That’s a bit of a leap. It looks like fully automated compliance from the existing services. From collection to remittance is about 3-5k a year. With more competition it will likely become cheaper.
Why wants to win by being the asshole who did it for $500 instead of say a percentage of revenue?
Basic economic principles. You compete by lowering your price. So more competing providers would make it highly likely that price moves closer to cost, because there is a higher chance that one will defect from the current price structure.
To put it plainly. You run a gas station but the guy across the street gets all the customers. You both charge $3 but your cost is only $2. What do you do to get more customers? Lower the price.
I wish I shared that faith in market forces. What seems more likely to the cynic in me is that a big player like PayPal will incorporate it into their merchant services, obtain some overly broad patents on the process, use those to stifle competition, and make the service a nominally cheap add-on (but only for their own customers).