We’ve been there before. All that spare change in a foreign currency weighing down your pockets, trying to spend it all at the airport before you exit the country. But not all currency exchange places accept coins, and the low denomination notes are barely worth converting. That’s when you consider buying an exorbitantly-priced cappuccino or a garishly-designed fridge magnet. The money will be useless to you in an hour anyway.
But what if you could hold on to that spare change and redeem it for something that’s actually useful? More money in your PayPal account, for example? Or extra Skype call credit? Maybe even a Nike gift card? Israeli startup TravelersBox hopes you’re the type to spend wisely. It doesn’t want you to consume for the sake of consuming. It trusts you understand the value of hard-earned money and spending it in a utilitarian manner.
At some airports you’ll find machines developed and operated by the startup that allow travelers to deposit their spare change and redeem it from brands such as Starbucks, H&M, Skype, Paypal, iTunes, Google Play, GAP, and countless others. There’s no need to pre-register with the service, nor go through a cumbersome verification process.
TravelersBox was founded by Dror Blumenthal, Idan Deshe, and Tomer Zussman.
“[Zussman] lived in New York for six years and would constantly fly back and forth [from Israel],” says Blumenthal, co-founder and chief marketing officer. “Idan and I visited him in the US a few years ago and saw he had half a million quarters, nickels, and other coins. We broke out in laughter.”
Jokes aside, the three founders, who are childhood friends, soon understood their irritation was similarly experienced by other frequent travelers. Zussman indicated to his friends he wanted to invent “a kind of an ATM machine” that would accept these bulky coins and transfer the amount to individual’s bank account or credit card. “We thought it was a great idea, and as we had some prior entrepreneurial experience, we immediately started to investigate and research,” says Blumenthal.
However, it wasn’t easy to crack. The entire process from concept to execution took the entrepreneurs almost two years to complete. From an early stage they understood transfers to individual bank accounts would be impossible to include, due to heavy transaction fees and commissions. “To deposit and wire five dollars, you need five dollars,” he explains.
The startup’s big break came after they met with TAV Airports, which operates airports in seven different countries, including five in Turkey. By this time they had a working prototype of their product, which they demonstrated to the CEO of the firm. The meeting went well and TravelersBox inked an agreement to open its first kiosk in Istanbul’s Ataturk airport shortly after. This was about two years ago.
Despite leaping the first hurdle, the startup had to face other obstacles as well. One of the most pressing issues was understanding how to communicate the solution cogently and succinctly to passengers. Busy airports are multilingual and multicultural and the uniqueness of the product meant it was unlikely users had prior knowledge of similar services. “It took us a few months to understand how to crack it,” admits Blumenthal.
In the efforts to understand the target audience, Blumenthal says they spoke to hundreds of people, sent thousands of emails, and constantly tweaked the user interface to make the process as simple as possible. “What we discovered after speaking to users is that when we talk about the problem, they understand the solution very easily. If we say on the poster, ‘Left with Turkish money? Transfer to PayPal,’ people get it,” he explains.
Kiosks in Istanbul (left) and Milan (right)
Eventually, the startup settled on English as the primary language for communication. It is the first language to appear on the kiosk screen, as well as the language used for advertisements and posters. All in all, a total of ten languages are supported by the kiosk, and users can opt to switch from English simply by touching the screen and indicating their preference.
Settling on a particular language will also result in the machine recommending products which you are more likely to use. For example, if someone chooses Russian, the options that first pop up are Qiwi and Yandex Money.
The entire transactional process is also simple and efficient. If, for instance, you deposit about US$10 in loose change, a screen will confirm the amount and guide you to a number of available options to redeem the cash. After indicating your preference, the screen will prompt you to input an email address or mobile phone number. TravelersBox will proceed to email or SMS you a web link which redirects the user to brand-specific requirements. If you chose PayPal, then you will have to enter your existing account information for the money to be credited.
Similarly, if a user opts to receive a Nike giftcard, then one will be generated and sent to your email account. TravelersBox will take a cut per transaction, in the range of seven to eight percent, depending on the amount deposited. There’s no minimum amount, but the maximum amount travelers can redeem is US$800. “That’s due to regulation and money-laundering rules,” explains Blumenthal.
To ensure there’s no minimum deposit amount, the startup only works with brands that have the same view. “If users have four cents and want to deposit that amount, they can do so. We can’t work with companies that are giving us denomination numbers, as we allow one cent and above,” he stresses.
The most popular choice is PayPal, representing approximately 60 percent of all transactions.
TravelersBox kiosks accept the US dollar, Euro, British pound, Phillipines peso, Russian ruble, Turkish lira, and Georgian lari.
Author’s useless Thai coins
Since the deployment of its first machine in Istanbul, TravelersBox has expanded to Ankara, Izmir, Manila (Phillipines), Milan (Italy), Capetown and Johannesburg (South Africa), and Tibilsi (Georgia). In the next few months, further kiosks will be up and running in Australia, Japan, and India. Blumenthal says the team is looking to scale aggressively across the globe.
Surprisingly, TravelersBox has no presence at Ben Gurion International – Israel’s biggest airport located in Tel Aviv. “It [Ben Gurion] is a small airport and less of a priority for us even though the founders are Israeli,” laughs Blumenthal.
The startup has raised approximately US$5 million in funding and is backed by angel investors from Israel and the US, as well as VC firms Global Blue and Pitango.
How many monthly users does TravelersBox currently process? Blumenthal does not reveal a global figure but says the busiest location in Istanbul witnessed approximately 40,000 “interactions” last month. The conversion rate of these interactions is 18 percent, which means there were a little over 7,000 people depositing money in the Istanbul kiosks alone. Given that the average amount deposited is US$16, we’re looking at some steady revenue streams and growth potential for the startup.
In an effort to diversify its revenue stream even further, TravelersBox also takes a cut from partner companies, approximately five percent of the transaction amount. Blumenthal says the long-term goal is to eliminate fees for customers entirely and only charge the big corporations. “As we get more users, our contracts with the brands are getting even better […] it will take us some time [to cancel fees] as we’re a startup, and we’re talking to big companies so we don’t have much leverage yet. But as we go along we will lower [customer] fees,” he explains.
The startup team in now finalizing an in-house design for a new batch of kiosks. Currently manufacturing of the kiosks is outsourced to China, with TravelersBox responsible for the firmware. All machines deployed in 2016 onwards will be “newer and more beautiful ones,” enthuses Blumenthal. The startup views money exchange booths as its main competition – the team wants you to stop changing money completely. “We’re encouraging people to transact entirely through us.”
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