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Cheaper alternative to card surcharges in checkout solution

Simone Martinelli is the founder and CEO of U.K.-based checkout solution startup Volume. However, very few customers know that they have also hidden eCommerce fees every time they make an online purchase. This fee is in the form of paying commissions to cards and e-wallets. These remain included in the funds moving from their bank accounts to the business accounts of merchants.

Martinelli believes that these surcharges from third-party providers like MasterCard, Visa, and Stripe are anywhere from 2% to 7% of the sale. This forces merchants to raise their fees which in turn impacts the price an end consumer pays.

The firm is leveraging the variable recurring payment (VRP) mandate for sweeping. This is an extension of the open banking payment initiation service. This allows the automatic transfer of funds between a consumer’s accounts. This is to provide online shoppers with a much lower bank rate at checkout. A part of its goal is to drive transaction costs to zero.

With a one-click checkout solution, users pay just a 0.75% charge. This charge is for executing an online payment from their bank through open banking. Martinelli told PYMNTS in an interview, “You end up paying $28.75 for a product, and the merchant receives $28.65. The 10 cents difference, which is our fee, is 3x cheaper than Stripe and 10x cheaper than PayPal.”

He added that it is the one-click and super secure that every retail customer’s experience should look like in 2022.

However, benefits come at a high cost. Martinelli acknowledged that there are still individuals who would prefer to pay with credit and debit cards. This is because of the insurance protection. However, the 2-7% surcharge on eCommerce purchases consumers could get avoided by making a direct payment.

Martinelli said feedback from eCommerce merchants shows that the 3D Secure (3DS) protocol is not effective in preventing fraud. Founded in May 2021, the young firm already onboarded over 50 U.K. merchants. Martinelli said they want to move beyond Volume’s one-click online checkout solution.


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