[taler-docs] branch master updated: Refined text on fee schedule, now ready to review.

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     new 4949534  Refined text on fee schedule, now ready to review.
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commit 4949534b914f41c3b7165bc4eed66b2a169ea282
Author: Stefan Kügel <skuegel@web.de>
AuthorDate: Fri Jan 8 19:20:09 2021 +0100

    Refined text on fee schedule, now ready to review.
---
 design-documents/012-fee-schedule-metrics.rst | 50 +++++++++++++++++----------
 1 file changed, 31 insertions(+), 19 deletions(-)

diff --git a/design-documents/012-fee-schedule-metrics.rst 
b/design-documents/012-fee-schedule-metrics.rst
index 256b697..efcebd7 100644
--- a/design-documents/012-fee-schedule-metrics.rst
+++ b/design-documents/012-fee-schedule-metrics.rst
@@ -1,5 +1,5 @@
 Fees schedule and fee metrics
-######################################
+#############################
 
 .. warning::
 
@@ -10,8 +10,8 @@ Summary
 
 This chapter discusses considerations for fees from different points of view 
(Exchange operators, customer/users, and sellers/merchants.
 
-Introduction
-============
+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 transaction to 
bank accounts) and expenses of constant height 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 t [...]
 
@@ -19,17 +19,19 @@ Any coin that has been generated or that is used 
(deposited) or refreshed can be
 
 Fee types and their underlying metrics are not only due to cover real costs in 
the long run, but also to reward users for their economic behaviour, to prevent 
misuse, and to allow Exchange operators to gain certain income and most 
probably profits. Exchange operators are thus determining the combination of 
fee types and the height of each fee for every denomination of coins. Any 
chosen denomination (constant nominal value of coins preset by the operator by 
means of the Denomination key)  [...]
 
+Proposed Solution
+=================
 
-1 Fee schedule
+Fee schedule
 ==============
 
 Whereas the Taler protocol determines types of fees, Exchange operators 
determine the upper and lower limits of fees using parameters. Once they have 
set the fee height per denomination, the algorithm of the Taler payment system 
will allocate costs automatically to every generated coin respectively to a 
wired amount.
 
 The fee structure and its underlying metrics are also bound to rules and 
expectations of financial regulatory authorities like the German Federal 
Financial Supervisory Authority (Bundesanstalt für 
Finanzdienstleistungsaufsicht BaFin). Changes to the fee structure are 
therefore eligible only when they are in accordance with national or 
international laws and directives.
 
-Fees chosen by Exchange operators have to be explained to the users by means 
of comprehensive Terms and conditions of services that rule out the different 
and heights of fees and how they are calculated. Costs for wired amounts within 
the banking system (IBAN transfers to the Exchange's escrow account for the 
withdrawal transaction) have to be covered by users, so additionally Terms and 
conditions of their banks may be effective, too. These Terms of banking 
services are not part of the T [...]
+Fees chosen by Exchange operators have to be explained to the users by means 
of comprehensive Terms and conditions of services that rule out the different 
and heights of fees and how they are calculated. Costs for wired amounts within 
the banking system (IBAN transfers to the Exchange's escrow account for the 
withdrawal transaction; IBAN: International Banking Account Number) have to be 
covered by users, so additionally Terms and conditions of their banks may be 
effective, too. These Ter [...]
 
-1.1 Obligations of Exchange operators
+1. 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 height of fees. If a fee type is set to a 
value of 0, this fee type will not contribute to the operator's income from 
fees.
@@ -48,7 +50,7 @@ Terms and conditions of every Exchange must also clearly 
indicate to the user th
 
 A private bank that hosts an Exchange and normally charges its customers for 
IBAN transfers has the option of waiving the applying fees for their customers 
when they are withdrawing from their own checking accounts into Taler wallets.
 
-1.2 Buyer's obligations
+2. Buyer's obligations
 -----------------------
 
 Prior to making a first withdrawal from an Exchange users are required to read 
and confirm the Terms and conditions of the relevant Exchange. This step is 
mandatory when changes to Terms and conditions take place. Users accept Terms 
and conditions by confirming them in the mobile application or on the web. 
Terms and conditions also require users to accept possible losses of funds in 
wallets through 'Refresh' fees, which can be eventually charged by Exchange 
operators.
@@ -59,7 +61,7 @@ In accordance with the Terms and conditions, the users agree 
not to make any cla
 
 Furthermore, according to the Terms and conditions, users must accept that the 
IBAN transfer from the users' personal checking account to the Exchange's 
escrow account may incur costs depending on the contract with their banks. 
These costs are not related to the Taler payment system and cannot be 
influenced by it.
 
-1.3 Obligations of merchants/sellers
+3. Obligations of merchants/sellers
 ------------------------------------
 
 Normally, a plurality of buyers' spending transactions is summed up to one 
aggregated amount of revenue and wired to the receiving checking account of the 
merchant. Merchants can set the frequency by which these aggregated amounts are 
wired. Every wire transfer imposes costs on the Exchange operator collected by 
the operator's bank for having the amount wired. Therefore, the Exchange 
operator will tend to charge the 'Wire fee' to the sellers for this transaction 
type, as the sellers are  [...]
@@ -68,7 +70,7 @@ During the withdrawal process, the wallet shows to the buyer 
the complete fee sc
 
 Given the case that sellers enter incorrect account data for their own 
checking account, they are solely liable for any resulting damage and not the 
Exchange operator. Sellers bear the risk of a loss of value or even a total 
loss of their revenue if they enter a wrong IBAN for the transfer of their 
revenue, although syntactically correct. Similarly, the sellers alone bear 
charges due to an incorrect receiving account number or other posting errors 
that they cause and for which manual rou [...]
 
-1.4 Technical framework conditions for the collection of fees
+4. Technical framework conditions for the collection of fees
 -------------------------------------------------------------
 
 Fees are charged per coin or per wire transfer. The number of coins at 
withdrawal usually increases logarithmically with the amount represented. Fees 
can be applied to both flow quantities (e.g. coins moved at withdrawal and 
deposit transactions) and static quantities (e.g. coins stored in wallets). The 
fees on coins may differ depending on the time of issuance of a coin and 
depending on the value of a coin. They are fixed for each coin with its time of 
issuance, so they cannot be change [...]
@@ -78,7 +80,7 @@ During the entire period of validity, all Denomination keys 
and the selected fee
 The refresh transaction is automatically triggered by the wallet software 3 
months before the end of the validity of a coin. Especially if Exchange 
operators charge refresh fees, they have to point out this automatic feature to 
the users in their Terms and conditions.
 
 
-2 Fee types
+Fee types
 ===========
 
 The Taler protocol offers the following fee types:
@@ -91,18 +93,18 @@ The Taler protocol offers the following fee types:
     c. Abort of transactions due to network failure
     d. Refund
 4. 'Refund': For refunds or in case of contract cancellation by seller, per 
coin
-5. 'Wire fee': For aggregated amounts wired by the Exchange to the merchant's 
checking account, per wired transfer
-6. 'Closing': In case that a withdrawal process could not be accomplished (the 
users' wallet did not withdraw the value from the reserve), per wired transfer 
from the Exchange's escrow account to the account of origin
+5. 'Wire fee': For aggregated amounts wired by the Exchange to the merchant's 
checking account, per wire transfer
+6. 'Closing': In case that a withdrawal process could not be accomplished (the 
users' wallet did not withdraw the value from the reserve), per wire transfer 
from the Exchange's escrow account to the account of origin
 
 
-2.1 Effects of fee types on Exchange operators, buyers and sellers
+Effects of fee types on Exchange operators, buyers and sellers
 ------------------------------------------------------------------
 
 Each of the above fee types is now considered viewed from the perspective of 
the buyer, the exchange operator, and the seller:
 
 * 'Withdrawal' from the buyer's point of view:
 
-Anyone who wants to load Taler wallets with coins must initiate a wired 
transfer from the own checking account to the Exchange operator's escrow 
account to let the Exchange fund a reserve which can be subsequently withdrawn 
by the wallet. Costs for the wired transfer may be incurred according to the 
user's contract with the bank. In addition to these potentially incurred costs, 
the withdrawal fee could be charged for each coin withdrawn into the wallet. 
Even though many bank customers ar [...]
+Anyone who wants to load Taler wallets with coins must initiate a wire 
transfer from the own checking account to the Exchange operator's escrow 
account to let the Exchange fund a reserve which can be subsequently withdrawn 
by the wallet. Costs for the wire transfer may be incurred according to the 
user's contract with the bank. In addition to these potentially incurred costs, 
the withdrawal fee could be charged for each coin withdrawn into the wallet. 
Even though many bank customers are  [...]
 
 * 'Withdrawal' from the Exchange operator's point of view:
 
@@ -158,24 +160,34 @@ As of today's implementation, in the event of a 
withdrawal from the purchase agr
 
 * 'Wire fee' from the buyer's point of view:
 
-This fee only directly affects buyers in the following case: the protocol 
allows sellers to partially pass on the cost of the fee to buyers if the 
exchange operator that signed buyers' coins set the wire fee fee above the 
value that each seller can (but is not required to) enter in its merchant 
backend with the max_wire_fee variable. The cost of the wire fee is factored 
into the sellers' prices. Sellers could pass on the relative cost benefits of 
the Taler payment system to their custome [...]
+This fee is to be paid by the sellers (i.e. merchants or generally all 
recipients of coins). The wire fee directly affects buyers only in the 
following case: The protocol allows sellers to partially pass on the cost of 
the wire fee to buyers if the Exchange operator that signed buyers' coins sets 
the wire fee above the value that each seller can define in the merchant 
backend via max_wire_fee. It is no secret, though, that all the costs and the 
fees are included in retail price tags. At  [...]
 
 * 'Wire fee' from the Exchange operator's point of view:
 
-The wire fee passes on the cost of SEPA postings from the escrow account to 
the seller accounts - from the exchange operator to the sellers. Buyers are 
only shown the wire fee if the seller does not pay it. Otherwise, customers 
don't realize what fee is being withheld from their spent coins at the 
exchange. For exchange operators, opting out of the wire fee would be 
tantamount to giving sellers carte blanche to trigger a collective booking of 
their sales revenue as often as possible. If, [...]
+Exchange operators may charge wire fees in order to cover their expenses for 
wiring the value of coins to the beneficiaries. The wire fee passes on the cost 
of wire transfers from the Exchange's escrow account to the receiving banking 
accounts, and for this usually banks charge handling fees. Buyers are only 
shown the wire fee if the seller does not bear them to the full extent. For 
Exchange operators, opting out of the wire fee would be tantamount to giving 
sellers carte blanche to trig [...]
 
 * 'Wire fee' from the seller's point of view:
 
-Sellers want to recognize their sales as quickly and often as possible. Timely 
revenue recognition improves their liquidity and generates interest income if 
sales revenues are received earlier than payments to suppliers. They are 
therefore forced to weigh whether they would rather bear higher absolute costs 
due to the wire fee or forego liquidity. For some vendors, on the other hand, 
the volume of bookings determines the frequency of the collective booking so as 
not to overload the accou [...]
+Sellers want to register their sales as quickly and often as possible. Timely 
revenue recognition improves their liquidity and generates interest income if 
sales revenues are received earlier than payments to suppliers. They are 
therefore forced to argue whether they would rather bear higher absolute costs 
due to the wire fee or forego liquidity. For some merchants, on the other hand, 
the volume of purchases determines the frequency of the aggregated wire 
transfer so as not to overload t [...]
 
 * 'Closing' from the buyer's point of view:
 
-The closing charge is triggered by users of the payment system if, after a 
successful SEPA transfer to an Exchange's escrow account, they do not have the 
reserve withdrawn to their personal wallet because they do not have the wallet 
connected to the Taler exchange within 14 days. Since they are the originators 
and incur costs to the Exchange for the re-transfer, they also have to pay the 
closing fee. This is done by remitting the original remitted top-up amount 
minus the cost of SEPA tra [...]
+The closing charge is triggered by users of the payment system if, after a 
successful wire transfer to an Exchange's escrow account, they do not have the 
reserve withdraw to their personal wallet. This could be the case when for 
example the wallet did not connect to the Taler exchange within 14 days. Costs 
incur to the Exchange for the wire transfer back to the originating account. 
This is done by remitting the original amount minus the cost of wire transfers 
and possibly manual routing. [...]
 
 * 'Closing' from the Exchange operator's point of view:
 
-Costs for the closing of a reserve are incurred by the Exchange operator due 
to irregular user behavior. However, it must not be left to bear these costs, 
but must charge them to the user who caused them. The closing fee is 
indispensable for exchange operators in order to prevent abuse through cost 
driving. Charging and retaining the fee always works smoothly because the 
exchange's escrow account has been booked with a bank transfer - and not with a 
SEPA direct debit, which could be canc [...]
+Costs for the closing of a reserve are incurred by the Exchange operator due 
to irregular user behavior. However, Exchange operators may charge a fee for 
covering these costs to the user who caused them. The closing fee is 
indispensable for Exchange operators in order to prevent abuse through cost 
driving by malicious parties. Charging the fee by retaining it always works 
smoothly because the Exchange's escrow account is already in possession of 
users' funds through their wire transfers.
 
 * 'Closing' from the seller's point of view:
 
 The closing transaction does not affect sellers in any way. 
+
+
+Alternatives
+============
+
+Drawbacks
+=========
+
+Discussion / Q&A
+================

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