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Abstract

A system for making payments from each payer of a community of payers to each vendor of a community of vendors assesses a variable transaction fee to each vendor. The system comprises a database which associates, for each payer, identification a selected rate tier assigned to each vendor. A rate tier assignment application determines an initial rate tier to assign to a vendor by: i) determining an industry sensitivity score, the industry sensitivity score being representative of how sensitive a typical vendor in the same type of business as the vendor is to payment of transaction fees; ii) determining a payer centric spend score; iii) determining a payer centric frequency score; iv) determining a network spend score; and iv) determining a network frequency score. These scores are used to determine an initial rate tier to associate with the vendor. A payment application, when making payment from the payer to the vendor, determines a transaction fee to apply to the payment, the transaction fee being a product of the amount of the payment and the transaction rate associated with the selected rate tier.

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