Thank you for your comments.

I assume you are re-posting what has been emailed in the newsletter .

Well you have misinterpreted some of the items.

To begin with first year maintenance is included in the price and also 100 credits.

So forgetting about the offers and sticking to the proposed list price scenario you would have to pay 180 euros to get the package that has 1 year maintenance included and 100 credits for transactions.

According to your business model, your site would be creating 50 transactions per month. So this means that for the first year you would have 50 x 12 = 600 transactions for which our proposed credit charges would mean 600 x .10 = 60 euros (thus 84 USD). You would be making 600 x 3 = 1800 USD. From this amount Paypal would most likely take 0.35 euros plus 3.5% of each transaction (plus 2.5% if you have to convert currencies)- this means ~ 210 + 6.30 = 216.30 USD to paypal. So your business model would be bringing you an operating income of 1800 USD per year with operational expenses 84 + 216.30 USD per year. This is a net operational profit 1499,7 USD. Of course you have CAPEX items to consider also.

Your proposed business model can of course be improved in many ways. Don't want to really open a discussion on this since I do not know what you would be selling at 3 USDs per pop.

Fact is that you are considering to start a business and as such you need to make these calculations. Most of our "users" as you claim are currently not doing e-commerce (well at least not with CB ). Each user must evaluate each individual business case. And granted, for some with small amount transaction payments the Paypal / CBPay transaction combo (even Paypal by itself actually) will make the case very marginal (you would be basically working for Paypal).

This is a choice and a decision everyone interested in doing business on the Internet should make. He/she needs to investigate alternatives, compare apples to apples and make a decision.

Regarding the credit transaction fee of 10 euro-cents, what the newsletter did not mention (thus you could not interpret or misinterpret) is that we would be offering bulk purchasing of credits at a highly discounted rate. Thus you could purchase all your yearly transaction credits up front and thus bring the transaction cost down by 40+%.

Fact is that this CBPay system is a commercial product to be used to generate income. Its a business tool.

Post edited by: nant, at: 2009/01/01 16:34

nvcacademy wrote:

Thanks for the explanation on how your "subscription" pricing will work. So my site which had over 7500 transactions in 2008 would pay .10 euros X 7500 or 750 euros, or about $1047 USD in fees paid to CB. Do I understand you correctly?

You understood correctly.

However, with this volume you might want to consider either purchasing bulk credits or perhaps a one time no transaction fee license.