If you're able to reduce numerous transactional steps why do you need to charge 1.5% fee. It seems a little steep to me. Are you planning to provide better fee rate for businesses that have tons of transactions or this will be a 1.5% flat fee?
Is Monetha going to be an online payment gateway only? Or are you also planning to issue physical card so consumers can use at brick & mortar stores?
Thanks for the question vuvanle120!
Regarding the 1.5% transaction fee: 1) 0.5% of 1.5% transaction fee will go to Monetha investors. So we are left with 1% as a company revenues.
2) Traditional payment gateway takes 0.25% + fixed fee as their company revenue from total fee which is around 3% + fixed fee. But the thing is that payment solution business is always a scale business. You have to generate a lot of transactions in order to be profitable. Having this in mind, we have almost four times the rate to do business with as compared with what an average global payment gateway takes per transaction as their revenues. Which gives us big "buffer" for growth until we reach the sufficient transaction volume.
Moreover, you have to remember that the merchant does not only pay a transaction fee when accepting payments with traditional payment gateways. There are bunch of other fees that merchants have to pay, such as:
● Retrieval Request Fees and Chargeback Fees are paid when someone claims for a chargeback. The best-known payment gateways such as PayPal and Stripe charge merchants a USD 15 chargeback fee.
● Flat fees that include: Terminal fees to buy the needed terminal for retail merchants, PCI fees paid to Payment Card industry for compliance OR noncompliance
● Annual fees, Monthly fees, Monthly minimum fees, IRS reporting fees, network fees , etc.
● Incidental fees that consist of: Address Verification Service (AVS), Voice Authorization Fee (VAF), Batch Fee, and NFS fee.
● Marketplace fees for Alibaba, Amazon, etc for “providing and facilitating” the trust system. Think about his use case: if you are a small merchant in China, the only way to sell goods to the global world and be trusted at the same time is to join the Alibaba. You won’t need to pay a fee for a payment gateway, but Alibaba will charge you a pack of other high fees.
When combined, it calculates to a high amount of money that the merchant has to pay per year for a payment processing.
Thus, we not only significantly decrease the rate merchant has to pay in order to accept payments, but we have more room to do business with.
There will definitely be a possibility to decrease the 1.5% fee for businesses that have huge transaction volumes.
3) We are not only a payment processor. Together with the payment processing comes the Decentralised Trust and Reputation system which is included in the same 1.5% transaction fee. Today, if merchants want to have a trust rate, he/she has to join one of the centralised marketplaces like Amazon, Ebay, Alibaba, etc, which charges merchant ridiculously high fees and most of the time hold money for a very long time. Other option is to pay additional money for services such as Trustpilot which does not work as it supposed to while leaving a lot of so called "empty space" between very bad and very good comments.
Regarding online and brick&mortar: As you can see in our product development timeline on our website or White Paper, the last milestone is to enter the Retail (physical brick&mortar) stores once we have a fully functioning and working solution with Decentralised Trust and Reputation for e-commerce.
E-commerce is converging with physical commerce through mobile and new transaction technologies in the traditional world that leverage the mobile technology: strong authentication, NFC communications and Tokenization of traditional payments. So our target market is much bigger then online.
Hope that answers your questions!
Monetha Team
