Quote from: danystatic on July 12, 2017, 04:24:48 PM

1. "Monetha" will have single step and one fee only: a transaction fee of 1.5%.

2. MILESTONE #2
Full e-commerce solution + exchange to FIAT currency (EUR 1,7M/Mid 2018)
Accept Ethereum tokens, and enable merchants to exchange Ethereum tokens to their local currency and transfer funds to their preferred account. Smart contract wallet, real-time analytics, and a dashboard for merchants.

May I ask any insight into how is the Monetha team planning to exchange into FIAT , under what poor conversion rate?

In my professional opinion this is not fully possible.

Specially when all this is handled with a 1.5% fee (which includes some profit in case of success, but not enough to cover the FIAT exchange rates!!)

Seems mathematically doomed, this could be a dream come true, or a very ingenious path I can not see, or total bs.

I can´t see how this guys can deliver on their promise (Except with a very poor Exchange rate)

And what kind of legal advice would they bring to local markets they are aiming for which are regulated by law.

Or is this a more underground solution?

I´m quite interested and also very skeptical.

Example.

Amount of money after a $10 dollar transaction. $9.85.... <<<----- LOL ...... why not 9.90? LOL

How can you accomplish that? Which fees are not covered?
hmmm maybe its $9.85 in Ethereum, minus amount that the exchange will take for converting Ether to USD.
Probably as $0.60~0.99 cents? (ether to fiat is not cheap,)
so after $10 amount in Ether
you would get $8.85 amount in usd or even less.

Hello @danystatic! Thanks for the very good questions.

Here are our answers:

1. First of all, Monetha will integrate with cryptocurrency exchanges to enable merchants to exchange crypto to FIAT (government backed currencies) seamlessly. For example Kraken.

2. 1.5% commission fee that Merchant pays for Monetha's payments processing and Decentralised Trust and Reputation System does include an exchange rate.

And the reason is: in the payments industry, there is no standard of having an exchange rate included into the payment processing. Exchanging to a different currency is a merchant's prerogative and no one enforces it.
PayPal and other major payment processing companies do not include an exchange rate into its transaction fee. For example not only does PayPal take 2.9%-4,4% (depending on a country) + $0.3 transaction fee from the merchant, but also exchanges the currency with a bigger rate than the standard.

All of the currency exchange is being done for a separate fee. For example, VISA not only has a separate exchange rate fee (which is usually bigger than a regular exchange rate fee) but also a Dynamic Currency Conversion fee (which is normally around extra 2%) and sometimes even a foreign transaction fee (1%-5%, usually 3%) if the payment was processed abroad.

Moreover, your currency exchange is always an optional thing. You cannot and should not include it into the transaction fee.

3. Regarding the fees paid by the merchant:

For example, here is the fee schedule for one of the most popular crypto exchanges - Kraken: https://www.kraken.com/en-us/help/fees.
If you are a merchant in Europe, the highest transaction fee that you will pay using Monetha is 0.26% when the volume is lower than 50.000. To withdraw euros via SEPA you will pay EUR 0.09.

So, if we are taking the example you provided and if merchant is in Europe and receives Ethereum based cryptocurrency and exchanges it to euros it would go like this: 10 - (10*0,015) - (10*0,0026) = 10 - 0.15 - 0,026 = EUR 9,824

We also acknowledge the fact, that in other cases and other countries the exchange rate might be higher.

But, you have to remember that the merchant does not only pay a transaction fee when accepting payments with traditional payment gateways. There are bunch of other fees that merchants have to pay, such as:

● Retrieval Request Fees and Chargeback Fees are paid when someone claims for a chargeback. The best-known payment gateways such as PayPal and Stripe charge merchants a USD 15 chargeback fee.
● Flat fees that include: Terminal fees to buy the needed terminal for retail merchants, PCI fees paid to Payment Card industry for compliance OR noncompliance
● Annual fees, Monthly fees, Monthly minimum fees, IRS reporting fees, network fees, etc.
● Incidental fees that consist of: Address Verification Service (AVS), Voice Authorization Fee (VAF), Batch Fee, and NFS fee.
● Marketplace fees for Alibaba, Amazon, etc for "providing and facilitating" the trust system. Think about his use case: if you are a small merchant in China, the only way to sell goods to the global world and be trusted at the same time is to join the Alibaba. You won't need to pay a fee for a payment gateway, but Alibaba will charge you a pack of other high fees.

When combined, it calculates to a high amount of money that the merchant has to pay per year for a payment processing.

4. Regarding the business model:

As we do not include an exchange rate, here is the situation:

Monetha will charge a 1.5% transaction fee from merchants. Of that, 0.5% will go to a smart contract for the Monetha token holders and other 1% will go to the company as revenues. An interesting fact is that the average traditional payment gateways take approximately only 0.25% + 0.1 from the total fee as their revenue. This 0.25% + 0.1 is a markup fee to the interchange rates.
For example, if the total transaction fee that merchant is charged is 2.9% + $0.3, the 2.65%+ $0.2 is the interchange part that banks, credit card associations and others are dividing and 0.25% + $0.1 is the markup part, which payment gateways take home as a revenue.
Having this in mind, we have almost four times the rate to do business with as compared with what an average global payment gateway takes per transaction as their revenues.