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Comment by kcsomisetty | Hacker News Reader

the premise is, it is marketed to merchant as 'the business you would not have without us'. Merchant will treat this as 'referal commision + payment processing'

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And pay 8% for the service? I'd think at such a high rate, having that extra business doesn't really strike me as worth getting at that point.

Disclosure: I work for a company somewhat in this space.

If their value proposition is true (the customers would otherwise not have come to you), then it is 8% off sale that you otherwise would not have received. Paying typical card fees, but receiving no sale is a far worse proposition.

If every single order you get through it is an order that you definitely would have never received without the system, then it's a good deal. Other than that, it's maybe good once, but when customers start using it on a repeat basis, there's no benefit to the store.

They're justifying it as a customer acquisition expense, but you have to pay for it in perpetuity. Not good.

The problem I see with that approach is that there is no guarantee it will bring in new customers. Seems just as likely that it will actually bring existing customers. Second, if they are trying to get traction, then they need the merchants on board to create enough supply side to have ordinary consumers want to download an app and use it. They just created friction for merchant sign-up.

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