The Problem

Credit cards and money transfer systems, while widely used, face significant challenges. From hefty fees and fraud risks to chargeback disputes and remittance complications, these issues affect both consumers and businesses globally.

Card Fees

Merchants face significant costs when accepting credit cards, primarily in the form of processing fees ranging from 1.5% to 3.5% per transaction. These fees, paid to banks and card networks, can substantially impact profit margins, especially for small businesses. To offset these costs, some merchants pass them on to consumers through surcharges or cash discounts.

Key issues:

• High processing fees (1.5% - 3.5% per transaction)

• Disproportionate impact on small businesses

• Complexity of passing costs to consumers (surcharges, cash discounts)

Card Fraud

Credit card fraud remains a persistent problem in the financial industry, causing billions in losses annually. Fraudsters employ various techniques to steal card information and make unauthorized purchases. This includes sophisticated methods like skimming devices on ATMs, phishing scams to trick cardholders into revealing sensitive information, and large-scale data breaches targeting merchant or processor databases.

Common types of fraud:

• Identity theft

• Skimming

• Phishing attacks

Chargebacks

While designed to protect consumers, chargebacks can create significant issues for merchants. When a customer disputes a charge, the merchant not only loses the sale amount but often faces additional fees. The chargeback process can be time-consuming and resource-intensive, impacting a business's bottom line. Moreover, a high rate of chargebacks can lead to penalties from payment processors or even account termination.

Chargeback challenges:

• Financial losses for merchants

• Time-consuming dispute resolution

• Risk of account penalties or termination

Remittances

Sending money internationally, particularly for remittances, faces several challenges. Traditional methods often involve high fees and unfavorable exchange rates, significantly reducing the amount received by the intended recipient. The process can also be slow, sometimes taking several days for funds to be available. Additionally, recipients in some areas may have limited access to financial services, making it difficult to collect transferred funds.

Remittance issues:

• High transfer fees and unfavorable exchange rates

• Slow processing times

• Limited accessibility in some regions