Ann: Agreement to Provide Payment Solutions to RKN Users, page-65

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Hecticpharmer

854 Posts.

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25/08/22

13:07

Post #: 63318832
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Originally posted by dubspec: ↑

hey guys. thought id lrt you know my thoughts about point 1. moreso pros cons of own license. again this is just yo help you understabd the market for Merchant Acquiring (shortened to 'acquiring' which is the acceptance of payments (ie, cards).

getting osn license

PROS
- no need to rely on 3rd parties, who in theory, could cut the relationship and leave you in a pickle.
- you own the client outright
- with economies of scale and robust operations (not over spending on ops) will provide cost advantages

CONS
- there are costs. compliance, licensing, billing engines, serving staff, tech, etc. putting capital in means you need a return on that capital. it means you need to really have a decent book of volume/clients to make ot worth while. these costs are not psid by an ISO.

**it really all comes down to cost. considerations are**
- what are the fixed costs to maintain the license.
- what cost are involved in improving capabilities to ensure you stay competitive
- what are the marginal costs of adding volume/clients into Nov? what is the marginal cost having the license vs tapping of soneone else's license.

owning the client is also a consideration. For instance, as an ISO you dont contract the cluent so don't own the contract. You only own the relationship. some acquirers will try and contract ISO that they can't take the volume from that acquirer if you want yo move to another acquirer - this means you are in a way stuck with that acquirer.

as a TPP (like ISO but own branding, billing, servicing, contacts, etc) there is way more freedom than an ISO but you arent respinsivle for maintaing the license and tech that runs the license (the acquiring engine/switch).

let me know if you have any questions.

i was also approached yesterdsy by a European company to integrate crypto payments into my gateway. im a small gateway (but nimble in tech)and was targeted so no doubt a lot of other gateways are thinking of it or have been approached. So imo its really important to understand NOVs ETA for only crypto in their gateway. If NOV had a big book already it wouldnt matter as much but it seems NOV is selling the crypto as the competitive advantage yet in 6-12 months that advantage may be gone.

let me know if you have any questions

ps: my fat fingers and mistyping is just part of my package - please forgive me

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Thanks for the professional tips! How do you think NOV can improve on their business prospect given they have their own acquirer license.

I guess we were a bit short sighted previously as we only care about "taking a bigger cut when we do transaction".

Given you are already in the space, do you reckon NOV can also provide the essential support and worthwhile to partner with "smaller gateways" like yours? To an extent, I see you guys being competitors but nonetheless I believe each gateway will be able to provide its own advantages.

NOV Price at posting: 21.0¢ Sentiment: None Disclosure: Held
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