interest costs going straight to directors via their loan. not a...

interest costs going straight to directors via their loan. not a bad return for them.

it will be interesting to see how Low cost routing ( sometimes called merchant choice routing) will affect the travel space. come end of May, I'd expect all banks and some other Card Present acquires (ie, FDI, Adyen, and Tyro) to have this capability on terminals activated. maybe early 2020 this will move to Card Not Present Payments which is where mint plays in the travel space.

for those who don't understand the above, google it (an RBA mandate). a travel customer of mints, if transaction was routed, would have their acquiring costs for a $2000 ticket reduced from, let's say $20 (1%), to max $0.30. mint's net revenue per transaction would reduce from, I'm guessing 0.60%, to <$0.25.

my personal belief is this change is 100% coming. I think mint will be charging a client more than 1% (more like 1.5%) so the saving for a client is significant. even if a merchant surcharges this amount, as a consumer ( ie, purchase of flights) I would not want to pay a $20 surcharge if the merchant had a choice to charge me just $0.30.

plus, there is no chance for chargeback on a routed transaction which will be of extreme interest to a travel company. I know this for a fact as I have discussed this exact thing with travel consolidators and companies with TTV of many billions.

as mint's CNP strategy is heavily skewed to travel, low cost routing will affect their profitability. About 90% of scheme debit cards can be routed currently and I would estimate card mix for mint's travel merchants to have at lease 50% scheme debit card mix. so for these routed transactions, mint (to remain competitively relevant) may make on a $2000 transaction $0.25 vs $12 today (net revenue after scheme/interchange/acquirer's margin).