NanoGPT - Why do we prefer payments in Nano?

NanoGPT recently added credit card payments. The majority of the world does not use Nano, and credit cards are the preferred payment method for most. To give more people access to LLMs and image models and to expand our reach we want to make it as easy as possible for people to deposit funds.

That said, credit cards come with many downsides for us as a merchant which is why we offer a 5% discount on prompts paid in Nano.

Downsides of credit card payments

1. Transaction costs

Credit cards come with high costs for merchants. Any cost we incur we need to charge for in some way. For accepting credit card payments via Stripe we are charged a base fee ($0.30) plus a variable fee (3%). On a $5 transaction that comes out to $0.45, an almost 10% charge.

We strive for maximum privacy and therefore prefer to not collect billing addresses. Stripe offers increased privacy for users and determines the applicable VAT for an additional 1% fee. Paying out to our bank account comes with a fee. Converting foreign currencies to EUR or USD means another fee and a sub-optimal exchange rate. Need an invoice? Another fee.

It all adds up to over 10% fees on a $5 deposit, even more on smaller deposits, and remains high even for higher amounts deposited. Good for Mastercard's bottom line, bad for all of us.

2. Chargebacks and waiting times

Credit cards allow people to chargeback and to dispute payments. We have no issue with that and understand that people sometimes want to do so. However, there is a lot of credit card fraud where people will, in our case, deposit funds, use the service, then dispute the payment or claim a chargeback which costs a lot of time and money for us.

For regular payments Stripe pays out to a bank account after 7-14 days. This is not a long period, but it is annoying when there are bills to pay. Instant payouts are available... for an additional fee.

Why we prefer Nano

1. Zero fees

Nano offers an extremely simple zero fee. It's $0, regardless of amount paid, regardless of the time of day. When we pay out to our own account it's again done at zero fees.

If we convert to USD or EUR there would be an additional charge of ~0.25% for doing so on an exchange, which means incredible cost savings compared to Stripe.

Because of this we can let people deposit as little as $0.01. We can even allow people to withdraw their funds at any time, because there are zero fees on that as well.

2. Instantly fully settled

Every Nano payment is instantly settled. Instantly settled in the sense that there can be no rollbacks or chargebacks, while anyone can (instantly!) withdraw funds that are unused.

Instantly settled also in the sense of instant payouts to our own accounts. Whereas Stripe takes 7-14 days, with Nano we have the money in our account in literally a second.

3. Value preservation

Fiat currencies like US Dollars and Euro are subject to debasement. We prefer to hold our money in a stronger store of value. Nano has a fixed supply and is decentralized, making it a form of money that can not be debased.

When we receive fiat payments we need to take additional steps to get to Nano. We have to withdraw from Stripe, send funds to an exchange and swap into Nano. This means extra effort and extra cost. Accepting Nano removes this additional step.

Conclusion

We are glad we can offer credit card payments since far from everyone has access to Nano. Given that Nano is much more attractive for us to accept and saves us time and money, we encourage people to use it rather than credit cards and offer a 5% discount when using Nano on our website.

To those that want to learn about Nano we would suggest reading an article on the basics of how it works. Alternatively we would suggest downloading a wallet like Natrium (Android here, iOS here) and getting some Nano from NanoDrop to try it out with. It's all free. If you'd like to get your hands on some Nano to use with us you can find exchanges here or find ways to earn small amounts of Nano here.

To merchants considering accepting Nano for payments NanoPay is an easy all-in-one solution.

We're personally enthusiastic about Nano and are always open to chat about it in our Discord server or via our support email.