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FAQ

Business

Product

Investment

Who is your competition?

Our immediate competition consists of the alternate methods used to pay for tours in our target countries - namely International Wire Transfers, Western Union, and Moneygram. These are all expensive, offline, and do not provide any safety for the customer (i.e. refunds or chargebacks).

How and where will you acquire customers?

We've manually built a database of more than 20k tour providers - about 1/3 of the industry - and so far we've acquitext-strong customers primarily through email marketing. We plan to augment these methods with a generous referral/affiliate program and regional traveling sales (i.e. throw a bash at a hotel in a city, invite partners and prospective customers, then move onto the next city).

Our initial regional focus for payments will be in Central and South America, where there is a high proportion of US travelers, and a dire shortage of available payment solutions. We currently have a database of more than 3000 qualified tour providers in Central and South America.

What are your growth projections?

Contact us for a spreadsheet with detailed financial model.

What is your customer lifetime value (CLV)?

At a churn level of 10% annually, our CLV will be about $20,000. A detailed CLV calculation is available in our financial model.

What is the regulatory landscape for this business?

We will be registered as a money transfer company under US law. Money transfer companies are required to abide by certain record-keeping and reporting requirements to combat money laundering. As a practical matter, a single administrative hire will serve our compliance needs for the first year. States also have their own laws pertaining to money transfer companies though, as a rule, these not enforced unless the money transfer company is very large, or is facilitating crime (e,g, Square payments was processing nearly $1B in payments/year before being served with a state notice).

The regulatory environment in the EU is somewhat more complex, and we will make use of legal help there when we implement payments there.

What is your long term plan for the company?

Most of the large online travel companies today are focused on reselling hotel rooms at very high margins. We feel there is an opportunity for a company to apply an Amazon-like model to the travel industry - i.e. a partner-friendly, one-stop travel shop with an emphasis on competitive pricing and a large (travel) inventory. We believe that the payments product will help us achieve that goal.

How will you minimize fraud?

Travel is unique among online purchases in that it requires the purchaser to redeem her/his purchase in person, whether the purchase is for a hotel, tour, or flight or other transportation. We'll take advantage of this to photo id customers using a smartphone application at the point of redemption. This alone will eliminate mass fraud. Since we escrow the customers funds, we can provide direct and immediate refunds in cases where a bank account was used without authorization.

We also have a process for vetting merchants that requires the merchant's banking documentation and an identity verification. We will also take additional measures for reducing the impact of fraud such as requiring minimum waiting periods for large purchases.

What is the development timeline for the payments product?

We will process our first payments within 90 days of closing this raise. That is a firm commitment.

Will customers be willing to enter their bank account information for direct-debit transactions?

To be sure, some will not. However, there are more than enough people who will to build a Very Large business. Consider :
  1. Today, there are over $5B in annual tour transactions being conducted using less-safe, less-convenient, more-expensive methods than ours.
  2. Companies such as Dwolla, GoCardless, and VenMo have already built successful businesses with millions of customers based on consumer-facing direct debit.

What are the gross margins for the product?

Our margins will be drastically higher than credit card-based companies since we aren't handing over most of the transactions cost to Visa, MC, or Amex. We expect them to be 70-80%, after accounting for cost of sales (including fraud). For more detail, see our model.

How does Bitcoin fit with your product?

The basis for our payment product is that we can allow travelers to do business with travel providers anywhere in the world. Currently, Bitcoin can not be efficiently changed into local currency for most of the countries in the world, so it is not a suitable payment medium. Nevertheless, we do plan on allowing travelers to pay through our search site using Bitcoin since we can easily change that to US Dollars.

Why hasn't anyone else done this?

It's about timing and market. Although the underlying payment technologies for this product (ACH, wire transfers) have been around a long time, ACH has only recently been made available to consumer-facing companies because of the increased risk for fraud. Our product also requires our merchant customers to have a smartphone with data capabilities, and the widespread availability of smartphones in most nations is also a comparatively recent development. In addition, our primary mechanism to prevent consumer-side fraud (photo ID) is fairly specific to the travel market, which makes it less attractive to typical payment companies who wish to accept payment for a broader spectrum of products. There were more than $1 Trillion in travel payments last year, so we're happy to confine ourselves to travel!

Do you have a financial model for the business?

Yes, we have detailed one and three year models. Please contact me with an introduction if you're interested in viewing the model.

How do you plan to use the proceeds from this raise?

We'll finish building the payment product for US direct debit payments and make it available to customers in Central and South America. We'll also get our monthly revenue to > $100,000/month and increase our headcount from 3 to 7.

Have you invested any of your own money in the business?

Yes. I have invested about $100k of my own money, not including about two years of living expenses. I've emptied my savings and sold my primary residence. I'm in.

Is there any money already committed to this raise?

Yes. As of Oct. 1, 2015 we have about 10% of the raise committed.

Bottom line - why should I invest?

It's huge market where our target customers are almost desperate for our product. I'm an experienced and very committed entrepreneur. It's an opportunity for you to make a lot of money with the side benefit of knowing that you're doing good by helping small merchants around the world build their businesses too.