For the first in a new Business Advice series taking a closer look at the UK’s local currencies, we spoke to Amos Meiri, CEO of Colu, the Tel-Aviv-based tech firm powering the latest city-wide currency – the Liverpool Pound.
Enthusiasm for local money in Britain has seen currencies pop up in towns such as Lewes, Kingston and Brixton, while the first city-wide currency launched in Bristol in 2012. A designated organisation – The Independent Money Alliance (IMA) – has even been founded, supporting the local currency movement through shared knowledge and technologies.
In 2015, circulation of the Bristol Pound reached £700,000 in the city. Local business owners have been able to pay their business rates with the currency, and residents can use it to pay council tax. The Brixton Pound now has its own cash point in the area, the first of its kind in the world.
Local currencies began as non-profit initiatives to encourage shoppers to spend locally and invest money back into independent businesses. The same ethos remains for the Liverpool Pound, but Colu – backed with $12m in VC investment – could help local money be taken more seriously.
Amos Meiri was managing trading and hedging for a finance company in Cyprus in 2012 when he learnt how “cryptocurrency” Bitcoin could be used alongside traditional currencies. At the same time, the country suffered a financial crash, and people were unable to withdraw more than €50 at a time.
The understanding that new technologies could allow more control and better distribution of money was Meiri’s inspiration for Colu. The startup was initially a developer’s platform for blockchain technology, and organic demand for local currencies in Tel-Aviv saw Colu issue its first two “digital wallets”.
Following domestic success, Meiri was approached by Independent Liverpool, an organisation championing local Merseyside businesses, to develop a currency that would help support the city’s network of small business owners.
“The basis and foundations for promoting local businesses were already there in Liverpool,” Meiri told Business Advice.
Launched in December 2016, the “£L” is pegged to pound sterling. Local business owners pay a monthly £20 fee to trade with the Liverpool Pound, and uptake on the programme has been overwhelmingly positive so far. Some 10,000 people are currently using Liverpool’s digital wallet.
“Every day we’re recruiting three or four new businesses in Liverpool,” Meiri said, and with a transaction made every five to ten minutes, the Liverpool Pound is undeniably growing in popularity. But for business owners yet to buy into the scheme, how would he sell its benefits?
“We are helping to keep money in the local area, and taking people from putting money into large chains into small businesses. We’re keeping small business owners from getting left behind with new technologies and how users want to pay in 2017,” he explained.
“There really is nothing to lose.”
Business owners are even saving money on bank charges each time a customer pays with the Liverpool Pound.
Research has found that every £1 spent locally is worth almost four times more to the local area than money spent with corporate chains, through investment in local jobs and added tax revenue.
The support for local businesses goes deeper – “the whole package”, according to Meiri. A “business club” is being developed as part of the Liverpool Pound scheme, with events and workshops helping to develop the marketing and customer service skills of owners.
For Meiri and Colu, it’s about using the local currency to support the community and create more business for its entrepreneurs. For the user, it’s helping people discover what’s near them, and where they can buy locally.
“Using the local currency through the Colu app means targeting the most important customers – the people who live nearby. The app collects data that allows business owners to understand and communicate with consumers, and reducing the clearing fees from credit companies. The list goes on and on,” Meiri said.
Through currencies like the Liverpool Pound, users are able to take advantage of exclusive promotions and forge closer ties with their local traders. It’s a mutually beneficial arrangement that makes money go further and empowers the local economy.
A desire to “shop local” is an essential condition to allow local currencies to thrive. Meiri recalled a taxi journey from Liverpool Lime Street to a coffee shop that entered the initiative. After describing the Liverpool Pound, the driver put a sticker on his car and promised to spread the word to all his passengers.
“The people of Liverpool love the city,” Meiri added, “there’s a very strong sense of community”.
This sense of civic duty has kept local currencies alive in the UK, but the use of modern blockchain technology is what sets the Liverpool Pound apart and could unleash the potential of local money.
“It’s going to take some time to reach where we want to get to,” Meiri noted.
“One day you’ll be able to travel from city to city and feel local everywhere you go. From the coffee shop near your house that knows the coffee you like, you’ll get the same experience in another continent.
“It’s about creating that cross-border feeling of being local everywhere. First its going to be the UK and Israel but we want to take it to other parts of the world,” he said.
Global ambition aside, Meiri added that it’s about re-strengthening the connection between local business owners and their customers.
“When I was young, I used to buy groceries for my mother, and when I got to the store the staff were already packing my family’s shopping. We’re trying to re-create that feeling that seems to have been forgotten.”
Next up in our local currency series is the Brixton Pound, when we will meet co-founder Zac Monro and find out how the initiative has benefitted independent business owners
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