A lot of babies have recently been born at “Globes”. A first child, second child, and so forth. The joy is great, but is unclear whether Nitza, the secretary and primary producer at the newspaper, shares it. Do not misunderstand me; Nitza is like the mother of all of us. When a new baby joins “Globes”, she is the first to send congratulations, but she also has a task - somewhat annoying - which is to collect NIS 10 from everyone willing to help pay for a gift to honor the newborn.
This is how it works: Nitza sends an email via the newspaper distribution list, inviting anyone who wishes to share in the gift for Irit’s new baby boy, Gali’s girl, Gur’s girl, and so one, and to send her NIS 10. Everyone goes to her, gives her NIS 10 (no change for a NIS 100 banknote, please), she opens a plastic bag, puts the money inside (causing the bag to eventually rip), and writes the donor’s name on a list. Lately, Nitza’s cabinet has been full of such plastic bags.
The app of Paybox might help Nitza. Paybox, founded in January 2014 and currently with six employees, has developed an app for social payments; i.e. collecting money from a group of people and making a deal (such as buying a gift) with the money. The company was founded by CEO Tal Grinberg, VP marketing Udi Liberman, VP development Omri Hapner, and COO David Rahamim. The company has raised no capital since it was founded, and was included in the third class of Citi Accelerator Tel Aviv, and the first class of the MassChallenge Accelerator in London.
“Take, for example, a group of women who want to organize a bachelorette party for their friend who about to get married,” says Grinberg. “Dana lives in Eilat, Chen lives in Tel Aviv, Rina lives in Yokne’am, so on. Collecting money from them, say NIS 190 each, is quite problematic. Our app streamlines and simplifies the process, because it makes it possible to open a dynamic bank account for the group. This isn’t a solution that an ordinary commercial bank knows how to offer.”
The app works as follows: the group organizer downloads the app, through social networks, and each member uploads his or her credit card number to make the payment. In other words, it is similar to an ordinary credit card transaction, which means that the monthly statement shows a charge to Paybox. “In this way, each member of the group can track the cash movements in the social account. There is complete transparency, in contrast to the current situation in which it is not really possible to know what is being done with the money,” says Grinberg.
If, when the process is over, and it turns out that less money was needed by the group of women - say NIS 170 rather than NIS 190 - the group manager (a person, not the app) credits each member the difference through the credit card company. “The app currently works by debit/credit and/or bank transfer. We cannot yet work with businesses, but that is our goal,” says Grinberg.
He says that, to date, the app is not necessarily used by one-off groups, such as for organizing a bachelorette party. “The main groups using our app are groups for buying gifts, as well as rolling groups such as kindergarten parent committees, apartment bloc committees, and members of shared apartments who jointly manage the utilities (water, electricity, municipal taxes, etc.), and joint trips.”
“At the moment, our business model is to charge 2% per NIS 5 for each incoming transaction. In other words, we collect NIS 2 from a group member who transfers NIS 100,” says Grinberg, adding that 50,000 transactions totaling NIS 2.7 million have been made through the app to date. “The business model will likely change in the future. Currently, the app is only active in Israel, but we will shortly launch it in England.”
Paybox did reinvent the wheel with its app. Two foreign companies are doing something similar: France’s Leetchi, which was recently acquired by a French bank; and Tilt, which operates in the US and Canada.
Published by Globes [online], Israel business news - www.globes-online.com - on November 5, 2015
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