Section 03
The instruments
Two things to work with rather than read. The thresholds are ours and they are arguable — change them and see what survives. Neither instrument chooses between the two interpretations.
How to use this page
The two figures here are not illustrations of a conclusion we already reached. They are the working model with its assumptions exposed. Every threshold in them is a choice somebody made, the choices are arguable, and so they are adjustable — with the defaults labelled as ours rather than presented as given.
If you disagree with where a bar is set, move it. If the answer changes, that tells you the conclusion was resting on the bar rather than on the evidence, which is worth knowing either way.
Which corridors are worth investigating for a payments product
A corridor has to clear four separate tests, and they are genuinely independent — a corridor can pass three and fail the fourth. That is what makes the screen useful rather than decorative.
Is there a margin pool at all? Only if the payment crosses a currency boundary. Every European instrument that has compressed payment pricing has compressed it within a single currency; none of them touches the conversion. So a euro payment from Germany to Spain is cross-border and carries essentially nothing worth competing for.
Can routing capture it? Only where several genuinely usable routes exist. Where one supplier dominates, or only one exists, the pool is still there — but it is taken by repricing the whole stack, not by choosing between options.
Can we hold the conversion? The margin sits on the currency conversion. A corridor where that permission is reserved to domestic banks pays its margin to somebody else no matter how well we route.
What does it cost to get in? Licence capital ranges from nothing to several million — and in more than one market the expensive licence still does not include permission to sell the conversion.
Set the two adjustable thresholds and see what survives.
Scope of this instrument
For the payments-company interpretation, this is a discovery screen: it identifies corridors worth taking into live pricing and counsel, not markets authorised for launch. For the platform-company interpretation, it is a downstream tool. That strategy starts with a licensed design partner and its real payment book, then uses this screen to examine the corridors the customer actually needs.
Licence and currency basis
The figures in the matrix are statutory or regulator-published minimum capital, not fees, consultant estimates or total launch budgets. Primary sources include Colombia’s Superintendencia Financiera, Bank Al-Maghrib’s consolidated rules, Kenya’s Money Remittance Regulations, Pakistan’s exchange-company framework, and Bank of Uganda’s licensing guidance. Rounded EUR equivalents use the 11 August 2026 EUR reference snapshot; they are orientation values, not capital requirements in euros.
Three results are worth noticing whatever thresholds you choose. Caribbean and Central America remain outside the matrix: that label combines multiple jurisdictions and currencies, and its one to three verified suppliers are insufficient for the dispersion screen; there is no honest single local-currency licence number to attach to it. Colombia is now a good example of why all four gates must remain independent: it leads on dispersion and can own the conversion locally, but the relevant capital is above the default threshold. And the intra-European cross-currency pocket has a real pool and almost no routing content, making it the most defensible near-term margin and the weakest demonstration of the routing thesis.
How ticket size changes the answer
Almost every discussion of payment routing assumes the available options are the same whatever the amount. They are not. Four separate constraints bite at four different sizes, and they compound rather than overlap.
Card payout is capped by scheme rules at tens of thousands. The token route is capped by how much can be traded without moving the price against you. One Brazilian licence tier is capped per operation by regulation. And the evidence base itself thins out above ten thousand, because that is where the price measurements stop.
Only two of the five routes have no ceiling at all, and both of them are ordinary correspondent banking — the rail this whole thesis was meant to improve on. Drag the ticket size and watch the option set collapse onto it.
| Rule | Bites at | What imposes it |
|---|---|---|
| 1 | ≈ €43,300 | Card scheme rules cap money pushed to a card at US$50,000 per transaction. Against instant-payment systems that carry ten million, this is a consumer-disbursement rail. |
| 2 | ≈ €86,500 | Brazilian regulation caps spot currency conversion with a customer at US$100,000 per operation for a payment institution, US$500,000 for a brokerage, and leaves it unlimited only for a bank. The licence tier we could realistically hold fails exactly where business payments begin. |
| 3 | ≈ €2m | Measured depth of the euro-denominated token market: economically capped at one to two million per transaction, physically exhausted around five, with no deeper venue behind it. This is the ceiling you inherit rather than the ceiling that exists. It binds only if the euro conversion is done on chain — and the architecture this work recommends does it in the fiat market instead, which removes the constraint. What replaces it is not depth but a counterparty term: the dominant issuer meters redemption above $40m a day and caps its standard tier at $10m, so the real ceiling above this line is whatever redemption capacity has been contracted for. That is a negotiation, not a market fact, and nobody has had it. |
The shape of that curve is the uncomfortable part. The routing decision is richest at the sizes where the money is smallest: at a thousand euros there are five routes and the whole dispersion is worth about four euros, while at a million there are three and it is worth several thousand. The option set and the value of exercising it move in opposite directions.
The two findings that shape this are in tension, and the tension is real: routing pays in three corridors of ten, and only below €10,000, while compliance costs run to tens of basis points on a €1,000 ticket at launch scale — more than the entire routing gain. Routing pays where the economics do not, and the economics work where routing does not.