How Payment Disintermediation Can Substantially Boost Consumer Spending


This article is provided for information and education purposes only and is not intended as investment advice. Readers are encouraged to do their own research and consult a professional before making any investment decisions.



For many years, intermediaries have found a way to wedge themselves between consumers and merchants, profiting from both sides and making transactions below a certain dollar value all but impossible. Thanks to the internet, the world we know is changing very rapidly, and increased competitiveness in the payments sector is providing people with options that never existed before. The increased competition from small business and startups is creating the beginning of a fee-slashing snowball effect and putting more money in the pockets of consumers. And as consumers gain access to income that would otherwise be allocated to pay for financial services, businesses will immediately enjoy revenue increases and widening margins as their payment processing fees are all but eliminated overnight. With this extra money at their disposal, they can more effectively for expand the business, provide better products, and ensure that customers get even more value for their dollars.



-Total remittance payments worldwide tops a half trillion dollars, with an average transaction fee of 8.96% as stated by the World Bank

-The world’s largest transaction network, VisaNet, had a transaction volume of 6.3 trillion dollars, with a transaction cost of 1%


-Of the US households that use credit cards, the average balance is around $16,000, with 55% of these people falling into the 'revolving' credit trap, meaning they continuously carry an outstanding balance. According to, as of January 2015 these outstanding credit card balances make up the majority of the $884.8 billion outstanding revolving debt balance in the US.


Boosting the Velocity of Money

Velocity of money is increased when capital is freed up for people who have a lower disposable income to basic living expenses ratio. Roughly translated, this means the rate at which money is spent in the economy is much greater when it is in the hands of people who are forced to spend the money immediately on basic day to day survival. The wealthy tend to invest their money or spend it on lavish items that only benefit niche markets that are exclusively reserved for the wealthiest in our society, so a large portion of the money stays proximal their financial circle.

If all money that goes to intermediaries was spent by consumers only once per year, it would add trillions annually to global consumer spending. But we all know that figure will be exponentially higher because the money will be spent many times over. Credit card companies make most of their profits at the expense of their poorest customers, who become ensnared in an endless debt cycle. These people who are sometimes living day to day, would almost certainly spend that money immediately on basic necessities, or save some of it if they were wise. Instead of being able to save their money and earn compound interest, these people end up paying high rates of interest to the credit card company. The highest compensated employees at these companies typically park their money, earning interest or tying up wealth in long term investments, which they will not likely be forced to sell immediately due to any sort of financial duress. This capital hoarding substantially reduces velocity of money in the global economy.


Evolving Beyond Intermediaries

In the past few weeks DNotes has made major breakthroughs on the payment processing front. The first DNotes automated payment script has been soft launched and is ready for businesses to begin testing, which is a major stepping stone required for full deployment of the complete next gen payment network. This payment network, which is but a small fraction of the entire DNotes ecosystem, will continue to make transferring money from person to person much easier than with a traditional bank, wire transfer service, or payment processor. The fees are substantially lower as well - sometimes even zero. Under this next gen payment system, micropayments are entirely possible where they wouldn't have been with traditional intermediaries because of the perpetual expenses these intermediaries dump on businesses they are supposed to serve.

Instead of forcing businesses to pay massive fees, the customer is the only one who pays a fee. This fee is much lower than what consumers have come to expect when making payments. What today's intermediaries will never do is pay you interest, DNotes on the other hand offers all users an opportunity to earn compound interest. You don't even need to own a computer, thanks to their revolutionary Cryptocurrency Investment Savings Plans (CRISP), with automated interest payments integrated in the blockchain. DNotes is the only cryptocurrency to have implemented this feature; having demonstrated its functionality for several months now. DNotes users may also earn an additional 2% or more by staking and helping secure the network.




Author: Brandon Cheliak

Education Director for DNotes and co-founder of DNotesEDU

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