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Comment by sudshekhar | Hacker News Reader

We're still playing with our pricing.

10$ joining fees and a 3.5% markup on adding funds is the current business plan.

We'll observe customer usage over the next 3-6 months and figure out if fixed fee subscriptions can be cheaper.

> Also how did you build a legal structure to allow this ?

We've partnered with Transcorp International Limited to operate the Cheq app in India. They are an RBI approved AD2 and PPI license holder. Customer funds are parked in an escrow account with them until utilized via the UPI network.

This is also why Cheq physical verification can happen only at Transcorp branches currently.

You can think of Cheq as a technology platform using Transcorp as our banking partner.

Or Transcorp, as a financial services firm, using Cheq as its technology partner.

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The summary says:

> Apart from the 10$ account opening fees, there are no other costs for using the product. Funds added can be spent anywhere across India.

As mentioned above, there is a 3.5% fee for adding funds.

I looked into Cheq before my recent trip to India. After doing the math I realised it was cheaper to take out some cash at the airport for smaller transactions and tips. I had no issue using my credit card at larger stores.

Currently, we're not charging the 3.5% fees to customers.

Its in the "plan" and we'll introduce it once the volumes go up enough to require compensations. Maybe in 2-3 months or longer.

Hence, the summary says 10$ only.

Part of the motivation is that even cash isn't accepted by everyone. Someone I was with last time I went had to get a stranger to make the UPI payment to vendor in exchange for cash. Nice of them, but what a faff, and my own Hindi wouldn't have been up to it. (Maybe you'd find someone willing and with enough English to arrange it, but that's only adding complexity.)

I'd definitely prefer this next time, if I could count on being able to set it up. (Or knew I'd go again so set it up while there for next time.)

3.5% is brutal. Wise is a near 0% solution, with just one time setup fee. I get the convenience aspect, but most people foreigners visit would accept a card (i guess?)

I can understand why 3.5% might sound high.

But cross border payments are expensive to facilitate. And this is the best rate we've been able to figure out currently.

Btw, In the US, Most ATMs are charging 3-5$ extra each time I withdraw cash. Plus the currency conversion charges.

Our prices are definitely better.

Often the most egregious fee is the crap FX rate they give you too - I assume because a lot of people just assume the rate's the rate, so it's completely hidden.

Do you pass on the wholesale rate from your provider directly, or is there some spread too? My bank Monzo for example gives me Mastercard's rate on the day the payment (in-person abroad or online in foreign currency) settles, so I always use it for such transactions even though it wouldn't otherwise be my first choice of card.

(Or alternatively, can I be charged INR to load Cheq account, rather than card's native currency? Then anyone with a better option for the conversion can do that.)

We're passing on the wholesale rate to our customers.

And plan to keep optimising these costs with time and volumes.

Also, loading Cheq with INR is not allowed for foreign tourists currently.

You can topup with international currency only

> But cross border payments are expensive to facilitate

Although that sounds logical, there are multiple services that offer 0% fx conversion. Wise, Monzo, Niyo etc. These travel cards are what I carry around in a different country.

Once we have ACH/SWIFT running smoothly, we'll start offering even lower rates

Adding funds via credit/debit card incurs an hefty merchant commission.

And hence, no forex company can't sustainably provide 0 FX rates for too long unless they're only taking funds via bank transfer.

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