No charge to open an account—a small annual charge on the contents of your piggy-bank—no commission to transfer your gold to someone else—and a very low commission when someone else transfers his gold to you, though you’ll need a Ph.D. in mathematics to figure out what it is—all in all, it’s as “good as gold”
Account Maintenance Charge
It costs you nothing to open an e-gold account.
It costs you nothing to maintain an e-gold account if you have no funds in it. If you leave some gold in your account, then you’ll be charged at a rate of 1% per annum (the charge, in gold, is deducted monthly, and is calculated on the average daily balance of the gold in your account).
It costs you nothing to transfer some of your e-gold from your e-gold account to someone else’s e-gold account.
If someone transfers some e-gold into your account then you’re charged a small commission depending on the size of the transfer. As with the annual maintenance charge, the commission is charged in gold, rather than in any particular national currency.
On its home page e-gold waxes lyrical about how low its fees are, but when you, as a prospective e-gold user, click on the “fees” link to see what the fees actually are then you’re greeted by the following table:
|e-gold Spends||Price Formula|
|AUG 0.0004||AUG 0.1||5% + AUG 0.0002|
|AUG 0.1||AUG 0.5||1.25% + AUG 0.00375q|
|AUG 0.5||AUG 1||AUG 0.01|
|AUG 1||AUG 5||1%|
|AUG 5||AUG 0.05|
We showed it to JG, who—when he had stopped laughing—said:
One thing’s for sure, e-gold doesn’t have anything that would pass for a marketing department. Do they really think that every Internet user who might be interested in a “low-fee” e-currency account knows what “>=” and “<” means? What is this “q” at the end of “0.00375q”? Does anyone at e-gold read the web pages they publish? And do they really expect the average punter to look up the price of gold in his own national currency, get out a calculator, and then translate this table into something other than gibberish?
If they had even an “ounce”, nay a “gram”, of common sense, then they would have provided a facility where the punter could see what this table looks like in his own national currency based on the current gold price. Plus a “spend fees” calculator. Two boxes: one where the punter types in the amount of his proposed spend, and one where he selects his national currency. Then he presses a button and he’s shown what the actual spend fee is. The message this table shouts out loud and clear is that “E-gold is complicated financial stuff. If you set up an e-gold account then you’re sure to be besieged with more stuff like this that you won’t understand. Best to take your business elsewhere.”
Well, JG’s first axiom of marketing is don’t make things any more complicated for your customer than they have to be. And we must agree. E-gold is selling itself short here, by hiding the “light” of its low spend fees under a “bushel” of AUGs. If you’d like e-gold to implement JG’s suggestions, then its derrière can be kicked at:
In simple terms, using typical gold prices: for piddling little spends—that you couldn’t give a toss about—the spend fee is 5%; for real-world spends below $100 it’s in the range (1-2)%, and for spends above $100 it’s a flat $1.
E-currency Price Tiering
As you can see from our summary, e-gold’s price tiering is unnecessarily convoluted, and achieves nothing other than to give the impression to a prospective user that using e-gold is far more complicated than it actually is in practice. Irrevocable transactions carry a fixed cost to the e-currency issuer irrespective of transaction size, and therefore you can expect an issuer to try to adjust its price tiering to recover this cost—plus an element of profit—across the transaction value range. A bottom tier with a comparatively high charge is necessary for the micropayments region—below $2 in e-gold’s estimation. A flat charge is needed for high value transactions—above $100 in e-gold’s estimation. But, for medium value transactions a single tier is sufficient, in stark contrast to e-gold’s three tiers, which exhibit very similar percentage charges.
Despite e-gold’s unwitting attempts to hide its spend fees from its prospective users, the news on this front, as with the annual maintenance charge, is good news. As with the other e-currency issuers, running the e-gold system costs relatively little compared to running a credit card system, and that’s reflected in the low transaction charges paid by you, the e-gold account user.