By Richard Giedroyc
In the United States unwanted coins can be fed into counting machines at banks or retail stores, many of these services charging a hefty fee to accept the bulky coins.
International travelers have an even more difficult time getting rid of their coins as they leave a country. Most currency exchange kiosks and banks only accept bank notes. Many of the coins go begging, unless you find a place to spend them at the last minute before you board your plane.
German student Lukas Decker observed the same problem while studying for a master’s degree in management at the UCD Smurfit Business School in Ireland. He received a €10,000 prize when his idea for a foreign coin accepting machine was entered in the inaugural Ireland Fund Business Plan Competition. Today Frank Roche, the deputy principal of the UCD College of Business and Law is on the board of directors of Decker’s business Coindrum. So is Ryanair airlines principal Declan Ryan.
Coindrum is a self-service machine through which foreign coins are accepted, counted, and redeemed for a travel voucher. Coindrum does not charge for the service or discount from the value placed in the machine.
According to Decker, “We also add a further 10 percent credit to anything they put in, so in Dublin Airport if you put 5 euros into the machine you receive a 5.50-euro voucher.”
The voucher can be used in airport retail stores or the value from the voucher can be donated to charity. Airport retailers get extra business through the vouchers, while travelers can get rid of unwanted coins before going through metal detectors at security points in the airports.
Coindrum gets a commission from airport retailers who accept the vouchers. These retailers have reported the typical voucher user spends more than the amount on the voucher, making it realistic for the retailers to pay Coindrum the commission.
According to Decker, “Everybody who gets a voucher is essentially signing a psychological contract saying ‘I’m going to start spending money in the airport.’ And we not only send people into stores, but it turns out that on average passengers outspend their voucher by a multiple of three.”
Coindrum, founded three years ago, recently finished what proved to be a successful three-month test market at Dublin Airport in Ireland. The average traveler going between Dublin and London, it was learned, carries 5.62 euros in coins. Coindrum machines can accept up to four currencies.
According to the April 20 issue of Airport Business, “Featuring intelligent self-service interface and a PC-base, every transaction the machine completes is synched in real time to an online database, meaning vouchers could also be spent on retailers’ websites to drive traffic to their online platforms. Decker explained that the creative technology has also been partnered with charities, enabling customers to opt to donate their unwanted coins to worthy causes and creating a ‘one-stop coin solution for the airport environment.’”
According to an April 20 Irish Examiner article, “The next step now is to ramp up sales and also to fund-raise, because this is a capital intensive business which involves Coindrum providing, maintaining and servicing all the machines.”
Sources indicate the company, which is based in Dublin, is planning to expand into the international market and is currently negotiating with airports and with several travel retail chains. Services in banks and retailers in the United States that charge for their services might want to reconsider their business plan, considering Coindrum actually pays consumers to use their services.
It will be interesting to see if once Coindrum becomes an international service if small change coins typically relegated to coin dealer ‘junk boxes’ may become a thing of the past.
