Replies to post #238557 on Wave Systems Corp. (fka WAVXQ)

[waveduke]

You have to remember, this place is barren. One drop of water keeps the village going for months. Only the tough survive in these parts. We drink sand to survive! :)

[dig space]

wd, yup

In many ways I was surprised by the "anticipate" statement because a) the rubber hitting the road is a long ways away and b) it would seem a definitive agreement would include the revenue split. This is entirely Bell-IDs business, their market, their customers, their infrastrucutre. Wave provides an enabling technology to allow a better margin on a subset of transactions - a pie that needs to be split three ways (Bell, Bank, Wave) and the discussion hinges on tenths of a mill point. Furthermore, as the product in some ways does not exist the parties are speaking towards a volume black box, and it is a model that depends entirely on volume. The negotiations it would seem to me would likely go back and forth a good deal. And, of course, it would presumably involve language to address liability in the event of failure. The notion is to recover the difference between card present and card not present as they are valued differently as a consequence of differences in observed (extant) fraud rates. What happens if the WaveEnabled transactions don't come in at the anticipated fraud rate? Who carries the bag on that? Does the reduced fraud rate need to be demonstrated before the improved mill rate is enjoyed? It strikes me as a very nitty gritty fine resolution actuarial kinda thing for which I could imagine the negotiations could easily derail when a party insets any variety of little pieces of language that could have significant downstream consequences.