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Zenobia Pay – A mission to build an alternative to high-fee card networks

zenobiapay.com

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Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#11

Post by chrismcb »

bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

It costs the consumers. Sometimes indirectly and sometimes directly. I would think that this is the primary motivation to come up with a new scheme.

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#12

Post by memco »

vasco wrote: post #8
bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.

Not sure how prevalent this is now, but a few years back I was seeing a lot of "cash price" advertised for stuff that was lower by whatever the merchant didn't have to pay in fees so sometimes cash may not be subsidizing the credit industry.

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#13

Post by itake »

sampullman wrote: post #7
bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

If it's ultimately in the price of goods, then it doesn't cost the consumer nothing, no matter how you spin it. It's just cleverly hidden. I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.

The price is the same if you use cash or card. Really, after reward points, card tends to be even cheaper.

Visa/Mastercard/BNPL/Klarna etc. all have negotiated discounts for consumers, paid for by the merchant.

I'm skeptical that merchants would lower prices (stepping away from $x.98, etc) instead of pocketing the higher margins themselves.

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#14

Post by Tor3 »

sampullman wrote: post #7
bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

If it's ultimately in the price of goods, then it doesn't cost the consumer nothing, no matter how you spin it. It's just cleverly hidden. I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.

The incentive for merchants to accept cards for payment is that it'll increase number of sales. And it does. In principle this should even out over all sales.. but cards do make it easier for consumers do purchase stuff, and I'm absolutely sure that I personally spend money way easier with a card than without (not that I spend more than I make, mind). The total number of sales go up.

I haven't used cash in my home country for the last two decades, at least. I mean, CC works even on parking meters when paying half a dollar (equivalent) for a few minutes of parking, and I can use a card in flea markets and even some garage sales.

Oh, I forgot: A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc). That's because handling cash costs them MORE than handling credit/debit cards. In other words: It appears that using cards LOWER the costs for the merchant, not the other way around.

EditAdd: I presume a lot of the cost saving is that paying by card is 100% electronic, just tap the card (add the pin code if it's expensive enough), and the transaction goes directly into the shop's account. With cash it's way more cumbersome. Way, way more.

(Mind, there's no such thing as signing by hand anymore. If there were paperworks involved it would be different. But there aren't any, not in Europe and not in Japan anymore either)

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#15

Post by ameliaquining »

memco wrote: post #12
vasco wrote: post #8

Earlier quoted context omitted.

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.

Not sure how prevalent this is now, but a few years back I was seeing a lot of "cash price" advertised for stuff that was lower by whatever the merchant didn't have to pay in fees so sometimes cash may not be subsidizing the credit industry.

In a lot of cases there are regulatory or contractual barriers to doing that.

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#16

Post by albiinics »

bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

This is like says the tarrifs are paid by the other countries, not the US citizens.

In reality, there is no competition in the payment systems. Free markets mean competition.

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#17

Post by didibus »

vasco wrote: post #8
bruce511 wrote: post #5

When you start at the wrong premise, you typically end up in the wrong place. The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well. For starters it works everywhere. Online. IRL. In my home country, in foreign lands. Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Merchants might pay 3%, (and ultimately yes, th…

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.

Are you saying that even when I pay for something in cash or using debit, because of the possibility I'd use my credit-card the merchant had +3% their price?

Re: Zenobia Pay – A mission to build an alternative to high-fee card networks

#18

Post by vasco »

didibus wrote: post #17
vasco wrote: post #8

Earlier quoted context omitted.

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards. Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.

Are you saying that even when I pay for something in cash or using debit, because of the possibility I'd use my credit-card the merchant had +3% their price?

Almost but not exactly, any rational merchant would estimate how much they pay monthly in credit card fees and find a way to add that back to their revenue. For most practical cases, the business is started already after the existence of credit cards, so when modeling revenue in your business plan this should already be baked in and the prices you come up with already cover it.

So it doesn't mean they increase the price of every product by 3%. One guy might charge more just for coffee, another do some other thing. But any extra cost you put on a seller of anything, the rational seller will make that back in sales somehow.

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