Spare your coins

A new start-up offers coin exchange and handling service to fill in a blank space in the city and address a long-awaited public demand 

“We help people get rid of their idle coins at home and make better use of them, while we also assist the government in keeping the coins in circulation so that they don’t have to make many new coins each year,” says Oscar Leung, CEO of Payboy 

Do you have boxes or jars of loose coins at home that you’ve received from supermarkets, grocery stores, and other shops but don’t know what to do with them? And are you too busy or lazy to queue at banks to make a deposit, knowing that some might even charge you a hefty fee? Now there is an easier way to turn spare coins into something more usable. 

Young local entrepreneur Oscar Leung has come up with a coin exchange and handling solution, with the first Payboy machine recently being installed in the city (Note: the coin exchange machine had not yet become operational when the interview took place in mid-December, but Mr. Leung said it would be ready by the end of the same month). Amid all types of hurdles, this start-up is committed to further developing this niche market with the aim of installing as many as 20 of these machines across the city. 

The first Payboy machine was piloted in a shop of the digital products retail chain Original Technology in the NOVA Mall in Taipa. Allowing people to exchange heaps of coins for a digital coupon to be spent in the retail chain, or for donations to local charities, the machine accepts all coins denominated in MOP and HK$ in circulation, including 10 cents, 20 cents, 50 cents, MOP/HK $1, MOP/HK $2, MOP/HK $5 and MOP/HK $10. Unlike most of the current services offered by local lenders, users don’t have to pay any additional fee for exchanging coins. “The limit for each exchange is MOP/HK $500 (US $25) worth of coins, but users could do it for unlimited times,” says Mr. Leung, founder and CEO of Payboy.  

“We help people get rid of their idle coins at home and make better use of them, while we also assist the government in keeping the coins in circulation so that they don’t have to make many new coins each year,” the CEO of the start-up says. According to themarket research conducted by the start-up, new coins are minted each year in Macau to be put into the market due to the idle coins lying at people’s home and the coins taken away by travellers back to their home cities and countries. Estimating that there are about MOP 640 million worth of coins in the market now, the entrepreneur notes: “It’s a very niche market, but there is a real demand for coins collection and exchange.” 


Total no of types of HK$/MOP coins Payboy accepts 

Hong Kong’s experience 

Looking at the market in nearby Hong Kong as reference, where in 2014 the de-facto central bank launched a coin collection programme involving two carts going through different districts of the city on a rotational basis and offering a free-of-charge coin exchange and collection service, Mr. Leung says: “The two carts have collected about 100 million coins each year since 2014.” But Macau’s reception of the service remains to be seen. “I’m confident that some people will use our service, but it is difficult to foresee and gauge the overall market reception, because even the government hasn’t done anything systematically in this area,” he continues.  

Compared with the nearby Asian financial centre, the Monetary Authority of Macau (AMCM) has so far only designated the city’s two banknote issuing banks — Bank of China Macau Branch (BOC Macau) and Banco Nacional Ultramarino (BNU) — to provide a free coin exchange service for the public since 2017, but the coins have to first be sorted and people have to queue for the service. This service has yet to satisfy the public, as some government-appointed consultation committee members on social affairs and legislators are urging the city to come up with innovative solutions in this field, the same way it has happened in the nearby special administrative region. 

Besides the government’s coin collection programme, which is the world’s first structured coin collection scheme using a mobile approach, there are also two private firms providing a similar service in Hong Kong, including start-up Heycoins, where Mr. Leung accumulated the relevant experience and expertise he needed to later start his own business. A former data analyst, he joined Heycoins at the end of 2017 because he intended to bring the exact business model and brand from Hong Kong to Macau.  

After a year-long fruitless discussion with a local lender regarding a collaboration opportunity in the Macau project, and due to the civil unrest that swept the streets of Hong Kong last year putting a damper on Heycoins’ performance as a business, Mr. Leung decided to launch his own firm instead. He refined the coin exchange machine and the business model to adapt it to the Macau market, and this is how Payboy was born last year. Independent from Heycoins, some of the design and technologies featured in the Payboy machine are nevertheless inspired by its Hong Kong counterpart; for instance, the same module is used for coin recognition and sorting. 


No. of machines Payboy envisages for the city 


With regards to the Heycoins terminals being placed in traffic hotspots such as local subway MTR stations in the nearby SAR, Mr. Leung says: “These places require rentals, and any fluctuations like the social movement [in 2019] and the pandemic [in 2020] will affect business turnover. Thus, learning from their experience, what Payboydoes now is collaborating with merchants to set up machines in places that are free of rental.” 

Under this current business model, Payboy users don’t have to pay any service charge, but merchants have to pay 10 percent of the value of each exchange to the start-up as commission in the hope that the machine drives up traffic to their shop and enhancestheir exposure; the remainder of the money also goes to the merchants. “We have thought about charging users a 10 percent service fee, but we’re worried that this might deter some from using our service and the remaining users might not be enough to sustain our business given the small size of the macanese market,” he says. “A 5 percent service charge might also not be enough to cover operation costs, so I’ve come up with the current business model.”  

The CEO also acknowledges it is not easy to look for merchants for collaboration. “The shops should be spacious enough to accommodate the machine, while there is room for improvement in terms of their traffic flow. In frequently visited shops like supermarkets our project is probably not useful,” he explains. Depending on the market’s reception of the first machine, Original Technology could dispatch more Payboy terminals in its other outlets in the city. “We also hope this launch will allow other merchants to see how this collaboration could work,” he says, adding that the start-up also seeks to set up the machines in some online shopping parcel collection points across the city.  

The path for negotiations with local banks and third-party payment providers like Macau Pass has not been smooth either. Apart from making donations to local charities and redeeming the coins for shopping coupons, the Payboy terminals could technically allow users to deposit money to their bank accounts or top up their Macau Pass wallets, but these functions have not been enabled yet. “They [banks and third-party payment providers] are interested in but they don’t attach great importance to the project, which does not drive up their sale but just enhances the service,” Mr. Leung says. “We’ve also discussed with some local banks about the possibility of helping them tailor-make machines for petty cash deposits, including coins… providing convenience for their customers, while also saving them labour costs.” 

“[Banks and third-party payment providers] are interested in but they don’t attach great importance to the project, which does not drive up their sale but just enhances the service,” says the Payboy founder 

Cashless society? 

With no functions of bank deposit or digital wallet topping up, Payboy intends to install more machines in the city to spread its coverage, thus providing convenience to the public and enticing them to use their service. “We hope to have five to eight machines installed here by the first quarter of 2021, and up to 15 machines by the second quarter,” the CEO says. “In consideration of the market scale in Macau, I think 20 machines will be enough to cover the city.” 

The start-up also hopes to set up its machines at border terminals to make them available to travellers; Mr. Leung believes that a lot of paperwork and administrative approvals will be required, as the process should take into account cross-border money transfers and currency exchange rates, among other things.  

While the COVID-19 pandemic has stalled Payboy’s progress — the service was originally to be launched in the first half of 2020 — and damaged businesses, with large corporations seemingly being less willing to invest in new projects and initiatives, it has also expedited the development of cashless payments here. Figures from the territory’s de-facto central bank show that mobile payment transactions in the first 10 months of 2020 totalled MOP 4.7 billion, 380 percent more than the volume recorded in the entire 2019 and 5,250 percent more than the turnover in 2018.  

“Some of my friends have told me the business [Payboy] is a dead-end, as we live in a cashless society now,” Mr. Leung jokes. “But I believe cash transactions will still account for a significant share in the future in spite of the rise of mobile payments.” In other words, as long as cash transactions exist, there will be a demand for coins circulation and collection. “It’s really a niche market, but we can fill in this blank space,” he adds.