Entrepreneurs Alon Stern and James Hedley founded TurnStay.

TurnStay.com, a South African travel-focused fintech, has raised $300,000 from Silicon Valley and New York-based investors DFS Lab and DCG. 

The company intends to use the funds to expand into Africa and build on the momentum it has gained so far.

Founded by experienced entrepreneurs Alon Stern, co-founder Slide Financial, and James Hedley, co-founder Quicket, TurnStay says it radically reduces the cost of getting paid for African merchants and platforms in travel and tourism by harnessing the same ‘tricks’ used by the world's biggest booking companies.  

Stephen Deng, general partner at DFS Lab explains: “TurnStay is building a much-needed offering for the African travel and tourism industry, one that unlocks substantial cost savings for hospitality businesses across the continent.

“We believe the founders are the perfect team to tackle this opportunity, combining deep industry experience with a proven history of shipping market-leading products.

“DFS Lab backs founders who use tech to redefine what's possible in African digital commerce. TurnStay not only fills a critical niche, but we believe what they're building will raise the bottom line for the African travel and tourism industry.”

According to TurnStay CEO Alon Stern: “Securing funding from these US investors is a vote of confidence in our business model, which has already processed more than R50 million in transactions. TurnStay creates a localised payment experience, charging clients in their home currency using familiar payment methods when booking accommodation. TurnStay’s solution has reduced costs for some clients by 70% and halved the number of unnecessary failed transactions. With a better checkout experience, sales conversion rates soar.”

Getting paid in the travel sector can be costly due to payment costs and fees imposed by online travel agents.

“The average merchant spends 12% of revenue on getting paid - often, this can be the difference between making a profit or a loss and dramatically affects the viability of many businesses in a sector that employs over six million people in Africa," explains James Hedley, founder of TurnStay.

According to the company, for example, a consumer from Europe uses Booking.com to book a hotel in South Africa. 

The website charges the card in Euros in Europe, where payment processing is substantially lower, resulting in a card fee of approximately 0.3%. However, if the hotel bills the client's card through an African payment firm, the transaction fees might easily exceed 7%.

As a result, payment fees for African hotels might be up to 20 times more than those on Booking.com, says the company.

TurnStay says it uses a global network of compliant companies to dramatically reduce the cost of international payments for hotels without compromising safety or efficiency, resolving the issue that African hotels can pay fees up to 20 times higher than those paid by online travel agencies such as Booking.com.

The fintech says Merchants' benefits include lower card fees, a better checkout experience, and more direct bookings, which allows properties to compete with online travel agencies with improved conversion rates.