TranzactCard operates in the banking and cashback MLM niches.
On its website, TranzactCard identifies its Founder and Chairman as Richard Smith.
On the corporate side of things;
TranzactCard LLC is a wholly owned subsidiary of TZT Holdings LLC. TZT Holdings owns the brand “TranzactCard” and the TranzactCard Financial Ecosystem.
On LinkedIn Smith cites himself as TZT Holdings’ Executive Chairman.
Long story short, Richard Smith owns and operates TranzactCard.
TranzactCard operates from two primary website domains; “tranzactcard.com” and “mytzt.com” – both first registered in April 2021, with private registrations last updated on April 29th, 2023.
Although we didn’t know it at the time, BehindMLM first came across Richard Smith’s MLM work with Divvee in mid 2016.
Instead of the fronting the company he was a co-founder of, Smith initially hid behind CEO Allen Davis.
Divvee’s original concept flopped and it was rebooted as Divvee Rank and Share in November 2016. Sometime after Smith and co-founder Troy Muhlestein became the face of the company.
By July 2017 it was apparent Divvee Rank and Share had also flopped. This prompted a pivot to forex trading securities and commodities fraud.
After that we had Nui – a continuation of the aforementioned securities and commodities fraud.
The Texas State Securities Board would go on to fine Nui $25,000 in February 2019.
I don’t know exactly when Richard Smith left Nui but he resurfaced with The Digital Vault and RevvCard in March 2019.
The Digital Vault and RevvCard were supposed to bring fiat banking services to Nui’s crypto fraud.
In April 2019 The Digital Vault relaunched as R Network.RevvCard still hadn’t launched and wasn’t due to launch for another eight months.
By mid 2020 the original concept for RevvCard had been scrapped. Smith began offering stock ownership in R Network, despite neither himself or the company being registered with the SEC.
What was left of R Network quietly died off after that. In March 2021 what was left of R Network was sold off to iX Global.
We didn’t hear anything further from Smith until TranzactCard surfaced on or around April 2023.
Read on for a full review of TranzactCard’s MLM opportunity.
TranzactCard markets a VISA credit card.
TranzactCard is (a) the digital and plastic transaction card that carries the approved Visa bank card brand and can be used anywhere in the world that Visa is accepted, and (b) the public facing brand of the TranzactCard Financial Ecosystem.
TranzactCard’s website Terms of Service reveal the card is issued through CBW Bank.
This TranzactCard Visa Credit Card Agreement (this “Agreement”) constitutes a legal agreement between CBW Bank, Member FDIC (“Bank” and, together with Bank’s successors and assigns, “We”, “Us” and “Our”) and the individual (“You” or “Your”) that applied and qualified for the TranzactCard Visa® Credit Card (“Card”).
TranzactCard’s official FAQ adds two more banks into the mix;
Evolve Bank and Trust, N.A. is the current bank during the soft launch of TranzactCard.
Functionality wise TranzactCard’s VISA card has daily and monthly caps in place:
Currently the security limits for your TranzactCard account are $5,000.00 per day with a maximum limit of $15,000.00 per month.
Both retail customers and recruited affiliates can sign up for a TranzactCard card.
One of the selling points of TranzactCard’s VISA card is Z-Bucks.
Z-Bucks are awarded at a rate of $1 spent on the card = 1 Z-Buck.
TranzactCard represents that Z-Bucks can be used to purchase products and services from an internal marketplace.
Note that actual money can be combined with Z-Bucks on internal TranzactCard marketplace purchases.
TranzactCard card membership is $25 for 12 months and then either $4.95 a month or $47.50 annually.
TranzactCard’s Compensation Plan
TranzactCard’s compensation plan pays on usage of the company’s VISA card by retail customers and recruited affiliates.
TranzactCard calculates commissions using “Basis Points”.
Basis Points (BPs) are specifically calculated on
transaction interchange fees, earnings from bank fees, bank incentives, product margins, ad vendor volume incentives.
These transactions are counted from referred retail customers and a TranzactCard’s recruited downline.
TranzactCard assigns Basis Points a 0.0001% percent value of each transaction in the categories above made.
With respect to commissions paid out, TranzactCard caps commissions earnable from TranzactCard usage by recruited downline affiliates at 30%.
If the actual amount is 30%, the payable ratio is lowered until a 30%/70% ratio between downline affiliate card usage and downline retail customers is reached.
TranzactCard Affiliate Ranks
There are six affiliate ranks within TranzactCard’s compensation plan.
Along with their respective qualification criteria, they are as follows:
- Digital Branch Office (DBO) – sign up as a TranzactCard affiliate, pay monthly fees and personally refer at least three retail TranzactCard members
- Manager – continue to pay monthly fees, generate and maintain twelve retail TranzactCard members across your downline and recruit and maintain three Digital Branch Offices or higher
- Senior Manager – continue to pay monthly fees, generate and maintain thirty-nine retail TranzactCard members across your downline, personally recruit and maintain three Managers or higher and generate and maintain a total downline of twelve DBO or higher ranked affiliates
- Vice President – continue to pay monthly fees, generate and maintain one hundred and twenty retail TranzactCard members across your downline, personally recruit and maintain three Senior Managers or higher and generate and maintain a total downline of thirty-nine DBO or higher ranked affiliates (at least nine must be Manager or higher)
- Senior Vice President – continue to pay monthly fees, personally refer and maintain six retail TranzactCard members, generate and maintain seven hundred and twenty-six retail TranzactCard members across your downline, personally recruit and maintain six Vice Presidents or higher and generate and maintain a total downline of two hundred and forty DBO or higher ranked affiliates (at least fifty-four must be Manager or higher)
- President – continue to pay monthly fees, personally refer and maintain nine retail TranzactCard members, generate and maintain one thousand and eighty-nine retail TranzactCard members across your downline, personally recruit and maintain nine Vice Presidents or higher and generate and maintain a total downline of three hundred and sixty DBO or higher ranked affiliates (at least eighty-one must be Manager or higher)
Required referred retail customers can either be personally referred customers or referred by recruited downline affiliates.
Note that to qualify towards rank qualification, referred retail customers and recruited affiliates must be paying monthly fees.
TranzactCard affiliates receive Basis Points off transactions generated by personally referred retail customers based on rank:
- DBOs receive 10 BPs per personally referred retail transaction or 5 BPs per transaction from a company assigned retail customer
- Managers receive 12 BPs per personally referred retail transaction or 6 BPs per transaction from a company assigned retail customer
- Senior Managers receive 14 BPs per personally referred retail transaction or 7 BPs per transaction from a company assigned retail customer
- Vice Presidents receive 16 BPs per personally referred retail transaction or 8 BPs per transaction from a company assigned retail customer
- Senior Vice Presidents receive 18 BPs per personally referred retail transaction or 9 BPs per transaction from a company assigned retail customer
- Presidents receive 20 BPs per personally referred retail transaction or 10 BPs per transaction from a company assigned retail customer
TranzactCard pays residual commissions via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Residual commissions are paid as the sum total of Basis Points generated on up to ten unilevel team levels.
How many unilevel team levels a TranzactCard affiliate receives Basis Points on is determined by rank:
- DBOs are paid on up to five unilevel team levels, they get 5 BPs on downline referred retail customers, 10 BPs on personally recruited affiliates (level 1) and 5 BPs on downline recruited affiliates across levels 2 to 5
- Managers are paid on up to six unilevel team levels, 6 BPs on downline referred retail customers, 12 BPs on personally recruited affiliates (level 1) and 6 BPs on downline recruited affiliates across levels 2 to 6
- Senior Managers are paid on up to seven unilevel team levels, 7 BPs on downline referred retail customers, 14 BPs on personally recruited affiliates (level 1) and 7 BPs on downline recruited affiliates across levels 2 to 7
- Vice Presidents are paid on up to eight unilevel team levels, 8 BPs on downline referred retail customers, 16 BPs on personally recruited affiliates (level 1) and 8 BPs on downline recruited affiliates across levels 2 to 8
- Senior Vice Presidents are paid on up to nine unilevel team levels, 9 BPs on downline referred retail customers, 18 BPs on personally recruited affiliates (level 1) and 9 BPs on downline recruited affiliates across levels 2 to 9
- President – are paid on up to nine unilevel team levels, 10 BPs on downline referred retail customers, 20 BPs on personally recruited affiliates (level 1) and 10 BPs on downline recruited affiliates across levels 2 to 10
Rebate Check Bonus
When a TranzactCard affiliate qualifies at Manager they receive a $500 rebate check.
What a rebate check is isn’t clarified but it sounds like a credit against their Visa card spend.
Manager Development Grants
The Manager Development Grant is a bonus paid when downline when downline TranzactCard affiliates qualify at Manager.
- Managers receive a $50 Manager Development Grant across six unilevel team levels
- Senior Managers receive a $50 Manager Development Grant across seven unilevel team levels
- Vice Presidents receive a $50 Manager Development Grant across eight unilevel team levels
- Senior Vice Presidents receive a $50 Manager Development Grant across nine unilevel team levels
- Presidents receive a $50 Manager Development Grant across ten unilevel team levels
The Leadership Bonus is a monthly bonus, paid on the amount of Manager and higher ranked affiliates in a TranzactCard affiliate’s downline.
- Managers receive $6 a month per recruited Manager or or higher across six unilevel team levels
- Senior Managers receive $7 a month per recruited Manager or higher across seven unilevel team levels
- Vice Presidents receive $8 a month per recruited Manager or higher across eight unilevel team levels
- Senior Vice Presidents receive $9 a month per recruited Manager or higher across nine unilevel team levels
- Presidents receive $10 a month per recruited Manager or higher across ten unilevel team levels
Senior Manager and higher ranked TranzactCard affiliates earn a Matching Bonus on Leadership Bonuses paid to personally recruited lower ranked Managers and higher.
E.g. if you’re a Vice President you’ll earn the Matching Bonus on personally recruited Managers and Senior Managers.
Power Save Account
TranzactCard offers a Power Save Account.
In a marketing video on the official TranzactCard YouTube channel, Eric H. Allen claims the Power Save Account provides a
fixed interest rate, higher than any bank you’ve ever seen. And the other part is going to be variable interest tied to our real-estate investment trust.
TranzactCard affiliates build their Power Save Account balance through three methods:
- 1% of Z-Bucks spent is contributed the Power Save Account
- a 2-4% cashback offered at retailers is sent to the Power Save Account
- every purchase made with a TranzactCard can be rounded up to the nearest dollar, with the rounded up amount sent to the Power Save Account; and
TranzactCard affiliate membership is $495 and then $150 a month.
If you take out the Power Save Account, TranzactCard is basically a cashback opportunity with an MLM compensation plan.
Your compensation, including bonuses, is solely dependent on the transactions of Members and annual card membership fees within your Digital Branch Community.
Compliance wise TranzactCard has a retailable product (the card), and there’s a decent effort to encourage retail customer referrals via hard personal and downline retail customer requirements.
To get into the Power Save Account we first need to look at Z-Bucks.
Z-Bucks are essentially cashback which can only be spent within TranzactCard. This isn’t unusual with card offerings although cashback is usually just returned as cash.
I wanted to clarify that because spending Z-Bucks seems to be a primary way to build a Power Save Account.
An official TranzactCard “Glossary of Terms” document defines the Power Save Account as
a long-term savings account that grows steadily and automatically, building financial momentum.
Compounding is mentioned in TranzactCard’s marketing, so this is very much an savings/investment account paying a passive return.
That side of the Power Save Account is definitely a security. Where I pause though is on how the funds get into the Power Save Account.
First, if you’re like me, you might be wondering whether it’s actual money or Z-Bucks that go into the Power Save Account.
As revealed by Eric H. Allen in the previously cited official TranzactCard marketing video, it’s actual money.
[5:32] 1% of all the Z-Bucks you burn is going to go in this Power Save Account.
So you burn 100 Z-Bucks, a dollar cash goes in your Power Save Account.
So we’ve established the Power Save Account is real money and not Z-Bucks.
As far as I can tell, there’s no direct way for a TranzactCard affiliate to deposit/invest into the Power Save Account. And, if I’m not mistaken, this is what Richard Smith is hinging TranzactCard’s securities compliance on.
What it basically comes down to, with respect to the Howey Test, is whether TranzactCard’s indirect funding of Power Save Account count as a deposit/investment?
I can’t directly answer that because this is the first time I’ve seen this specific type of set up. Honestly, I’m not 100% sure on making a securities fraud call either way.
Props to Richard Smith for throwing me a curveball.
After thinking about it for a bit, what I can provide is comparison to a pretty similar model – Zeek Rewards’ “VIP bids”.
Zeek Rewards was set up such that direct investment was also not possible. Affiliates had to invest in “VIP bids”, VIP bids were dumped on non-affiliate accounts, which generated “VIP Reward Points”.
VIP Reward Points were internally worth $1 each. Crucially to Zeek Rewards’ investment scheme, they were held in an account on which a daily ROI was paid.
The daily ROI could be compounded, in much the same manner TranzactCard’s Power Save Account does.
To better illustrate the similarities, here’s a breakdown:
- real money invested in VIP Bids (real money in)
- bids dumped on accounts (action)
- VIP Points generated based on 1:1 with VIP Bids dumped (action 2)
- passive ROI paid on VIP Point balance that can optionally be auto-compounded (ROI).
- real money spent on whatever and Z-Bucks generated (not quite the same as real money in but real money spent)
- Z-Bucks spent again on whatever internally (action)
- 1% of V-Bucks spent internally = $1 generated in Power Save Account, or cashback or rounding up (action 2)
- passive ROI paid on dollar amount in Power Save Account that can optionally be auto-compounded (ROI)
Like I said it’s not a 1:1 comparison but the general theme is there. I suppose a key difference is that Zeek Rewards took in real money paid for VIP Bids, whereas TranzactCard’s VISA card can be spent anywhere.
This does raise the question of how TranzactCard’s passive returns are going to be generated. TranzactCard claim it’s a “fixed interest rate” plus a “variable rate” from a “real-estate investment trust”.
No specific details about this have been made public. This might be violation of the FTC Act (disclosures), as well as a securities compliance issue in and of itself.
Remember, TranzactCard’s official marketing videos promise a “fixed interest rate, higher than any bank you’ve ever seen”. Not disclosing how is a problem.
I also might be suffering from a bit of “Ponzi brain” here. If TranzactCard’s returns are calculated annually and aren’t too outrageous, they could be legitimately generated.
I feel there needs to be regulatory filings though, especially with TranzactCard marketing Power Save Account as a comparable bank account.
Paid fees are an elephant in the room. Especially the $495 TranzactCard affiliate fee. What on Earth is that going towards?
Could there be recycling of TranzactCard’s membership fees on the backend? Maybe. Consumers can’t make an educated due-diligence call because TranzactCard doesn’t provide audited financial reports.
Bottom line? I’m not 100% on TranzactCard committing securities fraud but I’m smelling smoke. And that smoke is thick given Smith’s past brushes with securities fraud.
The last thing I’ll finish on is TranzactCard’s own income examples.
As above, in TranzactCard’s own income examples, affiliates are losing money. The above example provides a $12,000 spend coming to $12 a month in commissions.
This same affiliate would need to generate $150,000 a month in spend just to break even.
I’m not saying it’s impossible but is it realistic for your average TranzactCard affiliate?
Approach with caution.