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They're obviously taking a loss on this (due to credit card fees) if the recipient gets the full amount sent. So this must be a loss-leader that's building up t
by jey 13y ago
They're obviously taking a loss on this (due to credit card fees) if the recipient gets the full amount sent. So this must be a loss-leader that's building up to something else where they expect to make a ton of money.
That "something" is most likely just "replacing cash and cards", but will be interesting to see how it plays out. It's a bold move regardless.
EDIT: I meant debit card transaction fees, not credit card fees.
- sandipc 13y agoDebit cards only. I'm sure the fees are significantly lower for debit vs. credit cards.
- jey 13y agoYeah, true. But isn't it still in the neighborhood of 2%?
- lachyg 13y ago0.05% + 22¢ for debit cards.
- hyperbovine 13y agoThat is an insane amount of money to be losing if/when this thing takes off. There must be more to the story.
- pranavpiyush 13y agoI don't think so. Its a user acquisition cost. Instead of putting up Ads, they're offering a free service. Good tactic.
- privong 13y ago> I'm sure the fees are significantly lower for debit vs. credit cards. This used to be the case, but in recent discussions with retail owners I've been told that the fees are now comparable.
- robotresearcher 13y agoIn my Canadian city high-volume, low-price businesses such as independent fast food places take debit only since credit card charges would remove a good bit of their margin on a sale.
- ewolfe 13y agoThere is no fee over an ACH transfer.
- jser 13y agoI believe that Amazon Payments is the only system that lets you pay someone with a credit card, although it's limited to $1,000/month (otherwise people abuse it, sending cash to each other to rack up points on their credit cards).
- codex 13y agoWhat about PayPal?
- cstrat 13y agoI thought that there were now ways for payment processors to flag that a transaction is not supposed to earn points? (eg. balance transfers, cash withdrawals etc...) Otherwise I could deposit $10,000 from my credit card into my on-line gambling wallet, then withdraw it, repeat...
- encoderer 13y agoI challenge you to find a website that will let you charge $10k into an online gambling account from a credit card. And any that do exist will charge fees higher than credit card rewards in most scenarios. But yes, you also will not earn points on balance transfer transactions. But they typically are processed via ach.
- eigenvalue 13y agoThe better example is the scam people had going for a while where you could buy $1 commemorative coins (e.g., http://en.wikipedia.org/wiki/Sacagawea_dollar http://en.wikipedia.org/wiki/Sacagawea_dollar ) from the US Treasury for $1.00, with free shipping (the mint made many more of them than the demand, and wanted to get rid of them). Some people bought $100k worth of coins on an Amex card and kept the miles (only problem with that is depositing a zillion coins with local banks). That's now been shut down if I'm not mistaken.
- jhardcastle 13y agoSquare has had a system called Wallet for several years where if you enter a store using Square, and it detects your phone in the vicinity, you can "pay by name." You walk up to the register, say "I'm John Smith," and they tap your name on the Square register to check you out. No need to take your phone out of your pocket. Perhaps this is just an attempt to backdoor people into becoming users of Square Wallet. Give away person-to-person transactions for free, get a massive user base for business-to-consumer transactions and charge the businesses for the use of your network.