Yaacov Martin's Jifiti, a buy now, pay later, white-label, point-of-sale financing system for ecommerce, evolved from a gift registry business idea into a thriving company that's leveraged financial backing with major retailers and retail holding companies to find a sweet spot in a growing industry

Martin, the company’s CEO and co-founder, says a decade ago, as he and his two partners set out to launch a gifting platform for U.S. merchants, they saw other voids that existed across the gifting market.

“We very quickly realized that when you sell to a merchant, specifically a large merchant, the point of integration, meaning the point at which you say, My product can perform these services, can offer these features, but I need to integrate into your systems — specifically enter your point-of-sale system — that became a tremendous hurdle, sometimes killing the deal completely and other times delaying launch for a very long time,” Martin says. “And we actually have to go back to the drawing board and we had to figure out what do we do in order to ease that pain of integration? What do we have to do in order to minimize the need for integration or eliminate the need for integration? And we came up with quite fundamental infrastructure that allows us to do this — for example, utilizing virtual cards on the various networks etc. So, we built out a layer of infrastructure that allowed us to cater to that challenge of point-of-sale integration and on top of that infrastructure we built out our gifting product and we ran that business for a few years and we grew it.”

Through that process, they learned a lot about the market and themselves. For example, he says they learned that they are very good at long sales cycles and building the trust those require. But they also realized that they were holding on to an infrastructure that was much more robust than what they were applying it to.

“There were so many other applications that were critical to our clients, to our partners,” he says. “And about four and a half years ago, we took our entire gifting business and we put it into one of our departments, essentially allowing it to operate as a standalone line of business, and took about 85 percent of the company's resources — manpower, and I would say ambition — and poured it into this space of buy now pay later. At the time, we didn't refer to it as buy now pay later, we called it consumer finance. Many of our clients and partners also assisted us in understanding where their pain points lie in the consumer finance world. They explained to us that finance at point of sale is often critical to their business. And since you are essentially bringing together three parties, not two — you have the banking or lending financial institutions on the one side, you have the merchants on the other and you have the consumer on the third — that triangle requires real time activity that takes place at point of sale. And integration into point of sale to allow all this to happen is a very tedious, long and expensive process. With our infrastructure we figured out that we are really able to eliminate many of these hurdles to allow both of the sides of the business, meaning banks and merchants, to scale. And that was the beginning of today's Jifiti.”

Despite the fit, Martin says there was hesitation to pivot from the initial concept, with the team considering the move over some five years before making the pivot.

“There was a tremendous amount of deliberation,” he says. “And I am quite proud to say that we made the very brave decision to go in full heartedly knowing that we had what to lose, but knowing that there was so much more to gain.”

Martin spoke on the Smart Business Dealmakers Podcast about the pivot from the original business concept and how Jifiti has grown since.