise is also working on various data and marketing products aimed at these retail partners.
Customers also benefit from the often deep discounts, and convenient budget management that comes with pre-paid cards.
“We’re in a unique position,” Pierce-Gilmore said. “We’re not hurting anyone, only helping.”
Pierce-Gilmore joined the growing team of 200 in October, around the same time as two other poached tech executives — chief people officer Tenia Davis, a Harpo alum who joined Raise from her role at iManage, and chief marketing officer Gaurav Misra, who joined from Vroom.
All three execs were hired around September, when Raise announced $US60 million in series C funding led by Accel Partners, which included an investment from, coincidentally, PayPal.
Now, with her staff in place and ample funding in tow, Pierce-Gilmore is on a mission to make Raise the go-to place for shoppers looking to manage their budgets with prepaid cards, as well as retailers looking for an escape from the high transaction fees that come with processing credit card payments.
“There is so much room for disruption. I love PayPal, and I think they’re doing great work globally. However I think that they’re not disrupting the ecosystem as much as they might have had the opportunity to,” said Pierce-Gilmore.
Pierce-Gilmore believes that Raise can someday have the large-scale presence of companies like Amazon, in which checking the Raise app for discounted gift cards becomes a natural part of any and every shopping process.
“I’m already finding my own addiction driving my own behaviour,” she said. “Every time I am trying to buy something, I look in the category that I am going to shop in.”