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authorStefan Kügel <skuegel@web.de>2021-01-17 12:07:20 +0100
committerStefan Kügel <skuegel@web.de>2021-01-17 12:07:20 +0100
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Ended with editing the sub chapter 'Fee level in case of misuse', minor edits of terms to use
-rw-r--r--design-documents/012-fee-schedule-metrics.rst12
1 files changed, 6 insertions, 6 deletions
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+++ b/design-documents/012-fee-schedule-metrics.rst
@@ -13,7 +13,7 @@ This chapter discusses considerations for fees from different points of view (Ex
Motivation
==========
-Fees are necessary for covering costs that Exchange operators bear for offering their services established in-house or outsourced in a data center: Variable costs (e.g. electricity and wire fees for every wired transfer to bank accounts) and fixed-cost expenditures for hardware, company assets, marketing and staff, and so forth. They will allocate these costs to customers. The Taler protocol therefore offers different types of fees for each type of transaction that may appear in the transaction cycle. There are six fee types available for selection by the Exchange operator, each with a specific value within the limits given by the protocol. The protocol itself is subject to the legal framework established by (supra-)national regulatory authorities.
+Fees are necessary for covering costs that Exchange operators bear for offering their services established in-house or outsourced in a data center: Variable costs (e.g. electricity and wire fees for every wired transfer to bank accounts) and fixed-cost expenditures for hardware, company assets, marketing and staff, and so forth. They will allocate these costs to users. The Taler protocol therefore offers different types of fees for each type of transaction that may appear in the transaction cycle. There are six fee types available for selection by the Exchange operator, each with a specific value within the limits given by the protocol. The protocol itself is subject to the legal framework established by (supra-)national regulatory authorities.
Any coin that has been generated or that is used (deposited) or refreshed can be charged with an applicable fee type. In addition to this, every wired amount of money can be charged with a wire fee. The six fee types are named as **Withdrawal**, **Deposit**, **Refresh**, **Refund**, **Wire fee** and **Closing**. The fee type 'Closing' is used for allocating costs that arise from an uncompleted withdrawal transaction when an amount of fiat money has to be wired back from the Exchange's escrow account to the bank account of origin.
@@ -46,7 +46,7 @@ Obligations of Exchange operators
Exchange operators have to adhere to the fee schedule. Otherwise they can lose their interface access, have their certification revoked and, moreover, even become liable for damages. For each transaction type there is one specific fee type. Exchange operators set the fee amount. If a fee type is set to a value of 0, this fee type will not contribute to the operator's income from fees.
-Two fee types ('Wire fee', 'Closing') and the 'Recoup' protocol will cause costs for Exchange operators due to wire transfers to accounts wired by banks. Therefore, operators must find suitable ways to have these costs covered by customers.
+Two fee types ('Wire fee', 'Closing') and the 'Recoup' protocol will cause costs for Exchange operators due to wire transfers to accounts wired by banks. Therefore, operators must find suitable ways to have these costs covered by users.
The 'Recoup' protocol does not allow Exchange operators to set any fee amount, because reimbursing funds from an Exchange that is about to cease its activity must always be at zero cost for the user. Wiring fees in the case of 'Recoup' have to be entirely covered by Exchange operators instead.
@@ -109,11 +109,11 @@ While withdrawal fees do not burden sellers, withdrawal fees are imposing a thre
* **Deposit** from the buyer's point of view:
-Customers give a merchant the right to deposit coins in return for merchandise, and sellers trigger the deposit request. It is always the seller who has to bear the deposit fee per coin - but only up to a maximum value determined by the seller (using the variable ``default_max_deposit_fee``). The remainder of the deposit fee exceeding this maximum value has to be paid by the respective buyer. Deposit fees could theoretically be used to distribute all costs that Exchange operators have to bear. This would mean that all costs will be allocated to all coins deposited for buying goods and services. Usually, buyers can easily understand that a fee is charged on deposited coins. This is why 'Deposit' should be taken into consideration as an important and easy to propagate fee, not only from a buyers' perspective, but also from the operators' point of view.
+Customers give a merchant the right to deposit coins in return for merchandise, and sellers trigger the deposit request. It is always the seller who has to bear the deposit fee per coin - but only up to a maximum value determined by the seller (using the variable ``default_max_deposit_fee``). The remainder of the deposit fee exceeding this maximum value has to be paid by the respective buyer. Deposit fees could theoretically be used to distribute all costs that Exchange operators have to bear. This would mean that all costs will be allocated to all coins deposited for buying goods and services. Usually, buyers can easily understand that a fee is charged on deposited coins. This is why 'Deposit' should be taken into consideration as an important and easy to propagate fee, not only from the buyers' perspective, but also from the operators' point of view.
* **Deposit** from the Exchange operator's point of view:
-During deposit, the Exchange logic compares the public key of each coin with the keys stored in an array in the Exchange's Postgres database and examines each coin to determine whether it is redeemed for payment for the first time. This process consumes little energy and adds no additional cost. For Exchange operators, this marginally small cost factor can only become significant when there is a very high amount of deposit transactions to encounter (e.g. at large web-shops). Deposit fees, above all, represent the most important source of income for the Exchange operator and can easily be collected over all coins used.
+During deposit transactions, the Exchange logic compares the public key of each coin with the keys stored in an array in the exchange's Postgres database and examines each coin to determine whether it is redeemed for payment for the first time. This process consumes little energy and adds no additional cost. For Exchange operators, this marginally small cost factor can only become significant when there is a very high amount of deposit transactions to encounter (e.g. at large web-shops). Deposit fees, above all, represent the most important source of income for the Exchange operator and can easily be collected over all coins used.
* **Deposit** from the seller's point of view:
@@ -144,7 +144,7 @@ In contrast to the 'Refresh' fee type, the sellers -- and not the buyers -- trig
* **Refund** from the Exchange operator's point of view:
-Exchange operators cannot suppress refund postings because they must allow sellers to discount and cancel purchase contracts. A partial refund only partially relieves buyers of their deposit fees. Over time, customers are more likely to avoid such sellers who often have to discount after a contract is signed. Sellers who repeatedly trigger complete refunds, while exempting buyers' coins already deposited with the exchange from deposit fees, burden them with 'Refresh' fees. Should an Exchange operator then waive the 'Refresh' fee, it would incur costs. To avoid this, the Exchange operator must introduce or increase 'Refresh' fees, thereby charging all of its customers more by applying the 'Refresh' fee. From the point of view of the Exchange operator, the costs of both the partial and the complete refunds should have to be borne by the sellers, though, so that sellers should feel an incentive to avoid discounting or contract cancellation as far as possible, to fulfill the agreements on goods and services in accordance with the purchase contracts, and likewise to encourage their buyers to trigger returns and contract withdrawals less frequently (with all the economic and ecological effects that this entails, e.g. through frequent arbitrary returns of goods, the delivery and shipping costs, parcel handling and ecological damage that comes along with this).
+Exchange operators cannot suppress refund postings because they must allow sellers to discount and cancel purchase contracts. A partial refund only partially relieves buyers of their deposit fees. Over time, customers are more likely to avoid such sellers who often have to discount after a contract is signed. Sellers who repeatedly trigger complete refunds, while exempting buyers' coins already deposited with the exchange from deposit fees, burden them with 'Refresh' fees. Should an Exchange operator then waive the 'Refresh' fee, it would incur costs. To avoid this, the Exchange operator must introduce or increase 'Refresh' fees, thereby charging all of its users more by applying the 'Refresh' fee. From the point of view of the Exchange operator, the costs of both the partial and the complete refunds should have to be borne by the sellers, so that sellers should feel an incentive to avoid discounting or contract cancellation as far as possible, to fulfill the agreements on goods and services in accordance with the purchase contracts, and likewise to encourage their buyers to minimize merchandise returns and contract withdrawals (with all the economic and ecological effects that this entails, e.g. through frequent arbitrary returns of goods, the delivery and shipping costs, parcel handling and ecological damage that comes along with this).
* **Refund** from the seller's point of view:
@@ -193,7 +193,7 @@ Exchange operators must in some cases be able to take action by using different
* Abuse due to ``refund transactions`` occurs when sellers trigger the refund transaction arbitrarily too often. This can be limited by introducing or increasing the fee type **Refund**. As a consequence, the Exchange operator charges sellers for every refund they grant for coins that were signed by the exchange.
-* Abuse due to ``wire transfers`` will only affect an Exchange operator when sellers increase the frequency of aggregated wire transfers from his exchange to their banking accounts. This will the case for extremely often actuated wire transfers. A good reason for this may be a seller's urgent need for liquidity from sales revenues. Some merchants might also generate profits from interest rates, if they receive sales revenues some time before they have to pay for their merchandise already sold. Another case might be the necessity of immediate receipt of value from coins spent by a donor to a recipient. In any of these cases, IBAN wire transfers can be costly. As a matter of fact, it is therefore recommendable for every Exchange operator to charge these costs to sellers or recipients by applying the **Wire fee**.
+* Abuse due to ``wire transfers`` will only affect an Exchange operator when sellers increase the frequency of aggregated wire transfers from his exchange to their banking accounts. A reason for frequently actuated wire transfers may be a seller's urgent need for immediate liquidity from sales revenues. Some merchants might also want to generate profit from interest rates for their sales revenues before they pay for their merchandise already sold. In any of these cases, IBAN wire transfers can be costly. As a matter of fact, it is therefore recommendable for every Exchange operator to charge these costs to sellers or recipients by applying the **Wire fee**.
* Abuse due to ``closing transactions`` and the accompanying wire transfer of remittances back to the originating accounts burdens the Exchange operator with costs for wire transfers; to prevent this, the Exchange operator can introduce or increase the fee type **Closing**.