South African travel-focused fintech TurnStay.com has raised $300,000 (over R5.4 million) from prominent Silicon Valley and New York investors, DFS Lab and DCG. This capital injection will be pivotal for TurnStay’s expansion across Africa, further building on the substantial traction it has already achieved.
TurnStay’s Vision and Founding Team
Founded by seasoned entrepreneurs Alon Stern, co-founder of Slide Financial, and James Hedley, co-founder of Quicket, TurnStay is revolutionizing payment processing for African merchants in the travel and tourism sector. By leveraging the same cost-reduction strategies employed by major global booking companies, TurnStay significantly lowers the cost of receiving payments.
Strategic Investment from DFS Lab and DCG
Stephen Deng, General Partner at DFS Lab, expressed strong confidence in TurnStay’s mission: “TurnStay is addressing a critical need in the African travel and tourism industry by offering substantial cost savings for hospitality businesses. The founders’ extensive industry experience and proven track record make them the ideal team to seize this opportunity.”
Deng further emphasized DFS Lab’s commitment to backing tech-driven innovators: “We invest in founders who are redefining African digital commerce. TurnStay not only fills a crucial niche but also has the potential to significantly boost the African travel and tourism industry’s profitability.”
Impact on African Travel and Tourism
TurnStay CEO Alon Stern highlighted the significance of securing funding from US investors: “This investment is a strong vote of confidence in our business model. TurnStay has already processed transactions exceeding R50 million, offering a localized payment experience that charges clients in their home currency using familiar payment methods. This approach has reduced costs for some clients by 70% and halved the rate of failed transactions, leading to higher sales conversion rates.”
For many African travel businesses, high payment fees can be the difference between profit and loss, affecting the viability of an industry that employs over six million people.”
Reducing Payment Costs in the Travel Industry
Payment processing in the travel industry is notoriously expensive. Merchants often spend up to 12% of their revenue on payment fees, which can determine the profitability of their business. James Hedley, co-founder of TurnStay, explained: “For many African travel businesses, high payment fees can be the difference between profit and loss, affecting the viability of an industry that employs over six million people.”
Real-World Example of Cost Savings
Consider a European customer booking a South African hotel through Booking.com. Typically, Booking.com bills the customer’s card in Euros, resulting in a minimal processing fee of about 0.3%. However, if the hotel uses an African payment company, transaction fees can exceed 7%, making payment costs for African hotels up to 20 times higher than those incurred by Booking.com.
TurnStay’s Innovative Payment Solution
TurnStay mitigates these high costs by using a global network of compliant companies to process payments, ensuring safety and efficiency. This solution allows African hotels to pay significantly lower fees without sacrificing security, leveling the playing field with global online travel agencies.
Benefits for Merchants
Merchants benefit from TurnStay’s lower card fees, enhanced checkout experiences, and increased direct bookings, which improve conversion rates and competitiveness against online travel agencies. TurnStay’s integrated payment solution works seamlessly with leading booking engine providers like Benson Software, making it a valuable asset for the African travel industry.
By providing a cost-effective and efficient payment processing solution, TurnStay is poised to drive substantial growth in Africa’s travel and tourism sector, empowering local businesses to thrive in a competitive global market.
