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Sorry about the slow reply here. With the virtual credit cards, you also need a billing address in most cases. I guess that can be the same for all customers.

by rojeee 6y ago

Sorry about the slow reply here. With the virtual credit cards, you also need a billing address in most cases. I guess that can be the same for all customers. Perhaps they also get an email address with it and that handles all the receipts/invoices. Alternatively they can all be sent to some service/app where they can be sorted/managed. I would like to use something like this if I'm not keen to share my card details with a company e.g. because I know they've had a data breach in the past or something. How much would I be willing to pay for it? Probably not much to be honest, maybe a few quid? Must admit, I like the acquiring idea more. On the merchant acquiring stuff I can see the attraction for merchants but what's the incentive for customers? I guess there has to be some other benefit... e.g. offering credit on decent terms to customers but here you are competing with credit cards? Or maybe offer discounts for paying using this service. Maybe you can offer a discount AND credit. I guess you'd need to find out how price sensitive the merchants and customers are. Experience suggests that small merchants are price sensitive to acquiring fees as they have minimum spend limits etc. Large retailers e.g. Tesco don't care so much.... though I was buying a car at the weekend and the dealer stopped accepting AMEX due to the acquiring fees... I guess they were cutting costs in the face of Corona Virus recession. As you note, perhaps the app could collate all your receipts and warranties - could be useful. Itemised receipts would be particularly useful for some. I imagine a company which offers this service (in the EU/UK) would be an open banking payment services provider. That is, customers add their bank account details and permit the service to "push" payments directly to retailers when they buy something via an API. Of course, customers would manually approve each payment via the app or whathaveyou. Challenges: 1) how do you handle off-line payments? 2) how do you handle disputes? On the history of merchant acquiring: maybe this helps: https://blog.thesharmas.org/2020/06/05/history-merchant-acquiring/ https://blog.thesharmas.org/2020/06/05/history-merchant-acqu...

ideas-are-cheap 6y ago
No worries - there is hardly an obligation for you to respond :). Re that anonymous payments idea - you are thinking along the same lines as me re the email and billing address. Getting all the junk/advertising email sent to one place would be a good feature. Really though, asking people to pay for anonymous transactions is simply an 'in'. I don't think there is a big market there, but I think there is _a_ market. The goal would be to use that as a springboard to start offering banking services to consumers (e.g. credit, payment consolidation), and merchant banking to online retailers (similar services plus others, e.g. perhaps you could buy a saas business' future cash flows off of them). If you were able to own both sides of that you would not only make it much easier for people to interact with new online businesses safely, but also provide an integrated identity/payments service to said businesses. You would aim to reduce the cost of the original product to 0 as you became able to generate revenue in other ways. --- The acquiring idea... You have some interesting thoughts here. Yes I think you're right that finding an incentive for consumers to use the service is not immediately obvious. Long run, I do think that you would be able to offer credit (both to merchants and consumers) and other financial services but I don't think that is a viable 'way in' for the business. To start with, I think it needs something simpler and more obvious that you can support with a relatively small number of customers. Ideally without stepping over more regulatory boundaries... you mention discounts and I think that they are the obvious target (though I may well be wrong). I also think that discounting (or other offers) for small businesses is not very well served currently. Here's an example (fairly arbitrary) of how you could try and kick the thing off - it's obviously a sort of growth hack but its semi-believable. Pick a student city and convince a load of local bars/restaurants to sign up on the merchant end by promising them no fees and a way to advertise offers to the next batch of students without having to put up flyers and so on. You would then get students to sign up with the promise that they will be able to use it to get cheap food and drinks. You would monetise by charging a referral fee on people redeeming the offers via the app. If that worked, you would replicate the model in other cities while also trying to expand the number of merchants signed up in existing cities (to appeal to more than just students). Long run, I think the goal of this business would be to offer both merchant and retail banking services on top of the payments system. In addition to that, you could also open up your platform for other financial service providers - with a referral fee or service charge model. Your idea of implementing this via open banking is quite interesting - I must admit, I didn't actually think of that. Would you be interested to talk about this in a more... tangible way? You can reach me on ideasaintworthmuch at mail dot com (mail is not a typo for gmail).

by rojeee 6y ago

ideas-are-cheap 6y ago

No worries - there is hardly an obligation for you to respond :). Re that anonymous payments idea - you are thinking along the same lines as me re the email and billing address. Getting all the junk/advertising email sent to one place would be a good feature. Really though, asking people to pay for anonymous transactions is simply an 'in'. I don't think there is a big market there, but I think there is _a_ market. The goal would be to use that as a springboard to start offering banking services to consumers (e.g. credit, payment consolidation), and merchant banking to online retailers (similar services plus others, e.g. perhaps you could buy a saas business' future cash flows off of them). If you were able to own both sides of that you would not only make it much easier for people to interact with new online businesses safely, but also provide an integrated identity/payments service to said businesses. You would aim to reduce the cost of the original product to 0 as you became able to generate revenue in other ways. --- The acquiring idea... You have some interesting thoughts here. Yes I think you're right that finding an incentive for consumers to use the service is not immediately obvious. Long run, I do think that you would be able to offer credit (both to merchants and consumers) and other financial services but I don't think that is a viable 'way in' for the business. To start with, I think it needs something simpler and more obvious that you can support with a relatively small number of customers. Ideally without stepping over more regulatory boundaries... you mention discounts and I think that they are the obvious target (though I may well be wrong). I also think that discounting (or other offers) for small businesses is not very well served currently. Here's an example (fairly arbitrary) of how you could try and kick the thing off - it's obviously a sort of growth hack but its semi-believable. Pick a student city and convince a load of local bars/restaurants to sign up on the merchant end by promising them no fees and a way to advertise offers to the next batch of students without having to put up flyers and so on. You would then get students to sign up with the promise that they will be able to use it to get cheap food and drinks. You would monetise by charging a referral fee on people redeeming the offers via the app. If that worked, you would replicate the model in other cities while also trying to expand the number of merchants signed up in existing cities (to appeal to more than just students). Long run, I think the goal of this business would be to offer both merchant and retail banking services on top of the payments system. In addition to that, you could also open up your platform for other financial service providers - with a referral fee or service charge model. Your idea of implementing this via open banking is quite interesting - I must admit, I didn't actually think of that. Would you be interested to talk about this in a more... tangible way? You can reach me on ideasaintworthmuch at mail dot com (mail is not a typo for gmail).