3. The Parties.
A consumer who wants a
discount on a purchase, or bill
payment.
A credit cardholder in need of cash.
50% of all payday loan customers
have a major credit card.
An online merchant, utility,
etc., who accepts credit card
payments.
5. You could require that some, or all, of the parties have a
"verified PayPal account" to insure that the parties are
using their true identities.
Additionally, you could have consumers, and/or credit
cardholders, register with you and verify (in the "terms of
use") that they are using their true name, date of birth,
address, etc., and that they agree to use the service only
for lawful purposes, etc..
You may need a license to transmit funds. However, these
services could be outsourced (e.g. be paid peer-to-peer
with PayPal, Stripe, etc.).
6. Example
1.Consumer wants to buy a ring from the
merchant for $1,000.00.
2. Consumer has $1,000.00 available to
purchase the ring with an electronic funds
transfer (EFT), online checking, or PayPal
account.
3. Consumer wants to get the ring at a discount.
4. Consumer sends you the purchase
information on the ring (and may send you
$1,000.00 too).
7. You
You
Customer gives you the purchase
specifics of the item (e.g. Ring)
to buy.
The customer may specify a
minimum acceptable discount.
For example "I do not want to
spend more than $975.00 for the
$1,000.00 ring."
8. You
You
You email pre-registered money
seekers, purchased leads, or
otherwise advertise the available
cash on your website.
General details can be posted
publicly (e.g. Purchase amount,
type of item (i.e. Ring), time left,
etc.). Persons who are interested
can log on to the website for
further information.
Who want's to bid on a
$1,000.00 purchase.
10. Alternatively
One or more credit cardholders can leave credit card information
with you with standing orders.
For example: The credit cardholder may submit "For the next 24
hours, I allow my credit card to be used for any purchase of up to
$500.00. I will accept a 10% discount."
So, in this case, any incoming consumer order that matches that
range can be filled immediately.
Likewise, a consumer with a reoccurring bill (car payment) can
place a standing order and discount amount (e.g. I will pay
$775.00 for an $800.00 payment).
11. You
You
Terms met !
You select and notify
the winner (e.g. Credit
cardholder who will accept
the least amount of money)
and consumer.
$949.00
Wins!
12. Online
merchant
Credit cardholder
provides credit card, or
PayPal account, info to
you.
You make the
$1,000.00 purchase for
the consumer using the
credit cardholder's
credit card or PayPal
account information.
Info given
You
You
15. You
You
Consumer pays $949.00 to
Credit cardholder (e.g. via
PayPal).
Consumer saves $51.00.
Credit cardholder receives
$949.00 at his credit card's
purchase interest rate, at an
overall cost that is less than a
payday loan or cash advance.
16. Alternatively, instead of you giving $51.00 to the
consumer, you could give $25.00, because the consumer
only requested a discount of $25.00. In this case you
would keep $26.00.
18. Conclusion
You earn revenues (e.g. membership fee, listing fee,
etc.) from providing an online exchange where parties
match their desire for a discount on a purchase/payment
with a credit cardholder who needs cash. Consumers
(including businesses) can save money on payments and
purchases. You incur No bad loan risk.
Credit cardholders can receive cash in exchange for use
of their credit cards (i.e. a synthetic cash advance) that
is cheaper than other short term loan vehicles.
Credit card issuers can capture a portion of the payday
loan industry's clientele (a multi-billion dollar a year
industry).
