Recently in our new release of the Money Club app, we have come up with a new commission structure as per which the commission starts with 4% of the total club amount for a new user who joins a real club and wins in the first round just after the pilot club. In the second round, your commission will drop based on your transfer time in the first round. This means that your commission can drop as low as 2.8% of the pool amount in the second round itself.
How much commission do the traditional chit fund companies charge?
As per the Chit Fund Act 1982, chit fund companies can charge a maximum of 5% of the pool amount as commission from the subscribers. Almost all the chit fund companies (like Shriram Chits, Margadarsi Chits, etc.) charge flat 5% of the pool amount as commission.
How much commission do offline cashiers charge?
Offline cashiers usually do not charge any flat commission % but they pick (win) the pool amount in the first or the second round without bidding for it and this way they earn more than 5% of the pool amount. There is also a very high risk of the cashier running away with the group members’ money.
How is the Money Club commission structure BETTER than the other chit fund companies and offline cashiers commission structure?
As mentioned above, traditional chit fund companies charge flat 5% of the club (pool) amount as commission irrespective of the performance of the subscriber, offline cashiers earn heavy profit by winning in the first round without bidding.
Whereas the Money Club platform values the performance of it’s money clubbers and reduces the commission % to as low as 0.5% of the club (pool) amount.
This is even lower than the transaction costs paid by users across some other payment platforms out there.
What was the need to change the commission structure?
Today, the Money Club company on-boards the new users, verifies them and takes the default risk completely. Our vision is to make the Money Club platform a Chit Fund company which is completely driven by Artificial Intelligence. Our aim is to provide the maximum safety and security to each of our money clubbers’s hard-earned money. To make all this possible, we need to operate on a sustainable commission model. However, keeping our trusted Money Clubbers interest in mind, we have built our new commission structure which will values performance. Again this is unlike any other platform operating in the country.
We hope you will understand our intention and our reason to bring this change on the platform. We are all open to your valuable feedback which will surely help us take the benefits of this product in the hands of millions of users across the country.
Please feel free to write to us in case of any queries! We are always listening.
Happy Money Clubbing!
Best, The Money Club Team
Money Club Mobile App
The Money Club is a company founded by ex IIT, INSEAD and UCLA alums. We have developed a mobile app that will help you solve your problem