Twenty-year-old James Fahy is ordering coffee in Twobeans, a coffee shop in Dun Laoghaire, Co Dublin. On the counter near the card payment machine is a neat white box that allows him to tip the barista a euro with a simple tap of his phone. Sitting on the bench outside the café, Fahy tells me that he installed the device just a few weeks earlier.

Along with his co-founder Ciara Walsh, also 20, who has joined us for coffee, Fahy has been flat out in recent months rolling out the JustTip machine to coffee shops, delis, sandwich bars, and other outlets looking for ways to collect and manage tips easily.

Since JustTip began trading, it has secured more than 80 outlets starting with Lemon, a popular crepe maker on South William Street in Dublin. It has also been building up into its recent entry into Britain with Artisan, a small coffee chain in London plus a boutique café called Chapters Coffee Roasters in west Kensington.

“It’s been busy,” Fahy said. “We got the idea last November during the lockdown, incorporated last April, and began trading on July 15.”

In between Fahy dropped out of NUI Galway and a degree in commerce, while Walsh left TU Dublin where she was studying marketing. “I think at the very start it felt like a risk,” Fahy said. “We deferred a year in August as we could see traction. We did €5,000 in the first two weeks in tips, so we knew we had a business.”

JustTip raised a €100,000 seed round from friends, family, and customers to get going. Fahy said the plan is to raise €1 million to help it scale in Ireland and overseas in the first few months of 2022.

“We’ve five meetings with investors set up for the next few weeks. They are from Ireland and the UK, and one is from the US. Investors can see that tipping is a common problem and that companies like ours are the solution,” Fahy said. “Everyone has felt the effect of Covid and the cashless society so they can see the opportunity.”

Walsh said that JustTip had processed €55,000 in tips so far, and a key advantage of JustTip was its ease of use. “What we specialise in is keeping your line of customers moving. If someone has to stop to scan a QR code it just becomes too slow,” Fahy said. “We are very efficient in what we want to do. We keep end to end transactional reports, so the payment comes through us and goes to each individual employee’s bank account based on the hours they have worked.”

According to Fahy, “If you give too many tipping options it slows the line down. Our customers could sell 400 or 500 cups of coffee a day. We take the thinking out of tipping.”

Market size and regulatory trends

How big is the potential market? “From our research there are about 2,500 to 3,000 locations in Ireland for us. In the UK there are 80,000 to 90,000, while in the US there are 670,000 locations,” Fahy said.

Walsh added that raising the €1 million funding round would help it scale overseas, and develop new products.

Walsh said that JustTip’s current product was ideal for making tips of say €1 quickly, but next year she hoped to launch a new product that would allow more options for tipping that would work better for a sit-down restaurant or the likes of hairdressers or beauty salons.

Walsh said regulation was also working in favour of companies like JustTip. “There is new legislation coming in Ireland and the UK to regulate tipping so in that sense we are ahead of the curve as we solve the problems associated with this with technology,” she said.

JustTip also helps employees pay the taxes associated with tipping. “The tax liability falls on the employee,” Fahy explains. “We send them a statement at the end of the year to say how much they’ve made and how to declare it to Revenue.”

JustTip makes its money by charging €1.50 a day plus 5 per cent of all tips collected. Fahy said having an easy way to get tips to employees was essential in the services sector which was fighting to retain good staff.

“By the end of this year we hope to hit €100,000 in tips collected,” Fahy said.

He said JustTip was also in talks with charities and hoped to collect about €100,000 for them over the Christmas period.

Based in Dun Laoghaire, Fahy said that JustTip had received support from its Local Enterprise Office but had yet to win over Enterprise Ireland. “We are going to easily create 10 jobs in the next three years. We are scaling overseas. We are on track for €1 million in revenue. I would have really appreciated more help from EI, but we haven’t got it yet,” Fahy said.

JustTip is facing competition from other players like Strikepay, which was co-founded by serial fintech entrepreneurs. How will JustTip compete with the competition both in Ireland and overseas? “The market is very big. There is room for everyone in the market,” Walsh said. “We think our product is better, more convenient and that it works better for employers and employees. As far as competition goes, it keeps you on your toes, but we are not that worried as we really believe in the product we have built and how quick and easy it is.”