Vember Capital’s affiliate solution offers e-merchants an incentive to encourage their customers to
pay with cryptocurrency instead of paying with traditional currency. This means that customers
in turn receive incentives, usually in the form of discounts on their purchases.
Clear advantages for e-merchants
E-merchants that sell services have historically been affected to a higher degree by fraud and chargebacks compared to those who sell products as it is easier to contest delivery and payment liability during purchase of a service. A usual consequence of this is often that the e-merchant bears the cost themselves as the process of proving delivery of the service is time-consuming and costly. When an e-merchant receives payment in cryptocurrency, the risk of fraud in the transaction disappears for the e-merchant.
Card issuers consider that a higher-than-normal risk of fraud exists in some sectors. As a consequence of this, card issuers often charge e-merchants in these sectors higher redemption fees and impose longer payment terms. When an e-merchant gets paid in cryptocurrency, these redemption charges disappear, which affects their profitability negatively. In addition, the transaction is also completed immediately, which means that the payment is immediately available for the e-merchant.
There are a number of advantages for e-merchants to make it possible for their customers to pay in cryptocurrency. However, what e-merchants lack is a sufficient number of customers that have cryptocurrency to pay with, so even if the advantages are obvious for e-merchants, the customer base is often absent at present. This is where Vember Capital comes into the picture. A customer who wants to purchase a service at an e-merchant who offers payment in cryptocurrency, is often offered an incentive to pay with cryptocurrency. E-merchants offer these incentives, for example discounts, better terms or other benefits, because there are several advantages for e-merchants to receive payment in cryptocurrency instead of with traditional payment methods such as cards or invoices. When a customer, on an e-merchant’s website, chooses to pay with cryptocurrency, the customer is linked to Vember Capital, which then sells cryptocurrency from its own inventory to the customer. Vember Capital does not offer a payment solution for e-merchants but the customer purchases the cryptocurrency directly from Vember Capital. Upon completed purchase, Vember Capital then delivers the cryptocurrency to the customer’s digital wallet. The customer can subsequently use the cryptocurrency to pay for the purchase of the service from the e-merchant.
Vember Capital markets its service to e-merchants in a time- and cost-efficient way through affiliate networks. An affiliate network consists of several companies (affiliates) in a network that markets and introduces Vember Capital’s solution to e-merchants. It is these affiliates which have the relationship with the e-merchants, Vember Capital sells cryptocurrency to the e-merchants’ customers. Vember Capital’s solution is completely independent of whichever affiliate that sends customers, the technology works universally. For the purpose of optimising its marketing efforts, Vember Capital works with Affiliate Network Managers that put together affiliate networks. Through these, a number of affiliate networks are attracted which in turn provide Vember Capital with access to a large number of e-merchants and their customers. Vember Capital has agreements with Affiliate Network Managers. When Vember Capital executes a transaction from a customer who came via an affiliate network, a commission is paid out to the affiliate network. This commission is very low compared to Vember Capital’s earnings, which is positive from a profitability perspective. Vember Capital does not pay any commission to the affiliate network before Vember Capital has received revenue. The advantages of affiliate marketing are that it is both time- and cost-efficient and that no major investment needs to be made in marketing campaigns with uncertain results, which also implies a low level of risk.
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