How BCard Makes Money
Every time you use a payment card, 1-2% of the total price is paid as a fee. BCard uses those fees to support web3 communities.
At the core of BCard is a simple idea: we can support causes we care about through financial fees that we are already paying. One such fee is called interchange, and it's how BCard creates revenue to support your favorite communities.
What is Interchange?
Interchange is the fee that is paid by a merchant (ie. the store you are buying from) to a network operator (ie. VISA/MasterCard). The network operator then gives the majority of the fee (>90%) to the bank that issued your card.
Interchange fees vary greatly depending on a variety of factors (ie. in-store vs online, credit vs debit, merchant type, etc.) Depending on where you live, interchange fees are 1-2% of a total transaction, and are built into the price, making them a hidden fee. In fact, many merchants charge the same price whether or not you are paying with a card, meaning you pay this fee regardless of your payment method.
How Does BCard Make Money?
BCard partners with a card issuer (Transcard) who gives us a portion of the interchange fee for every purchase you make. The amount we make depends on our total monthly transaction volume (ie. how much money ALL BCard users spend in a given calendar month). Here are the rates we currently have:
| Monthly Transaction Volume | Interchange Revenue Share (ie. reward rate) |
|---|---|
less than $1M USD | 0.10% |
$1M - 2.5M USD | 0.25% |
$2.5 - 5M USD | 0.30% |
$5M - 10M USD | 0.35% |
$10 - 25M USD | 0.40% |
more than $25M USD | 0.50% |
BCard keeps half of the fees above to pay for our expenses, and distributes the remainder to communities in the form of token rewards or onchain revenue.
Communities Working Together For Higher Rewards
Monthly transaction volume is calculated for all BCard users (regardless of which community you select) and the rates above apply to all transactions once the thresholds are met. This means that communities on BCard are working together to unlock higher rewards.
Nouns may not be able to drive $1M USD in transaction volume alone, but when you add BanklessDAO and Origin DAO to the mix, we can reach the threshold together and EVERYONE will unlock more rewards.
Why Isn't Interchange Revenue Share 1-2%?
BCard is currently in beta, and 100% owned and operated by the web3 community. As a result we have fewer resources than private VC-backed companies, and don't have access to preferred interchange rates.
As BCard gains users and transaction volume, we can increase our interchange rate to the 100% (ie. the entire 1-2%). This will take time, but if we succeed we can become a financial service provider that is owned by its users, which means we'll always have our users' best interests at heart.
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