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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

#91

Post by vidarh »

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.

Handling cash costs more on average at least for smaller businesses than typical card fees.

It's typical to estimate the cost of handling cash anywhere from 4% to as high as 15% depending on takings and size of transactions.

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

#92

Post by kennywinker »

Copenjin wrote: post #46
OsrsNeedsf2P wrote: post #42

This is what product market fit looks like; everyone is trashing various pieces of Zenobia, but it's still getting upvoted because we all want the solution.

A solution to what? Serious question, I don't have any issue with the current model. Or are you referring to recent events?

The problem of paying 1-3% of every purchase to credit card companies, causing everything to cost 1-3% more.

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

#93

Post by toast0 »

thayne wrote: post #9
ceedaxp wrote: post #3

US consumers are too conservative in the way they expect payments to work—checks are still in circulation and “swipe & sign” has barely been put to rest (has it?). Any system like this would require adoption by a few diverse and large-scale retail institutions to make it worthwhile for consumers to use. Or else it would be a mere alternative to “PayPal me”…

It is very much a chicken and egg problem. Merchants have no reason to adopt it if there aren't very many customers that use it, and customers have no reason to adopt it unless there are a lot of merchants, or at least some important frequently used merchants that use it. I think for a new payment system to catch on it needs to either have a significant benefit for both payers and merchants, or be pushed by governmen…

> It is very much a chicken and egg problem. Merchants have no reason to adopt it if there aren't very many customers that use it, and customers have no reason to adopt it unless there are a lot of merchants, or at least some important frequently used merchants that use it.

I agree that both parties need a reason to adopt a new payment method... But the reason can't be only that there's a lot of merchants/customers that have it ... If there's benefits for enough participants, reach can drive adoption for those who don't care about the benefits, but you've got to have some material benefits to get people started.

It's got to have a good experience, too.

But from this rant, it seems like they were trying to be a middle man for instant bank payments... I don't see the value of that as a purchaser when I can use a debit card. For the merchant, running a debit card takes a small fee, but anything that needs someone to scan a QR code takes a lot of time.

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

#94

Post by AnthonyMouse »

ceejayoz wrote: post #47
jader201 wrote: post #40

Earlier quoted context omitted.

> but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees. That’s not true at all, particularly for large purchases. If I go to an electronics and check out with $5000 in electronics, there’s no way that handling cash incurs the same expense to the store as the 3% fee ($150). Maybe for nickel and dime purchases, but that’s rarely the case. Even a $50 dinner doesn’t cost the re…

You're not factoring in "I won't go somewhere that doesn't take a credit card". A store that sells $5k electronics is gonna lose a lot of sales if they attempt to save that $150 by only taking cash.

Which is why you take both but make the credit card customer eat the fees. Then many customers will save you (i.e. themselves) the money by paying cash and the ones that insist on using a credit card are free to pay what it actually costs.

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

#95

Post by vidarh »

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.

Handling cash costs money too. Sometimes more than handling cards. But a proportion of customers who like cash are very strongly convinced they are "subsidising" card payments, and might be attracted by pricing like that, so maybe it still ends up being a net gain.

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

#96

Post by ceejayoz »

OutOfHere wrote: post #85
ceejayoz wrote: post #43

Earlier quoted context omitted.

If you want an Amazon stablecoin, fund an Amazon gift card with an ACH. (They already offer this, and they love it, as it bypasses the credit card companies. I often get offered a bonus for recharging this way.) Because that's fundamentally what it's gonna wind up being.

It's not about what I want. It's about what Amazon wants, has said they will institute, and what is already legal. Yes, in a manner of speaking it could be like that, except that stablecoins can be self-custodied, safely be sent to others, and be exchanged for other stablecoins and forms of money, etc. I will not apologize for the cluelessness of other people.

> except that stablecoins can be self-custodied

I will not apologize for the cluelessness of other people, like those who think Amazon is gonna make and promote a stablecoin they don't deeply control.

Even Tether freezes addresses. Amazon absolutely will.

> It's about what Amazon wants, has said they will institute…

That applies to a whole bunch of things they eventually gave up on. (Like https://www.theverge.com/2024/7/3/24190410/amazon-astro-busi...)

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

#97

Post by vidarh »

vasco wrote: post #18
didibus wrote: post #17

Earlier quoted context omitted.

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 pr…

A rational merchant would know that they are also incurring costs for handling cash, and depending on the size of the business that cost can in fact be higher than the cost of handling cards.

In fact, the low end of cash handling costs for a business will almost always be higher than the card fees alone, but of course there are other costs in managing card payments too, so it's not quite that clear cut.

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

#98

Post by Hunpeter »

vidarh wrote: post #91
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.

Handling cash costs more on average at least for smaller businesses than typical card fees. It's typical to estimate the cost of handling cash anywhere from 4% to as high as 15% depending on takings and size of transactions.

As someone with little financial knowledge, I'm curious why that is the case and how those estimates are calculated. I've seen stores offering a discount on cash payments, citing card-related fees as the reason.

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

#99

Post by SJC_Hacker »

Imustaskforhelp wrote: post #30
Tor3 wrote: post #28

Earlier quoted context omitted.

It isn't - using cards, with fees, is cheaper than cash. I realized that when shops started to refuse cash (even if cash is legal tender and they, by law, _have_ to accept cash). The argument? Cash is too expensive.

how is cash too expensive?? huh?

Time spent totaling it, transporting it to from bank

Having to buy a register / point of sale which can handle it

Hoping you employees don’t pocket a few bills here and there

Hoping you don’t get robbed

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

#100

Post by vidarh »

jader201 wrote: post #40
eszed wrote: post #29

Earlier quoted context omitted.

Cash handling isn't free! You have to pay someone's time to count + reconcile + deposit it, or If you're dealing at any volume, you'll pay an armored car service to collect it. There's inevitably "shrinkage", or else business processes (more time and more overhead) to avoid it. Cash is king for hiding transactions and avoiding taxes. If that's the situation then I won't say you don't deserve a cut, but for rules-foll…

> but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees. That’s not true at all, particularly for large purchases. If I go to an electronics and check out with $5000 in electronics, there’s no way that handling cash incurs the same expense to the store as the 3% fee ($150). Maybe for nickel and dime purchases, but that’s rarely the case. Even a $50 dinner doesn’t cost the re…

Average cash handling cost is typically estimated in the range of 4%-15%. You're right that there might be individual differences in what it would cost to handle a single transaction, but a store isn't in a position to pick and choose - they handle an aggregate. If your electronics store only handles large transactions, maybe their percentage would be lower, but that's extremely rare. And even so, handling large cash amounts comes with its own costs around security.
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