Jeff Paterson has coined the term “currency exchange on steroids” to describe Fourex, the business he has developed alongside co-founder Oliver Du Toit. The reasons for this are obvious, when you consider its aims of speeding up the process of exchanging money and enabling it to be done on a much bigger scale than ever before.
The self-service Fourex kiosks accept unsorted coins and notes (including those out of circulation) from over 150 currencies and convert their value into either pounds, euros or US dollars. It can accept the smallest denominations and each coin is evaluated in a fraction of a second. Paterson said there were no hidden fees or commissions – profit is made on the difference between the buy and the sell rate.
For everyone who winds up with random coins or notes left astray in their wallets following a holiday, it’s a useful solution without much effort needed. Paterson thought of the idea when he discovered over $500-worth of coins and notes in assorted drawers of his, that had been lying around for years. Anecdotal evidence suggested many of his friends had similar situations and indicated there could be quite the untapped market for these leftover coins and forgotten odd notes.
“Our research indicated that over a billion people travel internationally every year and it turned out there was an estimated £3bn of foreign currency that was lying dormant in UK homes alone! We knew this was an opportunity that the big currency exchange companies were missing,” Paterson explained. Others hadn’t tried it before because of the complexity and variety of coins in circulation – as Paterson pointed out “it takes too long to identify and value each coin, and this removes any potential profit”.
Paterson and Du Toit assessed how to develop high-speed recognition technology that circumvented that problem, so Fourex can now process huge volumes at low costs. The exchange rates are updated daily in line with market trends and are clearly displayed on the kiosks – “enabling complete transparency” according to Paterson. The two co-founders both bring different elements to the business – Du Toit’s specialty is “the tech side of things” according to Paterson, while he takes on the “frontman of the business” role.
Despite being at its early stages of business life, Fourex has already taken some significant steps, with impressive prospects on the horizon. It has secured contracts with Transport for London and Westfield London, which will see the kiosks unveiled at tube stations and shopping centres in August. It seems difficult to think of two better options to cultivate rapid and extensive exposure to the machines – Westfield sees over 27m visitors each year.
There wasn’t quite such monumental movement when it first came to realising their ambitions, however. While Paterson said many potential investors were intrigued by the idea, they weren’t totally convinced. “Our concept is completely different to anything out there and traditional VCs and business angels all wanted us to prove our concept before jumping on board,” Paterson explained. “Everybody loved the idea, but couldn’t compare us to anything, so told us to come back once we had sufficient data to remove the risk.”
So, like many others, they decided to take a punt at crowdfunding as a means to financing their aims. The opportunity to place the idea in front of the exact people they needed to see it was too tempting to resist. Even so, the response by March 2015 totally surpassed any initial expectations or hopes.
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“Our idea clearly resonated with the general public and within six days we had reached our target – eventually overfunding by 244 per cent in under two weeks,” he said. Fourex received £671,450 worth of investments through this method of funding, proving it to be an invaluable platform for the business.
A nice additional touch to the services provided by Fourex sees the option for customers to donate part of, or even all of, their exchange to one of six charity partners on board – UNICEF, The Railway Children, The Guide Dogs for the Blind Association, The London Transport Museum, EllenorLions Hospice and the UK Stroke Association.
Most recently, Fourex has also hit the final stages of Virgin Media’s Pitch to Rich competition, providing the opportunity for smaller startups to notch up some exposure, while the winner collects prizes including a £150,000 marketing campaign along with mentoring and business advice from Virgin Media. So far, though, the biggest step for Fourex has undoubtedly been securing the two big contracts with Westfield and TfL. Paterson agreed that Transport for London is “an opportunity of a lifetime”, because it has a footfall of over one billion passengers every year.
Combined with the belief that Fourex has “built a product that will appeal to a large percentage of the people walking through the stations everyday,” this could be a route to increased expansion for the business. “We hope to place our machines in as many stations as possible…as soon as possible!” Paterson added. “The idea is to franchise all over the world, and we’ve already had approaches from three regions.”