Pundi X transaction revenue model explained
In keeping with our commitment to transparency, we’d like to explain our revenue model and impact on NPXS with regard to transactions that run on the XPOS.
100% of Pundi X’s revenue that is generated through transactions on the XPOS will be removed permanently from our NPXS token circulation. This means that if Pundi X makes $1 of revenue from a transaction, we will take $1 worth of NPXS out of circulation permanently. NPXS tokens taken out of circulation will never be able to re-enter the circulation in any way as they will no longer exist.
In this article we will look at how:
1. transaction fees are being calculated; and
2. the details of how NPXS are taken out of circulation.
Note: Revenue is the gross amount Pundi X receives and does not include other capital expenditures (CAPEX) or other operating costs.
Below are the transaction fees normally incurred in a transaction:
- Merchant is the owner or lessee of the XPOS device, eg: convenience store owner, retail XPOS owner, etc.
- Issuer is a payment method that works with XPOS, eg: XPASS, e-wallet cards, metro cards, mobile apps, cryptocurrency apps, etc.
- Switch is XPOS (Pundi X) as we connect payment end-to-end, hence the industry term “switch”.
Case study 1: a user buys $1,000 worth of crypto from a merchant in a store using Pundi XPASS card. The total charge a user has to pay is $1,010; $1,000 for the crypto and $10 for the service fees. Of the $10 received, $6.50 is paid to the shop merchant for rendering this service. $3.50 is paid to Pundi X for providing XPOS (switch) and XPASS (Issuer) service.
Case study 2: a user buys $1,000 worth of crypto from a merchant in a shop using an imaginary online crypto app called Coinbas. The total charge a user has to pay is $1,010; $1,000 for the crypto and $10 for the service fees. Of the $10 received, $6.50 is paid to the shop merchant for rendering this service. $0.50 is paid to Pundi X for providing XPOS (switch). $3 is paid to imaginary app Coinbas for providing the app (issuer).
Notes: * Transaction fee is 1%, and under special circumstances merchant might be able to increase the fee up to 2% with the explicit approval from Pundi X.
Transaction Fees setup
In line with our commitment, we will be taking out of circulation, the total NPXS involved in transaction fees to reduce the total supply of NPXS tokens.
What do we do with taking out NPXS?
If the transaction is made in Pundi X tokens, we will take the tokens immediately out of the total supply. If the transaction is made in other tokens or fiat, we will use the proceeds to buyback NPXS, after which we will permanently remove the NPXS tokens from circulation and ensure they can never re-enter circulation.
Token supply will be updated each quarter to reflect the tokens taken out of the supply, starting from Q4 2018.