Yeah. High-margin, high-end businesses can afford the fees. If there's a space to compete it's low-margin businesses where 3% really stings, even if it's 3% of a smaller gross. I used to work with a company that served mainly immigrants and blue-collar workers, and something lower-fee than credit/debit was a constant conversation (we were partway through building an ACH backend by the time I left, but I don't know if that ever made it into production given concerns we had).
We tried with SMBs (it was our original focus, low net margin businesses). But 1. Deployment times are way worse in person, 2. Merchants still actually didn’t care (they said they did! But there was no strong need). 3. conversion at checkout is lower for small tickets than high tickets.
SMB business model just didn’t work, with tons of white glove customer support needed for a customer we’d make $20-$50/month in fees
With high ticket sellers the purchases are high intentionality enough that you can convert customers.
Not only only low margin but even more low price products. If you sell ice cream for $1 there is not only 3% fee but also minimal transaction fee like 30cent.
I recently made a purchase in an Ontario used book store that only took debit cards and cash (and the clerk was behind a COVID shield). Today I went to a used book store in Buffalo, NY that took credit cards (and the clerk was roaming around the store). Somehow that openness and lack of friction got me to buy more books for much more money. And I would gladly return...
