C-gold: Interview With The Creator and Operator of Commerce Gold
Mark Herpel
June 21, 2009
What is your position at Commerce Gold?
Founder and managing director, with view to retain the chairmanship once I hand the reins to a professional ceo in a couple of years.
When did c-gold open it's doors?
Officially on 4 July, 2007.
Can I buy physical gold from Commerce?
Not directly, no. We don't buy, sell or exchange anything. Our job is to ensure secure storage of the gold and to provide the c-gold.com platform. Everything else is up to merchants and users.
Is c-gold considered a Digital Gold Currency? Are the digital units 100% backed by gold?
No, I don't consider it a currency, as much as I see it as actual gold. That means that we don't consider it digital units for something backed by gold, but instead as a digital expression of the actual gold. Thus, the amount of gold in storage is at all times exactly the amount expressed digitally, if you will.
Are all transactions final and not reversible?
Yes. In fact, our proprietary system specifically has no facility for reversing, canceling, or deleting transactions. Nor can we make any changes in customer accounts, delete accounts, etc. Our own support staff and even the compliance officer have "read-only" access and there is no "edit" function. This is to protect customers from us, and against someone taking staff hostage and holding a gun to their head.
For each transaction, sending digital gold from one account to another, there is a small transaction fee. Who pays that fee the sender or the receiver?
The recipient.
Do you still vault gold at a location in Penang, Malaysia?
It is stored by a private contractor in Penang, Malaysia, yes.
Why did you create Commerce Gold?
I have always been a believer -and fervent supporter - of the e-gold system. In fact, our hosting and domain businesses were for a very, very long time the last merchants that still accepted e-gold payments, because we believe in the system. Learning from their mistakes and putting together a platform for users in other countries was the logical next step, when American-centric online services had outlived their usefulness. Of course, there was also the issue that an oncoming crisis of epic proportions was drawing closer, and that millions of scared, unhappy people would run around in circles, searching for a way to preserve whatever wealth they had left -and have a way to use that wealth for commerce.
What advantages does C-gold offer clients over conventional banking or credit cards?
Given that our target market are up-and-coming developing nations, c-gold is typically the most reliable (and easiest to add) alternative for merchants who want to go beyond the limits imposed by only using a local bank in their country. Furthermore, the costs of using c-gold (end-to-end) are typically lower than using international bank wires, let alone the up front and operating costs of using credit card merchant accounts in the countries where online merchants can actually get them. So, c-gold is cheaper, easier to implement, and much faster than any offline or traditional service alternative.
What are the three top benefits to having a c-gold account?
1. Cheaper than Banks.
2. Quicker / Easier than Banks
3. Safer than Banks.
and that doesn't even account for the facts that one doesn't need multiple currency accounts, doesn't need to fear inflation, and that c-gold can't ever have a liquidity problem.
What is the smallest amount of digital gold that I could send to another user?
0.0004g
As a consumer, buying and selling merchandise online, what can c-gold do for me?
We can provide the platform to send and receive gold as payments in a quick, secure and convenient manner.
Is there an difference between a personal c-gold account and a c-gold merchant account?
No. Any verified user account can be used as a merchant account.
If I wanted to sell products from my web and add a 'Pay me with c-gold' button for each item is that possible?
Yes. That can be done easily using the Click-to-Pay URL system.
Does c-gold offer a shopping cart or cart integration?
Our "click-to-pay" interface can be integrated into shopping carts.
As an online merchant, how long would it take for me to add c-gold to my website as a payment method?
Depending on your coding abilities and the range of products and services you are offering, maybe 5-10 minutes.
How much can a c-gold merchant expect to save in fees over using a credit card merchant account?
Well, firstly there are no up front costs, and no complicated coding requirements. Then there is the fact that our fee of 1% tops out at 0.05g or about $1.50 at current rates. That means that once a transaction exceeds 5.00g or $150.00 the fee will always remain the same 0.05g Compare that to the 3 -12% charged by credit card processors and other online providers, and you'll save at least two thirds, but most probably much more.
e-gold was one of the most successful operations in the past decade. Their web site offered a ton of statistics such as amount of gold grams on deposit, number of transactions, velocity of spends and more. Does c-gold offer similar stats?
(c-gold Statistics) https://c-gold.com/stats.phpshows the activities during the last 24 hours, as well as total number of accounts, active accounts, gold stored, etc.
(c-gold Holdings) https://c-gold.com/holdings.php shows the actual serial numbers and origin of hallmarked bars in storage. c-gold is the first and only to actually do that, and we can supply the purchase receipts for each of them. On an aside, the Malaysian storage provider has to actually account for the gold in their audited annual returns to the Malaysian tax department.
(c-gold exchange rates) https://c-gold.com/exchange.php shows the price of gold grams in a number of local fiat currencies
https://c-gold.com appears to be your main web site address. What is the domain https://c-goldpay.com/ ? Is this a phishing web site?
It is a gateway domain that helps with load balancing. We announce gateways in our forum whenever the load on the main domain is leading to prolonged time outs and delays. The important thing about gateways is that they always use the c-gold.com SSL certificate. So, to avoid getting phished, always check that the certificate comes from c-gold.com
Has c-gold ever been hit with a DDOS attack?
Yes.
For consumers, what is the benefit of me having a local office of Commerce Gold?
The ability to make bailments on the spot, and at a later point, as part of our longer-term strategy, to collect merchandise they ordered from c-gold merchants. I can't give you too many details about that just yet, but think mail order catalog from global suppliers to global buyers.
As an expert in this industry for many years, where do you see an expanding customer base? What areas of the world or age groups (demographic) etc?
We have high hopes for China, Southeast Asia, the Middle East and Africa, especially. But as government policies seem to be hell bent to sink their respective economies in the West, it looks as if we might end up with substantial growth through virtual economic refugees in those countries, as well. Basically, we expect a grass-root explosion of small businesses once the current crisis gets deeper, and large numbers of people who by then have lost their trust in legal tenders and are looking for alternatives. When that happens, then c-gold is the logical (only?) path for expansion of localized barter swapping, which typically replaces paper money in the midst of a severe crisis.
How many Commerce Gold shops (independent franchisees) does c-gold have around the globe? Can you tell us where they are located?
We have two types of franchisees. The first is language based and encompasses all countries and territories in which a particular language is the main tongue. The second is country based, and is meant for countries that use English as their primary (official) language. Currently we have French, German, Spanish, Russian, Farsi, Arabic and Indonesian, as well as our first country franchise in Nigeria. We are talking to interested parties for Mandarin (Chinese), Japanese and Korean, and for India and Canada for country franchises. However, none of them have opened a store front as yet, because the current economic situation -and the legislative environment in some countries - does not yet warrant the outlay. after all, a shop front requires more than a location and a desk. Think assaying equipment and training, storage facility, security, etc.
How do I become a Franchisee and what does that mean?
Franchisees, while running their businesses independently, do become c-gold's exclusive go-to venture in their respective territories. They provide customer support to the users in their area, have the exclusive rights to open shops, appoint sub-franchisees, and are the only ones that can accept bailments and facilitate redemptions. Exchangers and merchants located within a franchise territory are also held to deal with the respective franchisee, rather than with us. On the direct benefit side, franchisees earn up to 70% of all transaction fees, and can set their own bailment and redemption fees, trade with exchangers, etc. (depending on their location and applicable laws). Becoming a franchisee is straight forward and fairly easy -for qualified individuals. But we do vet applicants, and may require a bond to be bailed into c-gold, in addition to charging a once-only franchise fee (which depends on the country and potential market size). We also provide training in combating fraud, verification procedures, AML systems, etc.
Multiple Choice - Has the number of c-gold customer holding accounts grown:
(A) Much faster than we expected. We are very excited about the future.
(B) Growth has been slow and has currently leveled off.
(C) There is no way to know whether our growth is fast or slow, there are no other companies like ours for a proper comparison.
(D) None of your business, stop asking me such questions :-)
(insert) E-- slower than expected initially, but nevertheless the number is growing steadily, and our ratio of account opening to account usage is an amazing 3.5 : 1 I believe that c-gold is the first to achieve anywhere near that ratio.
Would you permit the funding of an account with gold Dinars?
Do you mean the dinar gold coins (yes), or the e-dinar gold-backed currency (no)?
Where do you see the price of gold moving to in the next 2-3 years?
Price of gold? You mean the barter value of gold in return for other items of tangible value? Well, that will probably remain very much the same for the foreseeable future. After all, in terms of gold, the average home price hasn't changed much for the past 100+ years. Nor have the cost of a barrel of oil, a decent three-piece suit, a good dinner for two with wine, etc. There are occasional spikes in which gold rises or falls slower than the cost of other items in fiat currency terms, but these are typically short lived. If you want me to predict the dollar value of gold, well, I'm no prophet or oracle, but, based on past data, I'd expect gold to rise after a brief correction next month, and then continue to rise until the crisis is over and equilibrium is reached between the price of gold and the price of consumer items.
If I want to withdraw a kilo of gold from my account, can you ship it to me outside of Malaysia?
We don't ship anything. But, you can contact a shipping company, have them pick up and sign for a bar, and have it delivered to you, provided this is allowable in your country of residence, of course.
Does c-gold offer digital silver or digital platinum?
No.
What locations can I visit if I want to add gold bullion to my c-gold account?
The primary storage facility in Penang, Malaysia. Tuesdays and Thursdays 2:00 - 4:00 PM, by appointment. Two of the franchisees are also preparing to accept direct bailments, but the locations of their facilities are yet to be announced.
I have three kilos of gold in my briefcase today, if I was local and wanted to deposit that to my c-gold account, what would I have to do?
Call ahead, drop by (bring two pieces of id), drop them off, wait for preliminary assaying. Then you get a receipt and a bit later the kilos appear as bailments in your verified account.
If I want to redeem digital gold and pick up physical gold at your office, is there a minimum amount for this transaction?
Yes. You can currently only redeem kilo bars. Smaller amounts will become available when we start making our own pieces.
Can I pick up one or two ounces?
Never in ounces. Commerce gold pieces will be gram-denominated (10, 25, 50, 100, 500)
Are there any c-gold merchants today that would deliver a small amount of gold to me via snail mail and accept c-gold grams?
Not that I know of, but I'm sure if you'd make it worth their while that someone might rise to the occasion.
If I have questions or comments about c-gold can I post them and get a response from your forum?
Absolutely. The forum is especially meant as a source of information and a means for users to communicate with each other, as well as a platform for us to stay in touch with users if there ever is a problem with the c-gold platform. That is also why we chose an external provider to host the forum.
Smart people have been parking their money in digital gold and silver to avoid losing value as they would if the money was in a bank. GoldMoney is not yet widely used for commerce, in fact I think c-gold has more merchants.
GoldMoney is targeting a different user base and has different revenue models to c-gold. While we do have quite a few users who use their c-gold accounts as a cheap and convenient way to store gold, which we certainly welcome, our primary target market are merchants and their customers. and yes, c-gold has more merchants than any other value-based platform online today. in fact, we had more reputable exchangers adopting c-gold within the first month of our opening, than any other provider in the history of the industry.
Multiple Choice:
I know the 'c' stands for 'commerce' but was c-gold originally set up to facilitate:
(A) Online consumer/merchant sales transactions?
(B) Easy and inexpensive online fund transfers around the globe?
(C) An easy way to accumulate wealth and save money using gold?
(D) All of the above?
(E) None of the above?
F] = A&C with the qualification that our merchant/ consumer-centric strategy encompasses offline merchants, as much, if not in fact more, than online ones.
Where do you get your daily spot prices from?
We have a triple-tier, starting with DGCSC.org, failing which Kitco.com, failing which there is an interface for uploading rates from external sources (in case there is a web outage and we have to work with email, text messages, etc,)
Does c-gold have a referral or program so I could earn some gold referring new customers?
Yes. referrers can earn up to 20% of all transaction fees generated from users they referred.
Are there any monthly fees for a c-gold account?
There is an annual storage fee of 1% of the gold stored. This is being charged as 1/12th of 1% on a monthly basis. Meaning, 0.0833% of the gold stored during the preceding month is charged at the end of each month. This fee is actually about the same amount we are paying the storage provider. Which probably explains why we target merchants and their customers, as we generate our income from the transaction fees.
If I wanted to start accepting c-gold as a payment method from customers, is there a lengthy merchant account and acceptance procedure like a credit card merchant? Does my business need to go through a credit check when opening a c-gold account?
No. Apply for a c-gold account. Upload your id. Integrate c-gold payments into your online platform (or use click-to-pay url links). done. There is a second-tier requirement to become an approved exchanger listed in our merchants index, but even that is a very simple and straight forward procedure. If you have a registered business or company, then there are additional verification requirements (copy of registration, letter of authorization from the board for the person responsible for operating the account). But that is all. No credit checks, bank references, etc. are needed.
Is there a fee for setting up a c-gold account as a merchant?
No. Every verified user account IS a merchant account.
Does c-gold offer mobile access, can I log on with my cell phone?
Depending on your cell phone and service provider you should be able to access the normal website on your cell phone. We decided to forgo a specific cell phone / wap access option, because we considered the technology obsolete -which in Asia it very much is. Most phones here are g3 ready and all access providers offer full "always-on" internet access. i believe that the situation is similar in Europe by now.
I'm really impressed with the number of exchangers and merchants listed in your online directory (http://c-gold.biz/) How many independent exchangers do you have handling c-gold around the world?
There are around 50 independent exchangers, some 30 of which are approved for listings in the merchants index.
For people reading this article and want to try out a new Commerce Gold account today, what personal information, documents or ID will they need to get started?
None. accounts can be opened for test purposes with disclosure of true and correct name and address details and a working email account. The account can then be used for a few transactions before id and proof of address must be uploaded. This is meant to give people the chance to become comfortable with the system before having to trust us with their credentials. However, if compliance feels that a name and/or address are bogus, they'll change the passphrase and demand id right away.
Both PayPal and Moneybookers accounts, which accept credit cards, have limits on how much a user can send or transact through their account. Are there any monthly limits on the funding amounts or number of transactions for a c-gold account?
No, there are no limits for verified accounts, but compliance will scrutinize high volume accounts more closely and might request additional information on a case-by-case basis. We are trying to balance security and protection with ease of use and customer comfort as much as possible.
How much gold to you have on you right now?
Just enough to be taken serious by Chinese business men ;o)
I'd like to thank Robert for taking time to answer my questions. Robert requested for publication that his last name be omitted for privacy reasons.
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