This white paper explores global cross-border payment challenges, a proposed
technology solution with transformative potential, and the business and technical
perspectives of the proposed solution. Highlights are as follow:
Global cross-borders e-commerce has tremendous potential. In 2015 alone, total Gross
Merchandise Value (GMV) for cross-border e-commerce stands at USD 300 billion, with
a growth rate of about 25% per annum. This is expected to continue annually till 2020.
By 2020, the global market for cross-border e-commerce will account for about USD
900 billion, a 22% share of the entire global e-commerce market.
However, three significant problems continue to plague the ecosystem.
The existing financial infrastructure is a closed system, where transaction costs are
high, and money moves slowly across countries, mostly due to political and geographic
boundaries set in place by human factors. Many are left unserved and unbanked,
especially in emerging markets.
High processing fees and processing time – Cross-border interchange and
transaction fees are higher than domestic fees, often resulting in an additional 3-5% on
top of the total purchase amount. This is due to the increased number of intermediaries
involved: payment gateways, correspondent banks, currency exchanges, financial
messaging networks who take a cut of the transactions. The additional risk and
compliance costs, technology infrastructure costs also contribute to higher processing
fees and time for both the consumer and merchant.
Trust and reputation problem – Building trust is difficult, and trust is centrally governed
by big marketplaces now. There is an inability to transfer trust from one centralized
service to another, and thus a need to establish relationship with each merchant
separately. Moreover, a merchant or consumer’s history is not properly recorded, so
there is no ability to punish fraudulent buyers or merchants. Likewise, settling claims or
chargeback disputes is usually highly contentious without trustworthy records.
Lack of access to credit – Globally, over 2 billion people have no access to banking
services, especially credit. In Southeast Asia itself, only 27% of the 600 million residents
have a bank account — leaving essentially 438 million people unbanked. Without a
proper bank account, it is almost impossible to borrow, save or invest money through
traditional financial institutions like national banks. As a result, most of the unbanked
turn to alternative financial institutions like pawnshops or loan sharks, where annual
interest rates can be as unreasonable as 100% per year.
Rate3 is a universal blockchain-based token within a wider ecosystem connecting
shoppers, merchants and other intermediaries.
Single Token Payment Solution: Cross-border payments within the ecosystem can be
completed with only one step and a one-time fee, making them up to five times cheaper
and a thousand times faster, compared to current payment processes. For consumers,
they can convert fiat currency to Rate3 tokens easily and use the tokens to pay for
cross-border purchases in a transparent fashion. For merchants, a simple integration
with the Rate3 payment gateway allows them to accept Rate3 tokens and convert them
to local fiat currencies of their choice easily.
Transaction and Credit Scoring System: The blockchain will record information
captured in all transactions including but not limited to: time required to make the
transaction, wallet addresses, warranty conditions, delivery time, reviews, etc. Apart
from helping both consumers and merchants solve claims or fraud, the smart contract
will automatically change the trust level for each of the parties involved.
Additionally, by tapping on the consumers’ transaction history and other identity data,
Rate can issue a credible credit score to these consumers and offer them affordable
credit through partnerships with other lending institutions.
Incentive System for All Participants: The value of any ecosystem lies in the twosided network effects. With more consumers in the ecosystem, merchants are more attracted to join the Rate3 network. Likewise, with more merchants, there are better
incentives for consumers to join. With Rate3 tokens, cash-back incentives can be easily
programmed through smart contracts to retain consumers. For merchants, they can
create incentives for consumers easily too. Moreover, this can all be applied and
facilitated instantaneously through the Rate3 network.
Rate3 is the most suitable to do this, given our existing products, users and networks.
Founded in 2016, Rate is a fintech startup focused on cross-border e-commerce
transactions. Our flagship product is RateX, a browser extension which enables easy
payments with exchange rates more favorable than those offered by PayPal, credit card
companies or banks. RateX aims to eliminate hidden transaction fees and unfavorable
exchange rates incurred by consumers when they purchase overseas products.
Additionally, RateX aggregates coupon codes from various merchants and allows users
to apply all coupon codes in a single click during checkout.
Apart from RateX, Rate has a newer product: RateS, a mobile app with the features of
the RateX extension but also an additional element of deal discovery.
The founding team of Rate comprises of Mr. Goh Jian Kai (Jake), the Chief Executive
Officer (CEO), Mr. Davis Gay and Mr. Lim Jing Rong, the Chief Technology Officers
(CTO). Including the three founders, Rate currently has eighteen employees and this
number will increase as the firm continues to grow after successfully closing its preseries A round of financing.
Rate currently has partnerships with globally recognized e-commerce platforms such as
Amazon, Taobao, and Hotels.com. Our key philosophy is to empower consumers with
the best and cheapest shopping experience, so both products are entirely free for
consumers. Instead, Rate earns affiliate fees from merchants by helping them increase
Given Rate’s existing operational experience in the intersection between payment and
cross-borders e-commerce, the Rate3 token is the most suitable one to power the future
of the global e-commerce ecosystem.
Staying true to our original vision, Rate3’s business model will not charge any
transaction fees from merchant and consumers.
Our three primary revenue streams are: digital prepaid card fees, affiliate marketing
fees and credit loan interest. More details will be elaborated in the subsequent sections.
Token sale details are as follow:
Token and token ecosystem: The exchange ratio is 1 ETH : 8,000 RTE. There is a
soft cap of 20,000 ETH and hard cap of 50,000 ETH.