In November last year Mercedes gave FTX the boot and was wondering who they would replace them with. Would they dare have another Crypto firm or would they go back to mainstream?
Crypto firms made such a big splash in sport over the last 18 months everyone thought they were the new kids on the block. Funny how 12 months changes things as there were no crypto adverts in the Super Bowl this weekend. A Bear market along with FTX's demise would have halted any thoughts of advertising.
Toto Wolff is all about technology as he made his fortune in the dot.com era as he was wide awake. The interesting story about him is he was in the States at the time and hurried back to Austria so he could be apart of the dot.com wave when it hit Europe. He got involved on the ground level in many startups and sold one or two making him an absolute fortune. Some he is still involved with and are one of the reasons why Mercedes were so far ahead of everyone technologically. The point is Crypto would not scare him as he is a forward thinker and why I don't think he would be against another Crypto partnership.
Mercedes announced a payment processing company called Nuvei who are based in Canada having clients all over the world. How long will this last is my thinking as they are a middle man offering a service that could be eliminated within the next 5 years due to crypto. Payment processing companies have flourished over the last few years especially as the online sector has grown so rapidly making their payment processing systems a necessity.
These Gatekeepers are going to come under attack which I have mentioned before with companies like Stripe (top 3). These payment processing companies have grown so large so quickly due to the fees they charge which comes from you and I plus the companies that use their services.
Nuvei are not cheap and charge the following
$25 monthly Gateway fee.
40c per transaction including voids and returns.
$34.95 quarterly compliance fee.
$199 per year maintenance fee.
I am surmising this would be per system so a company could have more than one payment facility as in one per branch. This adds up over and above the charges of what the likes of Visa/Mastercard and the banks charge on their card transactions.
We know that companies like Amazon and Walmart and the rest are looking at doing away with payment processors taking back control. The smaller businesses will not be in the first wave as the big players have to make the first move. I know with my research in COTI that this is on the cards this year with one or two breaking away from the norm on their own with three others following as they have already signed the NDA agreements. Who they are is purely guesswork so a wait and see game is now required. Whoever they are they are global big companies who can justify taking control of their own payments using Crypto as part of the cost saving.
A sponsor is a sponsor however and one that has money to burn right now as this is where the big money is being made. I don't see much of a future long term so paying $30 million or more for a marketing tool like Formula One where you have access to the drivers and their business partners is a good move for both parties.
This will be the next industry to feel the heat from Crypto and payment processors are in the sights. This is going to happen and expect 2023 to be awake up call as even a company the size of Stripe is looking at bailing/selling as they can see the writing on the wall.