Ask IH: Would you pay?
Hey IH community, I'm conducting some research for a startup idea and would like to ask the community a question.
Let's say you're renting a car, and there is a $100 hold that is placed on your credit card for the duration of the rental. If you had the option to pay 9% of the $100 deposit, so $9 upfront to not have the $100 hold placed on your card during the rental, would you pay the non-refunded fee? That would mean during the duration of your rental, you would have access to $91 and wouldn't need to wait days after returning the car to get $100 back.
Consider the same option is available for other services like hotel rentals, Airbnb, apartment security deposit, etc.
Na man the people who have an issue with the money on hold do not wish to pay
9% is a lot as well
And your gonna be like an insurance for the worst clients probably..
They could offer the same with the insurance company if it catches as well..
I've been on the hotel side of things before, and have seen how much people complain about the hold so yes it is a problem. Obviously the type of people complaining are usually in the lower class. Anyone in the middle class, or even anyone who has a credit card is not going to want to pay 9%.
I'm not sure what type of startup you are thinking about here, but I'm not sure how this problem is solved? The hotels usually take that money in case you damage the room. Are you thinking about creating some sort of insurance company where you take the risk and front the cash?
I could definitely see a business like this taking off. Basically you'd sell to hotels and have their front desk staff ask their customers "would you prefer us to put a hold on your card, or just pay a non refundable fee of $9".
Although I think this is a viable business idea, this is not something I would pursuit. I can't even imagine the legalities of starting an insurance company. This would be impossible to bootstrap, and the B2B sales would be a nightmare. You would have to fight extremely hard to get any hotel, or rental company to integrate with you.
Unless you have some sort of secret industry knowledge, or some master plan to raise millions of dollars I'd look at another venture.
Yes, you're thinking about it correctly. I think the hard things are the best things, sometimes! If a market is too easy to enter, that usually isn't good for you if you want to scale. Thanks for your feedback and details comment, appreciate it!