Less than a week ago, Finextra's News section ran a press release by Emu who promised a Holy Grail alternative to Square and iZettle - no dongles, and (almost) no
charges (Emu's Web site does prominently display "0% per sale").
That news article mentioned "no charges for the first £1,000 of sales and a flat fee of £4.99 a month after this". Emu's T&C state that the merchant's annual turnover is not to exceed US$100K (let's say
£60K). A merchant fee of £5 per month on the basis of a monthly turnover of £5,000 translates to... 0.1% of sale amount.
Anyone even remotely familiar with the interchange fee knows that Visa/MasterCard charge much more than that. Hence, Emu would be losing money on every transaction.
Now, Google can afford a loss-making business model when it comes to payments. Does Emu (operated by emu Retail Network Ltd) has similarly deep pockets or high-volume
advertising arm to leverage transaction flow of payments? Or is it the case of "Emu is a
flightless bird"? Or are they a new stealth start-up similar to the likes of Tappmo (which
is yet to soar)?
Can anyone at Finextra cast a "reliably informed" light on this enigma?..
© Finextra Research 2014