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You could easily pay 2$ per transaction + % of the revenue to credit card processor. So, 2$ price tag = 0$ profit, or even loss. Also it's probably about 8 tim
by rarestblog 16y ago
You could easily pay 2$ per transaction + % of the revenue to credit card processor. So, 2$ price tag = 0$ profit, or even loss.
Also it's probably about 8 times simpler to get one $15/month subscriber than eight $2/month subscribers.
It's the market. If it was feasible to sell those services for $2/month - there would be competitors taking advantage of that fact. Since there's (I assume) none - that means it's not economically reasonable to sell something at that price.
- petercooper 16y agoIf it was feasible to sell those services for $2/month - there would be competitors taking advantage of that fact. I think Apple has proven that with the App Store. You couldn't buy many professionally developed for a few bucks 5 years ago, even those that took as much development time as the top titles on the iPhone now. Apple has made the billing and distribution side so simple that development time and expenses are almost the only variable.
- rarestblog 16y agoYes, but that actually proves the point. I don't mean that it actually costs banks $2 to handle a transaction. It's what they charge small businesses for a transaction. If you're Apple and can negotiate a 5cent (or whatever) fee per transaction and able to sell apps to millions of customers - then $2 apps would be profitable. For all other approx. 99.999% of companies out there - $2 per app or month is just not feasible.
- Travis 16y agoFrom what I've seen, cc fees are usually about .40c + up to 3% a transaction. A big cut (25%) of a $2 charge, but far different than suggesting it's 100+% of revenue.