Hi
Firstly, congratulations for this beautiful and ambitious project!
I read the white paper and have the following questions:
1/ Ethereum congested blockchain
During the past weeks, the Ethereum network was heavily congested due to the number of Ether based ICOs and their related blockchain.
Since you hope to become a leader in e-commerce transactions, how would you cope with the currently congested Ethereum blockchain ?
2/ Merchants receiving crypto
I like the idea bringing new people into the cryptoworld. However, why don't you mention the cost of converting Monetha token / Ethers into fiat and receiving fiats for the merchant ?
As you know, all exchanges charge significant Fiat remittance fees. So the final cost may more than 1.5% for the merchant.
3/ Clients paying with crypto
Will the app enable non-crypto holders to buy Monetha token / Ether by credit card or via itunes for instance ?
It would bring more customers into cryptos.
4/ Collaboration with major e-commerce players such as Shopify
What is their incentive to work you ? Aren't you a competitor to their business ?
Do you factor revenue sharing agreements with them in your business model ?
If you don't get a deal with one of them, you will have a hard time convincing merchants ?
5/ ICO
Will you go for a "first subscriptions take all" or make sure that tokens are also distributed to smaller orders ?
How will you make sure that the ICO wallet is not hacked.
6/ Token
It seems that there won't be any more tokens issued after the ICO. Do you confirm ?
7/ Exchanges
How soon after the ICO will the token be traded on exchanges ?
Are you already in advance talks with reputable exchanges ?
Thanks in advance and good luck with the ICO!
Thank you for your questions!
1. We undestand that as of now, Ethereum or any other blockchain in more broader terms has not solved the scalability issue. It is the same as Internet was not as fast as it is now in 1980s and Amazon could not have existed at the scale of 2017 back in the time.
All in all, you can consider Monetha as being a blockchain agnostic solution. which basically means that Monetha can run on any blockchain that has solved scalability and security issues and has smart contract capability. As of now, Ethereum is a gold standard for creating applications using smart contracts. It might be any other blockchain (or group of blockchains) in the future.
2. First of all, Monetha will integrate with cryptocurrency exchanges to enable merchants to exchange crypto to FIAT (government backed currencies) seamlessly. For example Kraken.
1.5% commission fee that Merchant pays for Monetha's payments processing and Decentralised Trust and Reputation System does include an exchange rate.
And the reason is: in the payments industry, there is no standard of having an exchange rate included into the payment processing. Exchanging to a different currency is a merchant's prerogative and no one enforces it.
PayPal and other major payment processing companies do not include an exchange rate into its transaction fee. For example not only does PayPal take 2.9%-4,4% (depending on a country) + $0.3 transaction fee from the merchant, but also exchanges the currency with a bigger rate than the standard.
All of the currency exchange is being done for a separate fee. For example, VISA not only has a separate exchange rate fee (which is usually bigger than a regular exchange rate fee) but also a Dynamic Currency Conversion fee (which is normally around extra 2%) and sometimes even a foreign transaction fee (1%-5%, usually 3%) if the payment was processed abroad.
Moreover, your currency exchange is always an optional thing. You cannot and should not include it into the transaction fee.
For example, here is the fee schedule for one of the most popular crypto exchanges - Kraken:
https://www.kraken.com/en-us/help/fees.
If you are a merchant in Europe, the highest transaction fee that you will pay using Monetha is 0.26% when the volume is lower than 50.000. To withdraw euros via SEPA you will pay EUR 0.09.
If a merchant is in Europe and receives Ethereum based cryptocurrency and exchanges it to euros it would go like this: 10 - (10*0,015) - (10*0,0026) = 10 - 0.15 - 0,026 = EUR 9,824
We also acknowledge the fact, that in other cases and other countries the exchange rate might be higher.
But, 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.
As we do not include an exchange rate, here is the situation:
Monetha will charge a 1.5% transaction fee from merchants. Of that, 0.5% will go to a smart contract for the Monetha token holders and other 1% will go to the company as revenues. An interesting fact is that the average traditional payment gateways take approximately only 0.25% + 0.1 from the total fee as their revenue. This 0.25% + 0.1 is a markup fee to the interchange rates.
For example, if the total transaction fee that merchant is charged is 2.9% + $0.3, the 2.65%+ $0.2 is the interchange part that banks, credit card associations and others are dividing and 0.25% + $0.1 is the markup part, which payment gateways take home as a revenue.
3. At the moment this method is not covered by our development timeline, but we do have different strategies of how to achieve mass adoption for people who are “not in the crypto world”. For example, the long-term vision of Monetha is to process fiat to fiat payments through Ethereum blockchain, so the merchant and the client would both have the benefits of the payment efficiency/DTRS that the blockchain brings.
4. Their incentive is very simple - to equip their merchants with the best possible technology for payment processing and trust and they are in no way a competitor to Monetha, just as PayPal isn’t a competitor to Shopify.
We have different strategies that let us reach the high scalability of onboarding the merchants and integrations with Shopify, FirstData and others is just a one of them.
5. We want to make our token sale fair for everyone and that’s why we decided not to do a pre-sale and give every investor big or small a level playing field.
The security question is very important to us and we are doing everything to ensure the security and for security reasons, we wouldn’t like to get into the technical details.
6. That is correct. In addition, all the tokens that won’t be sold - will be burned.
7. Very good question. To have a pole position and to get listed on the exchanges as soon as possible we are already in talks with the highly regarded exchanges. At the moment it is hard to give an exact time frame, but we’ll do everything in our power to make it as soon as possible.
Thank you for the best wishes!
