7A – Testing the Hypothesis, Part 1

Businesses have to use traditional payment gateways services as well as accept credit and debit cards which all have high transaction fee. Thus, businesses have to factor that into the cost price of products and end consumers unknowingly pay for it. This is further worsened when tourists go overseas and want to purchase items easily with their digital currency (card) but will have to pay currency conversion fees.


There are two parts to the issue and hence I will have 2 "who,what,why" paragraphs.
Who
Businesses / merchants / store owners / e-commerce websites/ startups


What
They have to pay exorbitant fees to banks and payment gateway services (online and physical stores) for the simple transfer of digits on a database
Hard to accept foreign payment systems( especially with so many digital payment systems) from tourists/visitors and that may upset their customers or even lose the customer

Why
Many people are used to having debit cards and credit cards and the ecosystem has not been disrupted and there are no mainstream alternative solutions so banks and payment services are able to monopolize payment systems.



Who
End users- Tourists , young adults , tech savvy people

What
Tourists- Having to convert their local currency into dozens of currencies to travel the world and spend overseas. They have to pay fees in terms of the spread of the buy sell rate . They have to keep the remaining loose change which they might not be able to spend or change back into their own currency
If tourists want to buy high ticket items which cost a lot , they would likely use a credit or debit card which the are likely to charge fees for conversion as well, not to mention the bad rates for the currency

Young adults and tech savvy people are on their phones and may not always carry their card. These people want a mobile solution to pay for goods. This is especially true for countries where there could be many vendors that do not accept credit and debit cards ( e.g China street vendors accept mobile payments and refuse cash)



Why
Countries only accept their own currency and if they do accept foreign currency they impose a fee to process such transactions.
Tourists have to abide by this norm because they is no other way.
Credit and debit cards can still be used and maintain such convenience but people tend to avoid it as they know banks charge high fees for conversions




Interview Summary

I have asked a couple of my friends who have plans to start their own business and one that had a partnership for their own shop. They are receptive to having a solution to reducing the fees paid to accept digital payments but are a little skeptic.
They like a solution to allow tourists to easily spend at their stores especially since they know China tourists have been on the rise and they use mobile payments systems which are not supported where the respondents are from.
Other respondents said that it is troublesome to handle different types of currency when travelling overseas especially when dealing with coins. They all mention they avoid using credit or debit cards at all costs as the fees are unjustifiably high , although they say it still is convenient when they run out of cash or need to purchase items that cost a lot.
They said with such digital improvements in our lives , there should be some improvement in the digital currency world