Estimated monthly revenue increase for your SMB portfolio at the end of year 1
Note: Only factor in account holders who rely on your digital banking channels
Note: Only factor in account holders who rely on your digital banking channels
Step 1
Business | Retail | |
---|---|---|
10 | 10 | Average number of monthly transactions These numbers are derived from historical company data. |
$650 | $350 | Average transaction amount These numbers are derived from historical company data. |
2.89% | 2.89% | Transaction processing rate This is the current rate for processing card-based transactions. For our purposes here, we’ll calculate all transactions as card transactions. |
70% | 70% | Estimated transaction processing cost Transaction processing costs are based upon system wide estimates of 70%. |
15% | 15% | FI revenue share percentage This is the percentage of revenue shared with your FI. |
$8.45 | $4.55 | Monthly Transactional Revenue |
How did we get this answer? See the detailed analysis
The formula to calculate monthly transaction processing revenue per active SMB is built upon these four calculations (steps 1-4 below):
1. Total monthly processing volume
First, let’s determine the total dollar amount processed per month by an active SMB. Below are the system-wide averages, per SMB, for both number of transactions processed per month, and average dollar value per transaction.
2. Gross monthly transaction processing revenue to share
Next, we multiply the monthly processing volume times the processing/interchange rate. This determines the gross amount of transaction processing revenue to be shared. For the purposes of this guide, we’ll calculate all transactions as card transactions with a rate of 2.89%.
3. Net monthly transaction processing revenue to share
Next, you will take the gross transaction processing revenue and subtract the estimated transaction processing costs. Transaction processing costs are based upon system-wide estimates of 70%.
4. Net monthly transaction processing revenue for the FI
Finally, we multiply the net transaction revenue times the FI revenue share percentage.
Step 2
Business | Retail | |
---|---|---|
Total number of online accounts entered at the beginning These numbers are based on the information you entered at the very beginning. | ||
100% | 15% | Accounts that are eligible for Autobooks The 15% is based on industry-wide estimates of retail customers exhibiting micro-business behavior. |
5% | 5% | Estimated Autobooks adoption at the end of 12 months We assume a 5% adoption rate at the end of year 1. |
55% | 55% | Payment activation rate These percentages are derived from historical company data. |
Active Number of SMBs at the FI |
How did we get this answer? See the detailed analysis
The formula to calculate monthly transaction processing revenue per active SMB is built upon these four calculations (steps 1-4 below):
1. Total monthly processing volume
First, let’s determine the total dollar amount processed per month by an active SMB. Below are the system-wide averages, per SMB, for both number of transactions processed per month, and average dollar value per transaction.
2. Gross monthly transaction processing revenue to share
Next, we multiply the monthly processing volume times the processing/interchange rate. This determines the gross amount of transaction processing revenue to be shared. For the purposes of this guide, we’ll calculate all transactions as card transactions with a rate of 2.89%.
3. Net monthly transaction processing revenue to share
Next, you will take the gross transaction processing revenue and subtract the estimated transaction processing costs. Transaction processing costs are based upon system-wide estimates of 70%.
4. Net monthly transaction processing revenue for the FI
Finally, we multiply the net transaction revenue times the FI revenue share percentage.
Step 3
Business | Retail | |
---|---|---|
Active number of SMBs at the FI These numbers are carried over from the previous section. | ||
15% | 15% | Subscription rate These percentages are estimates derived from historical company data. |
$3.33 | $3.33 | FI revenue share Your FI will receive 33% of the $9.99 subscription fee (about $3.33). |
Monthly Subscription Revenue | ||
Total Monthly Subscription Revenue |
How did we get this answer? See the detailed analysis
The formula to calculate monthly transaction processing revenue per active SMB is built upon these four calculations (steps 1-4 below):
1. Total monthly processing volume
First, let’s determine the total dollar amount processed per month by an active SMB. Below are the system-wide averages, per SMB, for both number of transactions processed per month, and average dollar value per transaction.
2. Gross monthly transaction processing revenue to share
Next, we multiply the monthly processing volume times the processing/interchange rate. This determines the gross amount of transaction processing revenue to be shared. For the purposes of this guide, we’ll calculate all transactions as card transactions with a rate of 2.89%.
3. Net monthly transaction processing revenue to share
Next, you will take the gross transaction processing revenue and subtract the estimated transaction processing costs. Transaction processing costs are based upon system-wide estimates of 70%.
4. Net monthly transaction processing revenue for the FI
Finally, we multiply the net transaction revenue times the FI revenue share percentage.
Monthly Transactinal Revenue
Active Number of SMBs at the FI
FI Monthly Transactional Revnue
Monthly Transactinal Revenue
Active Number of SMBs at the FI
FI Monthly Transactional Revnue
Business Accounts
Retail Accounts
Total Monthly Subscription Revenue
By establishing the estimates in the previous steps, we can now calculate the monthly revenue at the end of year 1.
Monthly Transactinal Revenue
Active Number of SMBs at the FI
FI Monthly Transactional Revnue
Monthly Transactinal Revenue
Active Number of SMBs at the FI
FI Monthly Transactional Revnue
Add totals to the monthly subscription revenue
FI Monthly Transactional Revnue Business
FI Monthly Transactional Revnue Retail
Total Monthly Subscription Revenue
Total Monthly Revenue of Active SMBs - End of Year 1