It is common among friends to pay for each other when they go out or they are living together. Someone in the friend's group often fronts the payment for utilities, cable bill, or food bills. But that creates a hassle of splitting money and paying them back. Ysplit, a startup launched by Y Combinator has come up with an application so that one has to never owe anyone any money.
The application supports a virtual card that takes care of all the money splitting and automatically deducts money from everyone’s account. So, the next time you go out with your friends, you don’t have to deal with the hassles of paying back to the one person who usually fronts the payment. Instead of someone taking charge of paying the bills, the app would instead use Ysplit’s virtual card.
“We front the payment and as we’re fronting payment, we’re ensuring everyone on the card has enough money,” Ysplit co-founder TundeAlao told TechCrunch. “We authorize the payment and then charge everyone at the same time.”
While the app is totally free for the users, it generates profit through interchange fees. It charges the utility providers up to 2% of the transaction. Ysplit was the idea of three roommates who were interning at Google. They came up with it to keep their shared finances more organized.
Their first startup together was Cluttr, which was similar to Splitwise. There are many such apps that allow tracking bills and other expenses between friends. “We created something to track how much we owed each other,” saidAlao. “It got quite famous in the U.K. but we realized we’re not solving any problem by helping people track how much they owe each other. We wanted to stop people from owing each other entirely.”
The app is presently focused on payments for utilities among roommates or friends but plans to add more features in the coming future.