Our tech start-up of the week is JarStar.com, a new venture based in Derry that has come up with a novel way for people to save or donate change from a cash transaction by using their smartphones or an existing loyalty card.
Fintan Connolly and Oisin Margey came up with the idea for JarStar in late 2011 and set about growing the business last year.
Connolly has more than 20 years of experience in banking while Margey’s background is in engineering.
Digital piggy bank
Describing JarStar as being like a digital piggy bank, Connolly says the service will be available as a smartphone app that will work on both Android and iOS devices. He says the service will also work through a person’s existing loyalty card system that they might have with a retailer, such as Tesco.
At the moment the duo is testing JarStar with local retailers, as well as engaging with digital wallet companies.
So how will the platform work?
"JarStar allows people to collect the change from a cash transaction via their smartphones or existing loyalty club card," explains Connolly.
To give an example, he cites when a person goes into a local supermarket and is presented with change.
"As opposed to taking that change home and throwing it into a coin jar, the person presents his or her smartphone to the retailer and that money effectively then goes into his or her JarStar account," says Connolly.
Alternatively, the idea is users can use their existing loyalty cards, depending on the shop they are with.
He says there are a couple of ways of operating the JarStar platform.
Via the web and phone application, people can register their JarStar accounts.
"You are then given a QR code, which is your unique identifier. If you are an existing loyalty card member you can tie that to that loyalty club card with that retailer. You also use your own QR code," explains Connolly.
"You present that ID at the checkout. That money is then transferred into your account. You can see either via your mobile phone or web app where you have saved your change and what merchant has provided you with that change. You can also see your existing balance."
A new form of saving
Connolly says JarStar can then be used as a type of saving mechanism.
"You can ring-fence those funds if you want to save up for something. Say, for example, you want to save for a holiday, you can put your funds into mini-jars within your account."
The goal here, according to Connolly, is that an airliner or retailer might offer people an incentive to spend money with them.
However, people can also choose to transfer their money directly back into their own bank accounts. In this instance, JarStar will charge 4pc for the funds transfer.
"That is the way it works at the moment but we hope to bring that down to effectively 0pc," says Connolly.
JarStar will also have an option for people to donate their digital change directly to a charity.
"The system will allow people to donate some or all of their change to a charity selected from their local area or they can choose a default charity," he explains.
Digital wallet companies
Margey and Connolly are also talking to a number of digital wallet companies and new payment providers.
"We see the future of digital wallets as pretty much mimicking your existing wallet. It will have debit or credit card functionality in it, but it will also have a cash balance in such digital wallets," explains Connolly.
"And just as you would have a coin pocket in your wallet, we believe that you will have a coin pocket in your digital wallet.
"From time to time, people still use cash. On those occasions, if somebody uses cash they will be able to present his or her digital wallet and accept the change back into it via JarStar.
"We are working with a number of big names on such a project," adds Connolly.
The idea, he says, is that JarStar will allow digital wallet companies to have access to people who still use cash to make purchases.
In the UK and US, for instance, he says that roughly 55pc of transactions are still in cash. In southern Ireland, he says that figure is more like 70pc.
"If you use a digital wallet, that provides you with various incentives. At the moment that is only available to people who use debit and credit cards. JarStar is digitising all of the coins and change that exits. Whenever someone does use cash our system will convert it back into a digital format," adds Connolly.
Since 2012, JarStar has also been working with IBM. Last year, the start-up joined the IBM Global Entrepreneur programme.
The company also entered IBM’s SmartCamp KickStart programme and emerged as one of the five finalists in the Derry competition.
"We have agreed upon an integration project with IBM. What we hope to do over the coming months is integrate JarStar into IBM’s point-of-sale systems around the world."
JarStar is also working with Toshiba Global Commerce Solutions since IBM announced the sale of it Retail Store Solutions business to Toshiba in 2012.
At the minute, Connolly says JarStar is carrying out trials with retailers.
"Ideally, we would like to work with larger retailers to help them reduce their cash management costs by using the system," he says.
"We’re trialling the system on a very closed basis at the moment, with the view to rolling it out with one of the larger retailers or loyalty companies this year. We are working closely with some Tier 1 retailers and digital wallet providers. We also hope to complete the integration project with IBM," adds Connolly.
Finally, his advice for other self-starters out there is to talk with as many people as possible in their chosen industry.
"People are really happy to have a chat and help you out; it can be surprising. Try to find partnerships and a synergy with other developed products. Maybe there will be a quicker way to market," adds Connolly.