Kash has been working in stealth mode over the past year with over 200 retailers to refine its liveACH product, a payments API that combines the speed and convenience of credit cards with the affordability of ACH transactions, effectively removing the interchange fees levied by the card networks.

LiveACH is built on top of a proprietary algorithm that underwrites the risk of any transaction and clears it live for merchants, just like credit cards. But unlike credit cards, Kash clears transactions using traditional banking networks. Instead of paying credit card companies 3 or 4% of their revenue, liveACH only costs developers 0.5% per transaction.

The company relies on retailers to prompt card holders to download its user app - which also doubles up as a P2P transfer application - and pays for each inbound lead.

As it looks to roll the product out commercially, the startup has secured a new seed round of $1.5 million led by fintech investment VC Green Visor Capital, bringing total funding to date to $4 million.

Kash has also secured heavyweight backing with the appointment of former Visa man Saunders as chair, and Sam Wen the lead engineer who designed both the original software and hardware at Square as 'development ambassador'.

The company - founded by lawyer Kaz Nejatian, Microsoft engineer Danny Su, and Geoff Flarity, formerly of Morgan Stanley and Oanda - identifies both Venmo and Dwolla as potential competitors, but is dismissive of MasterCard and Visa.

"We don’t fear Visa or MasterCard. They can’t innovate. We talked to a senior executive at MasterCard and they don’t worry about interchange busting',” they say. "They want to become more mobile, but they see no risk to their existing way of processing transactions. We do worry about Square and PayPal. If they wanted to cannibalise their main revenue source in credit card processing, they could take us out. But that’s a difficult business decision for either of them to make.

"We do fear Google and Apple. If they get their act together, they could really disrupt the whole industry. Also, if Bitcoins become mainstream and replace government-backed currency, that would destroy the entire market we are aiming to disrupt."