About those Frequent Flier Miles...

One of the primary benefits Mpayy's payment system will offer to merchants is savings vis-a-vis credit card processing - both in the base rate, and the consistency of rates. This will stand in stark contrast with the variable interchange fees that are charged by the major credit card networks on an industry-by-industry basis, according to Zhu Wang in the Payments System Research Department at the Kansas City Fed. (See paper here)

According to a Diamond Technology Consultants, 44% of interchange costs go to pay for Rewards programs, while none of it is passed onto the merchants. Further, merchants are likely to pay 3% for association branding costs, while the interchange costs comprise only 14% of the fee.

Those rewards programs, also do not go on to necessarily benefit the consumer. A recent comment from Conde Nast Portfolio.com (@ MSNBC) report notes:

The basic American AAdvantage MasterCard issued by Citibank carries an annual fee of $50, the interest rate on purchases is more than 17 percent, and the cash advance rate is north of 22 percent.

In other words, the consumer and the merchant split the bill on purchasing airline miles through credit card fees. Merchants are paying through the aforementioned interchange fees, of which there are an estimated more than 100 different rates. Similarly, consumers are paying annual fees and virtually usurious interest rates to make purchases that may not even be worth the bytes they are stored in. The story continues:

"For example: Continental Airlines last month announced a wide-ranging increase in the price of its best awards. The number of miles required to get a free first-class domestic ticket rose about 11 percent; the cost in miles for some international business-class seats rose by 25 percent."

Mpayy to the Rescue

Mpayy will offer users a 100% free service to make purchases. In fact, it will be even better than that providing a network through which consumers can make purchases for $0.99 on the $1.00, and we are working on a universal rewards program that will be available to be used as cash anywhere Mpayy is accepted. Members can transfer moneys among themselves as much as they like... there is simply no reason to pay 15% interest on that online t-shirt purchase.

For merchants, Mpayy will offer rates that start well below credit card rates and go only lower depending on the volume offered. There will be no hardware required. Mpayy will never withhold merchant funds should merchants find themselves in violation of some unpublished Kafka-esque rules. All of this, plus, Mpayy will assume 100% of transaction fraud risk removing the burden of maintaining secure credit card information allowing companies to focus exclusively in their wheelhouse.