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Alexander Peschkoff

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Alexander Peschkoff - TEDIPAY

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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Emu - flightless bird or soaring eagle?

07 October 2012  |  2616 views  |  0

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?..

TagsMobile & onlinePayments

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