An existing RMB client processes approximately 150,000 EFT transactions per month has acquired a business which process approximately 35,000 EFT transactions per month using Bank B. Your client informs you that bank B has offered a very attractive EFT processing price, in an attempt to retain their existing business and gain the EFT transactions that is processed by RMB. You have been asked to reconsider the client’s existing EFT price to ensure that RMB retains the existing volumes and secures the volume that is being submitted to Bank B for processing. • The client’s existing EFT pricing was increased by inflation to N$1.75 per transaction, including VAT during the June 2021 price review • 60% of the client’s EFT transactions are presented to FNB accounts • During the past year, RMB clients submitted 5,000,000 EFT transactions at a i. Variable cost of: 1. On-Us transactions is N$1,350,000 2. Off-Us transaction is N$1,800,000 ii. Fixed cost of N$2,500,000 • The client is a significant revenue contributor to RMB but the new acquisition will not influence any other revenue generated from the client. Recommend to the pricing committee a new EFT price for this client with motivation and how you will position this new price to the client?

Answer rating: 100% (QA)

Assuming that the client is willing to pay up to N175 per transaction I would recommend a ... View the full answer