It’s rare to find someone in the payments ecosystem that’s aligned on fairness and transaparency.
In fact, those two nouns are polar opposite of how the whole of the payment ecosystem makes their money.
Needlessly complicated interchange tiers.
Flat rating.
Hidden fees.
Sure, great for payment bros, but bad for society that throw away an estimated 3% of GDP on the cost of moving money (and what is tantamount to legalized fraud in our book).
Which is why when Infinicept, a payfac as a service enabler, asked us to partake in a bill of rights effort, we were happy to show support.
What Infinicept is asking for is so obvious you’d think it’s implied.
Kinda like when you sign a contract you expect the other party to honor that contract.
You clearly don’t know how payments processing works.
The majority of processors stuff bullshit fees and lie about interchange categories to make more money on the back of the merchant, who actually has to produce something of value or he/she goes out of business.
Real fair, ain’t it?
Infinicept’s Bill of Rights efforts flies in the face of status quo payment processsing.
It tells processors, in essence,
Don’t payments bro me.
The full scope of the Bill of Rights is below. In summary, it tells processors that support payfacs that the need to be good, honest partners.
Here’s what’s happening.
Payfacs write to backend processors since becoming a processor would otherwise take a few years and a few million dollars.
Processors are losing material processing volume (and ultimately all their volume) to payfacs.
By and large, payfacs are verticalized software companies providing real value to merchants. Every merchant we’ve ever dealt with hates their processor and is happy to move processing to a provider that can do something as simple as pick up the phone.
With volume moving over, so too move the processor’s margins.
Because the buy rates a software company payfac gets are much lower than the margins processors make with their direct clients.
So what do the processors do?
Don’t laugh at their proposed answer.
The same processors that can’t spell R&D are going to recoup all their margins (and then some) with…
drumroll…
Value added products.
That’s right.
As if there weren’t enough venture-funded startups offering banking as a service with true product differentiation and real R&D, legacy processors are going to somehow convince everyone that what they have is better.
Oh, so you screwed me on processing and now we’re supposed to trust your inferior, back burner projects as viable solutions? Of course that makes sense!
Sure thing, because payments companies are exalted for their quality software and innovation.
Infinicept demands that processors not force crap solutions on the payfac, nor obfuscate contract terms like their do with their direct merchants to make margins in unscrupulous ways.
Basic stuff, sure.
But where there’s a loophole, payments bros line up to exploit it.
So yes, the obvious does need to be said, and we’re happy to shout it from the rooftops with Infinicept.
The goods news? Over the next decade payments bros will fade into lore. Verticalized software is taking care of them, and efforts like the Embedded Bill of Rights are closing any loopholes that might give them breath.
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