Fees! Fees! They’re Everywhere! They’re ripping my flesh off! Your firearms are useless against them!
Okay, so maybe Chris Farley wasn’t talking about fees being everywhere, but he easily could’ve been…
As a consumer, we’re frequently exposed to many different fees throughout our day to day interactions. These fees take various identities from transparent to hidden, large or small. Although, it’s common for technology to allow for new business opportunities and efficiencies that drive fees down over time. Join as we dive deep into past and current trends of fees in the finance industry, payment processing industry, and the sports betting industry.
Financial Industry
Let’s take a look at the evolution of fees in the financial industry over the past 40 years. For investments, consumers would originally invest in their retirement fund with a managed fund. These funds would discreetly hide fees that would deteriorate an individual’s investment return. Along came Jack Bogle, who created Vanguard and the index fund that consistently brought down the fees to invest. According to an SEC.gov study, fees for the median front-end sales load fell from 8.5% in 1979 to 4.75% in 1999. The consumer won as individuals could keep heftier returns in their pocket and meet their retirement goals earlier.
The financial industry continued to be ripe for innovation as Robinhood, the no-fee stock trading app, disrupted the financial industry. Prior to Robinhood, brokers were charging a commission fee to process online transactions on their platforms. The easy to use Robinhood interface and no transaction fee allowed for Robinhood to influence the entire industry and obtain over 13 million users by 2020.
Payment Processing
In addition to the financial industry, the payment processing industry has undergone significant evolution over the last few decades. High processing fees of 3%-5% for payments allowed for introduction of new innovative companies from Paypal, Venmo, and Square. These companies reduced the fees of payment processing while providing an easy and seamless experience for the end user. As we look forward, the payment industry continues to evolve and focus on low-fee structures with the maturation of blockchain technologies.
Sports Betting
As you look towards future trends, one can note that the current sports betting industry is ideal for innovation. As laws have changed, Sportsbooks are focusing on moving their infrastructure online. However, the Sportsbook model still has hidden fees via a hidden vig (or vigorish) in their events by providing non-pure odds that will consistently skim (4–10%, sometimes even as high as 20%) a portion of funds from bets placed. This practice is common in Sportsbooks and creates opportunities for new companies to innovate as technology allows for more efficient solutions.
The Future
BettorEdge, the first no-commission sports marketplace available across the US and designed with the bettor in mind. BettorEdge’s online platform allows for users to buy or sell wagers at their own agreed upon price (via the marketplace) with no-fee. With the true market as the central place of the platform, bettors are able to increase their winnings over time as no vig is taken by a middle intermediary. On top of the no-fee marketplace, users are able to enjoy the online community by tracking friend’s wagers or follow other sports bettors in the field. With no stake in who wins the bet, BettorEdge can provide bettors with key tools to help make better betting decisions.
With all these great features, gone are the days of paying a hefty vig, searching for the best price across many platforms, or betting in isolation while having multiple text threads about it later. Get the webapp today at app.BettorEdge.com or checkout their site at BettorEdge.com.
