Zecco.com, a Los Angeles company backed by early Skype investor, Morten Lund, says it is going to introduce “zero commission” trading Oct 9th, undercutting the entire industry of online traders, from E*Trade, Charles Schwab to Ameritrade.
The company’s Web site is blank right now, showing only a countdown to launch.
Outlandish, you say? Well, Lund (pictured here) funded Skype, the Internet telephone company which shook up the telecom industry, and he declares “there is absolutely no reason consumers should accept paying anywhere from $10 to $20 for a service that is easy to provide at no charge at all.” He says Zecco is his “biggest shot ever.”
Lund is not disclosing the amount he has invested. However Marcel Boekhoorn, a Dutch entreprenour, invested â‚¬4 million recently, the company said three weeks ago. Other investors include Dutch Coca-Cola chief Pier Baarsma, and Soren Kenner.
Lund said fierce competition among the major brokerages has led to massive customer acquisition costs, which prevent them from lowering costs further.
The actual cost of a trade is around $2, but the big guys are spending $500 or more per customer in marketing costs and are running their platforms on outmoded systems, Zecco.com founder and CEO Jeroen Veth said in a statement. Veth, 37 is a former Merrill Lynch Vice President.