One-Size-Does-Not-Fit-All: Flexible Pricing Models

In Digital Transactional Processing, Industry Solutions, Insights by Blake McClelland

For all the parodies of startup culture, getting one off the ground is no joke.

by Blake McClelland
Director of Business Development

Whether it’s made up of sweat equity, bootstrapping or serious VC, cash is almost always tight (until that magic day when it isn’t). Founders quickly learn how to work hard and do a lot with a little. If it’s a payment product that they’re creating, they also have to factor in the complexity of multiple players and some potentially expensive barriers to entry.

Linking up with a processor shouldn’t be one of them.

We love partnering with that sort of motivated and enterprising company. And we’ve built our payment models specifically to help them (and big players too!) succeed. It’s a simple model: if our customers do well, we do well.

Rather than relying on huge set-up fees, Carta has a scalable approach to fees: time and materials for setup, and a per-use fee once the product is off the ground.

Not long ago, small scale, lightweight payment products wouldn’t have been possible because those set-up cost would have been prohibitive. In fact, many legacy processors still operate this way. Those older processors are a lot of work to customize, so getting set up could cost hundreds of thousands. There would be a significant set up fee, an account fee and an ongoing fee. A small company could invest everything up front.

Our platform is set up differently. It’s fast and easy to customize.

So we rely on long term partnerships—not big setup fees. It means we really have to believe in the companies we work with. It won’t cut it to charge a big fee up front and send you off to sink or swim.

Every product is a little bit different. One size doesn’t fit all, so we can create an economic model that is directly related to yours.

Let’s look at some scenarios:

  • a program manager thinking of switching to a new processor – making a switch can feel like a risk. You might wonder: if it ain’t completely broke, why fix it? When there’s no huge up front costs, it’s easy to test out an alternative.
  • a gift card program – because gift cards are used only once, profit isn’t tied to repeat usage. In this case, a fixed model might be a better option than a variable model.
  • a program manager that’s already invested in their own technology – we scale costs based on what we’re actually doing, rather charging for standard services you don’t need
  • a program manager with multiple products within a program – your program might include several products that all do roughly the same thing. If you offer a Euro currency card, and want to another country to the mix, you don’t get hit with another setup fee to do exactly what you’re already doing.

We find out how your program works and how you realize revenues and then we charge for the same things. If you’re getting a bill for something you don’t charge your customers for, how will you recoup it? It makes it easy for any customer to see how we’ll both be profitable.

No matter what your size, your processor shouldn’t be the thing that breaks you.