An e-wallet, as the name suggests, is an electronic wallet that you fund with real money. After funding your account you’re then able to electronically send money all over the world to people or companies, with the idea being that after the money is sent, the receiving party is able to withdraw the money out.
When this withdrawal occurs, typically the e-wallet provider takes their cut – either via a flat rate fee and/or charging a percentage of the withdrawn amount.
As far as MLM companies and paying commissions out via an e-wallet goes, with a leadtime of anywhere up to a month the company knows exactly how much is being requested by their members. Subsequently they have ample time to make sure they’ve funded their e-wallet account with enough money so that when they send the e-wallet company instructions on who to pay out and how much, things run smoothly.
Whether the MLM company is using one e-wallet provider or twenty, the process is the same.
Despite this reality, according to Zeek Rewards’ COO Dawn Wright-Olivares this is not how e-wallet payment solutions work. She insists that unless company members deposit money into an e-wallet account first, then the company is entirely unable to pay out commissions using that e-wallet provider.
In a somewhat revealing leadership call hosted on June 25th 2012, Wright-Olivares (photo right with MLM Helpdesk’s Troy Dooly) explained e-wallet solutions as being “lumps of leather” that needed to be filled with money before money could be withdrawn from them.
That much is true. A MLM company tracks commission requests to an e-wallet provider, transfers the appropriate amount of money from the company bank account(s) and then sends off the commission requests to the e-wallet provider so that they can process them and issue payment from the company’s e-wallet account.
Or as NXPay describe the process:
Your company establishes an NxPay® account whereby you (the company) deposit your payroll / commissions funds (by check, wire transfer or ACH). Then each of your independent representatives establishes an NxPay® account as well.
Once all of the accounts have been set-up, your company creates a spreadsheet (within your NxPay® account) that tells NxPay® how you want to distribute the funds deposited.
“Payroll / commission funds” is the money the MLM company deposits into NXPay to cover commissions, and the spreadsheet they send NXPay details who is to be paid how much (based on previous commission requests from their members).
Straightforwardly simple right?
Not so with Zeek Rewards. Zeek COO Dawn Wright-Olivares claims that Zeek Rewards are only able to pay out commissions to their members once new and existing members have injected enough new money into Zeek Rewards’ e-wallet accounts to cover commission requests.
On yesterday’s June 25th Zeek Rewards leadership call, Wright-Olivares told company affiliates that
[3:45] The issue that we’ve had with NXPay, alright everybody wants to know “just turn the lights back on!”.
Okay, so guys it’s like when you take out your wallet or purse from your back pocket, whatever is in there that you personally put in there, is the only money okay that you can go ahead and pay for your next grocery trip with.
Okay, you might have cards in there, you might have checks in there but, if we’re talking cash, which is how an e-wallet works, whatever you guys (Zeek Rewards affiliates) have used to go ahead and make purchases from us with okay, is what’s in the e-wallet that we can turn around and pay payroll with. It’s not a depositing bank account.
[4:50] Whatever you guys (the affiliates) have purchased stuff from Zeek with, is what we can then turn around and pay commissions with.
You can’t just go in there with your bag of money and go “here” (laughter).
Yet that’s precisely how e-wallets work. Just like affiliates have to fund their e-wallet accounts with outside money (typically from a bank account), so to do Zeek Rewards have the capability to fund their e-wallets from their own bank accounts.
Alarmingly, Wright-Olivares appears to be stressing that, despite all the talk about Zeekler auctions generating profits, Zeek Rewards pays out affiliate commissions exclusively from affiliate money going into the company.
No new affiliate money coming in? No commissions are paid out, at least not via the e-wallet solution you might choose.
Out of the three e-wallet providers Zeek Rewards uses, NXPay was easily the cheapest when it came to withdrawal fees, being the only one to offer a low flat-rate fee.
As such, despite taking deposits into their NXPay account for a few months before enabling withdrawals, upon accepting withdrawal requests it was a mere few weeks before funds were exhausted and Zeek Rewards turned off NXPay withdrawals again.
At the time of publication only deposits into Zeek Rewards are possible via NXPay, with Wright-Olivares explaining to affiliates that
[5:05] The more you go ahead and convert your purchasing from Zeek Rewards through NXPay, the more we can afford to pay out in commissions from NXPay.
[5:40] It’s up to you whether there’s enough money in NXPay to pay everybody who’s asking to utilise that e-wallet for their income.
[6:13] If you’re somebody who wants to withdraw your commission checks through NXPay, then make your purchases through NXPay. What goes in can come back out.
Rather than Zeek Rewards fund their e-wallets as required for commission payouts on a rolling basis (which is just plain common-sense), it seems Zeek Rewards run their e-wallet accounts as somewhat of a vault.
This is confirmed in Wright-Olivares explanation as to why they haven’t had to remove Solid Trust Pay and Alert Pay. It’s because Zeek Rewards has
[5:52] been using Alert Pay and Solid Trust Pay for a really long time, so those balances have a lot more in them so they… so everybody can go ahead and request cash through them and there’s plenty in there because you’ve (the affiliates) have been purchasing so much through them.
One strong point of contention over the long-term sustainability and viability of Zeek Rewards’ business model has been disclosure of the percentage of affiliate money that is pumped into commissions paid out to affiliates.
Zeek Rewards claim this percentage amount is proprietary information and during a recent Aces Radio live interview, Troy Dooly from MLM HelpDesk (credited as a ‘Zeek Rewards Training Consultant’ at their last “Red Carpet” event), even went so far as to claim that should Zeek Rewards answer that question, they’d be putting themselves out of compliance because ‘no network marketing company pays out from the acquisition of affiliates‘.
Yet here we have the Chief Operating Officer of Zeek Rewards telling affiliates on a company call that unless affiliates (new or existing) deposit more funds into the scheme via way of internal consumption purchases, they can’t pay out commissions.
In claiming that their Solid Trust Pay and Alert Pay accounts are so well-funded why Zeek Rewards doesn’t just withdraw and transfer this money into their NXPay account to cover commissions (remember, they have a two-week grace period on requested commission withdrawal amounts), is a mystery.
Meanwhile an even bigger question mark looms still over why Zeek Rewards made such a dedicated push towards electronic commissions after scrapping the sending out of checks which, to the best of my knowledge, they never missed a beat paying out commissions with.
The cynic in me would point to this recent admission and appeal to affiliates to deposit more funds into Zeek Rewards so that they can pay out commissions as ongoing evidence in support that they are, quite obviously, running a giant Ponzi scheme between affiliates that has nothing to do with their Zeekler auctions.
If you consider that for each dollar Zeek Rewards affiliates spend with Zeek Rewards (excluding membership fees) attracts a >100% ROI via the bid scheme, it’s blatantly obvious that sooner or later the Solid Trust Pay and Alert Pay balances wouldn’t cover commission payouts to all their affiliates.
The simple fact of the matter is that no matter how many e-wallet solutions you use, you can’t pay out more than affiliates are pumping into the company. And that’s pretty much what Dawn stated on yesterday’s leadership call.
And just so we’re clear it wasn’t some random once off misunderstanding either, the same information about affiliates needing to deposit more with the company before they could pay out was repeated on both company calls for the evening.
Looking forward it appears that Zeek Rewards affiliates either have the choice of using e-wallet solutions that attract hefty fees for those with large withdrawal requests, or are stuck waiting for new and existing members to deposit more money into NXPay so that Zeek can use this money to pay out existing affiliates.
Those affiliates who have already invested the maximum allowable $10,000 into the scheme can literally do nothing but wait, unable to personally deposit more money into the company.
But remember folks, this is not an investment scheme, Zeek Rewards aren’t paying out commissions with future money they don’t have yet and all the company revenue doesn’t come from Zeek Rewards affiliates, but rather from the Zeekler penny auctions.
Right you are Zeek Rewards Compliance Department, right you are.
The Zeek Rewards Leadership call can be listened to below in its entirety (all timestamps in the above article are referenced from the call itself and the YouTube video was up at time of publication):