Chapter 7. The first cellular bank in Israel

Our new venture was called Area. The main idea of ​​the project was that each user could build his own website, regardless of the programmer. Today it is impossible to surprise anyone with it, but then we were the first in Israel to do so.

In addition to the ability to build websites, we added a bulletin board, news, photo albums and more to the system. Every month we added at least one new generation. Within a few months Area became a huge portal.

People themselves advertised Area to each other. They would sign up for the system, build their websites, and add content and images, thus bringing their acquaintances and friends to the site, which brought us even more new users.

Every day more and more new people were added to Area. We began to reach at first dozens, then hundreds, and then thousands of new users per day. People created various websites - from simple family photo albums to professional portfolios and product catalogs.

The users did not pay us money, but we were in no hurry to make a profit. We were involved in increasing the user base. The more users we could get, the more money we could spend on advertising.

They started writing about us in the newspapers. We were spoken about on radio and television. We were interviewed. We had a queue of people eager to work with us - they wanted us to post them, connect their services to Area, and give users access.

The project was constantly evolving and new modules and services were being added to it - a product catalog, a consulting diary, an online diary, etc. Among other things, we registered a lot of freelancers - they built their websites and presented themselves and portfolios there. Some offered design services, some offered logo making, and others offered massage services, architecture, accounting, etc.

We thought: Why not give people a chance to pay each other for their services? For example, a freelancer has prepared a logo and he immediately receives money at the expense of Area. No bank transfers and credit cards. The money will move within the Area system and when a person wants to get cash, he can easily withdraw it through any bank.

Yes, the process requires that both the customer and the vendor be registered in Area. So what? It's great! Both will be registered and we will have even more users.

Sometimes a moment comes, which changes the essence and direction of business and life. Everything is conducted calmly, flowing, progressing, and suddenly an idea arises that is in the nature of a revolution and changes the whole structure. The idea of ​​transferring funds between users turned out to be such an idea. Suddenly everything changed. The company underwent a reorganization, in order to implement the idea.

Our virtual money was given the name ArMoney - the combination of Area and Money. It also sounded Italian-romantic and that name also had a beautiful sound.

We hired additional programmers, designers and clearing and billing system experts. Several months of hard work and the system was ready.

At that point any system user could transfer money to another user in the system, without banks and credit cards. With one click he could transfer money to his account and immediately see the credit card deposit. Everything was built on the most advanced infrastructure and highly insured billing systems.

Now, after more than 15 years, I realize we had our own Facebook with our own currency, similar to Bitcoin.

We built an incredibly powerful system, at a time when there were no smartphones! The banal Nokia device was then considered "smart" and "cool". Despite all the "wisdom" of this device, we were able to build a payment system for our users. A customer would enter the supplier's phone number, amount and product name - one click and the money would pass from one wallet to another.


Founders and partners of IsraTech.Net.
Meir Shavit, Eli Shavit, Avi Miller.
IsraTech.Net was the owner of all the projects of the system:
Area, Money Inspector, Pinkas etc.
We brought the system to perfection. It was so simple and convenient that even people who didn't really use computers could figure out how to operate it easily.

We started the Mobile Bank campaign. We did not publish in newspapers and on the radio, but directly on the Area website - at that time we already had enough users to advertise ourselves alone, without external advertising.

People started using the new service immediately. Already on the first day, 247 transactions were made, and their number was growing day by day.

But after a few weeks we were stopped. We received an official letter from the government, in which we were banned from using our payment system. In order to make such transactions, we had to obtain approval from the Central Bank of Israel - the Bank of Israel.

We did not understand why we need this certificate - we were not a bank and we did not issue loans! We only had a customer base that wanted to pay each other for services. What is the connection to the bank? But arguing with the state, especially with the State of Israel - is not the smartest thing to do.

We immediately contacted the Bank of Israel for permission to use the system. A month later we received a refusal. The Bank of Israel replied that we would only receive approval for transactions if our system became part of another well-known bank.

There was an urgent need for a solution. Tons of money was lying under our feet, but we were not allowed to pick it up. For each transaction we could get a tiny commission and that was enough to grow and develop even further. But no. Access to the money was closed by Bank of Israel.

There was no choice, we needed to convince one of the central banks to agree to be our partner.

We prepared a presentation for the banks. We activated all of our connections so that we could open the doors to the executive rooms of all of the banks in Israel. Our first attempts failed. We had to sell part of the company and add a number of new, influential partners and those who knew how to open doors.

The partners began to break down the walls of the banks. Almost every day we went to different banks and gave presentations. First to a simple manager, then to his manager, then to their administrators, then to their marketing department, then to someone else ... in short, endless presentations every day.

We went through all the banks in Israel, at all levels - "Discount," "Hapoalim," "Leumi," "Mizrahi," "Benleumi," we even went to the Post Bank! We were at every bank several times. At all the banks we were told: "Your idea brilliant. It is perfectly implemented and meets all standards. We will consider your proposal and inform you of the decision."

No bank refused, but neither did they say, "yes."

Time passed. The days became months. The company's maintenance expenses were enormous - expensive programmers, designers, systems managers, billing systems experts, management staff, marketing, hiring for the firm.

Every month we invested our money, took out loans and looked for investors, to maintain this huge system and waited for an answer from the bank.

To get more loans, I mortgaged my apartment and car. When even that money was not enough and so that the business would not collapse, my father mortgaged his apartment, his car and even the goods from his jewelry store. We knew we were taking a big risk - we could lose everything we had gained for years.

No, we were not stupid idiots. We believed that the project would succeed and eventually one of the banks would agree to cooperate with us and we would set out on the king's road. We decided to go all the way.

At some point, our personal resources ran out. We had to sell another 18% of the company to a very famous contractor in Israel.

We agreed that he would get 18% of the company and help us make a deal with the bank. He is a very famous person and could say to almost any bank: "This is my project. Make it work."

Until we would get an answer from the bank, he has pledged to support the company for at least a year and pay all the maintenance costs.

Unfortunately, the new investor did not lift a finger in negotiations with the banks. Moreover, three months later he said he was stopping financially supporting the company.

"How can that be ?! We have agreed on a period of one year! You have signed the contract!" We told him.

He replied: "True, I signed the contract. True, I promised to give you money. But there will be no money. Do what you want."

For him, us and our company were like a children's game. We were an investment of the type "if it works - good, if it doesn't work - nothing happened." So when he saw that he had to make an effort and to meet again and again with bankers to move matters, he just left us halfway.

We had nowhere else to take money. The banks no longer gave loans. My dad and I invested everything, everything we had. Investors and partners were tired of waiting for an answer. The main investor just waved us off.

I did not want to believe it, but the end had come.

Checks began to return. The workers did not receive their wages and did not go to work. Many of them sued us. All their loyalty such as, "I love you very much and am willing to do anything for the idea," disappeared within hours. Investors stopped responding to calls. At best they answered us coldly: "These are your problems and duties, deal with them yourself."

One of the partners, Rami B., with whom we had worked for a long time, ate together, and had no doubt that he would stand by our side and not leave in time of need, filed a lawsuit against me. He said: "Nothing personal. It's a business. In any case they will take everything from you, so at least I will get my share."

Less than two weeks passed and I found myself alone, in an empty office. A huge office, an office where life had once flowed, and ideas and dreams were born, now obscured by a terrible fear. Silence seemed deadly.

Everything was over.

I personally had signed all the contracts, all the loans we had taken from the banks. I was the guarantor and abode of all the loans. I had a feeling I was standing on the deck of the Titanic, facing the wall from which the water was about to burst and there was nowhere to run. Everyone left the ship a long time ago and I must die here for everyone...

A debt of $600,000 and it was all registered in my name... Every day summonses came to court from the various banks and debtors. I had no idea how to get out of all this. I was only twenty-five, I was still young and wanted to live, but life was over...