PinPay Use Case 101: Will that be Cash or Credit?
Sometimes the obvious is a source of never ending amazement... anybody understands the question above, and yet, when you explain to people that PinPay is the first ever serious option for paying by cash online, sometimes their eyes glaze over... People do not recognize a solution for a problem they do not know they have. This is always one on of the great challenges in business development: just when is a need "real?"
Example: GoDaddy.com, where this site is hosted, has a payment program called Good as Gold, which is in effect a cash account for your GoDaddy.com bills and it gets you a 2% discount. So, clearly GoDaddy.com appreciates and understands the value of being paid in cash, and it has customers who prefer paying cash. Apparently, it has enough of both that it was worth developing this program. So PinPay may have a point in providing a platform that is a cash equivalent.
For online merchants the actual cost of accepting online payments in various forms is a bit hard to analyze at times. The only real way of doing it is to simply add up your total billing from your merchant account and figure out the percentage of sales, taking everything into account, various rate hikes, penalties, charge backs etc. You will see that your costs are far higher than the processing fees that you were quoted, because of the infamous fine print.
The number you get will include the cost of various forms of soft fraud, charge backs that maybe were not warranted, etc. On top of that, there is the cost of compliance and security, and the liability for having people's payment credentials on file. In short, the actual total cost of your transactions could easily be 3, 4, 5 times the basic rate that is quoted on your contract.
Because PinPay eliminates that liability - you won't have any credentials on file for a PinPay customer, as they are paying by cash (or at least the nearest online equivalent), so all you receive from them is money in your account, not payment credentials, and an authorization to charge them a certain amount. No doubt some merchants may see the benefit, and could decide to offer a discount for buying with PinPay. It simplifies their life and it lowers their cost. That does make a difference. In banker speak PinPay offers Good Funds in Real Time, most bankers don't even know what that is, for almost everything they deal with is revocable money.
Example: GoDaddy.com, where this site is hosted, has a payment program called Good as Gold, which is in effect a cash account for your GoDaddy.com bills and it gets you a 2% discount. So, clearly GoDaddy.com appreciates and understands the value of being paid in cash, and it has customers who prefer paying cash. Apparently, it has enough of both that it was worth developing this program. So PinPay may have a point in providing a platform that is a cash equivalent.
For online merchants the actual cost of accepting online payments in various forms is a bit hard to analyze at times. The only real way of doing it is to simply add up your total billing from your merchant account and figure out the percentage of sales, taking everything into account, various rate hikes, penalties, charge backs etc. You will see that your costs are far higher than the processing fees that you were quoted, because of the infamous fine print.
The number you get will include the cost of various forms of soft fraud, charge backs that maybe were not warranted, etc. On top of that, there is the cost of compliance and security, and the liability for having people's payment credentials on file. In short, the actual total cost of your transactions could easily be 3, 4, 5 times the basic rate that is quoted on your contract.
Because PinPay eliminates that liability - you won't have any credentials on file for a PinPay customer, as they are paying by cash (or at least the nearest online equivalent), so all you receive from them is money in your account, not payment credentials, and an authorization to charge them a certain amount. No doubt some merchants may see the benefit, and could decide to offer a discount for buying with PinPay. It simplifies their life and it lowers their cost. That does make a difference. In banker speak PinPay offers Good Funds in Real Time, most bankers don't even know what that is, for almost everything they deal with is revocable money.
Posted by Rogier at 8/2/2011 5:00 PM 
Categories: uncategorized
Tags: cash credit pinpay revocable fraud processing fees charge backs good funds real time
Categories: uncategorized
Tags: cash credit pinpay revocable fraud processing fees charge backs good funds real time
Comments