As most of us know we can set our clock to the VISA new rules department - every 6 months new rules... so from October 1, 2003 chargeback to sales ratio must not be more than 1% (current it is 2.5%).

Atleast we got some warning this time (3 months to get chargebacks down to under 1%) - thanks to the brave souls who gave us this information.

use checks more

FYI the FED is looking at putting return thresholds on ACH transactions

Clay

Yeah, what Spanno said! :okthumb:

In fact, for all you payites that do not process with us, here's a deal you cannot refuse:

FREE Check processing for 30 days!

FREE real-time verification via StarCheck (where possible).

Processing fees charged on CLEARED checks only!

Full blown, in-house collections department.

Canadian ACH!

There is NO other ACH Processor that can beat this!

FYI the FED is looking at putting return thresholds on ACH transactions

Clay[/b][/quote]
what sort of time period could that happen over?

Is this the final nail in the coffin?

The 1% is almost impossible to get to, especially when they can reclassify credits as chargebacks as well.

VISA is putting the issue on us, but it is their policies that help create the
situation. Though we all know many in this industry who have been raping surfers for years....

Now is our chance to get more focus on "good" transactions... meaning something, which are less likely to chargeback.

We also have the chance to get more billing options on our sites - ex. US online checks, and local european options.

More "scrubbing" onces people have signed up - done by the paysite itself.

Of course there are alot we can do, which will help bring the chargebacks down, but what I´m a bit worried about is what kind of effect this will have on processors, and some of the large pay per signup programs, which are playing the number game (cheap trial, high recurring, multiple cross sell, and high payout to webmasters).

Visa does not have a credits policy like Mastercard does. However, what they are asking for is a veritable impossibility for high volume accounts under the current structure. I doubt that Visa would consider instituting the credits policy until they see the outcome of the Paycom/Mastercard suit if they are even considering such a thing.

Wig and I were talking about this the other day - you have your ear to the ground more than most of us regarding CC processing - is this a case that will reach a resolution ANY time soon?

Oh, and in case anyone missed it - Wig's offered a GREAT sale on ACH processing!!! :gbounce:

From mainstream to adult there have been problesm created for VISA/MC from the internet. Of course VISA/MC creates many of their own and often makes those very same problems created by net companies even worse.

Peaches, I guess it sounds too good to be true.... but it is!

This is the problem with checks.... everyone is so focused on their credit card processing they don't take the time to understand checks and maximize them.

but, if there are any ears out there that want to know.... Fire away!

Gosh, makes you wonder if that's why one of the largest paysite operators has been moving more and more over to checks in the past few months....good luck or good planning? B)

Wig, we could probably use a good tutorial on check processing. How it can be more effective then credit cards and such.

Maybe come up with a list of common misconceptions about checks, some FAQs, etc....

I know I would like to know more, and would like to stop getting my balls squeezed by the CC companies... but I know checks have some issues as well.

Every form of one entity getting money from another has issues - just look at Serge getting the $1000 check from Lensman. :awinky:

But IMHO, it very well may get to the point where ACH is the only game in town for a lot of webmasters. Heck, even 5% of something is better than 0% of nothing! :P And if there's a deal being offered, might as well take advantage of it before the inevitable happens.

I'm sure Wig will mosey on back and give you tutorials, answers, etc - he frightens me with how much he knows about it. I just felt the need to point out the obvious, hehehe (it's been raining all day and I've been cooped up - bear with me :agrin: ).

Wig,

sent you a PM.

New question- how would you set up a Payperview system with check processing? If it takes days to get funds it doesn't seem feasible.

Wow - more shit hits the fan... All I can say is US traffic goes to checks and recurring web900 and all international traffic goes to dialers. In fact of these payment solutions may revenue may excede credit card usage as a whole.

All I know is I will not be held hostage by the largest monopoly and abuse of power in the nation today.

They keep their current management style up and they will will really see they do NOT control all the flow of money. :)

Members values dropping by more than half in the last 2-3 years, stricter rules with HUGE fines for credit card processing and many other factors will force a tidal wave change in this business VERY soon!

Every system has its inherent problems, there is no doubt about that

mof's made a good point -- there are some things that the risk level for using a check becomes an unacceptable one. Reseller fraud with checks is hideous compared to cc's.

If the Fed institutes their limits on what is allowable with returns and other check issues then it's going to be even tighter.

Dialers, sms, alternate billing methods are great for certain traffic but not for others.

One thing I do see is the penalty for credits situation, where they are treated as chargebacks, has to be stopped, whether it's the Paycom suit, someone else's suit or the FTC/state AGs stepping in and investigating it. The biggest point of a credit is that it is designed to reduce the load on the system -- there are no cb processing costs, etc. To utilize it in a manner that assesses punitive damage to a merchant is not something I think to be legal.

Mike,

ACH is limited by the return window, which is usually 2 business days. We can originate late in the evening, same day and get returns in at each Fed window. These returns are not charge-backs, but rather what we call administrative returns such as NSF, invalid account, closed account, etc...

The ACH system is designed that all transactions are considered good until they are returned. In other words, there is no authorization or positive code returned.

So, that leaves us where Mof is heading.... how do you verify in a real-time manner or otherwise reduce returns. We use StarCheck on all our transactions (free for our managed adult clients) and for about 30% of the DDA accounts it works well. There are also MOD calculations and other ABA to account number nomenclature / structure that can be applied.

The banking system is not standardized and there are 1000's of banks and credit unions that all do shit differently. It takes a while to build a database that can address all the subtleties of ACH and it never ends.

As you know, we only charge on settled checks and there are no return fees or fines or other fees whatsoever. Makes it pretty attractive.

Bottom line is that you make money with checks, despite the cons.

Wig,

sent you a PM.

New question- how would you set up a Payperview system with check processing? If it takes days to get funds it doesn't seem feasible.[/b][/quote]
Mof, I did not get your PM, but maybe I just don't know where to look. feel free to email me danp AT achdebit.com

To better answer your question.... I'm sure that even with credit cards, there is only so high a limit that a guy can go in a given time frame. As he demonstrates an ability to pay, you allow him more purchasing power (and you more risk).

With checks, there is limited real-time verification, but you perform it. You also perform a consumer profiling system like Experian. Then you have to dial down the limits to an acceptable risk (risk being 2-3 BUSINESS days) and run.

If that is too loose for you, there is also an almost foolproof way of account verification, but you sacrifice the impulse purchase. This is a microdeposit (like what you go thru to open your paypal account). You can ACH credit the consumers account with, say, 12 cents and 23 cents and the consumer would have to confirm this "combination" prior to the purchase of any time and initiation of any debit.

The thing to remember about checks is that people use checks because they don't have credit cards NOT because they prefer to use checks! There are an estimated 100 million checking account holders that do not have a major credit card.

Also, performing StarCheck, Experian or using and ACH credit for verification is a one-time event for your customer. After the first check, it is up to you to tell me how much to debit and how many times based on your risk parameters. ;-)

what a fucking joke!
visa are cunts, and like marc de said, if they keep going they are going to realize they aren't the be all and end all of the ecommerce business.

if i owned american express, i'd be jumping in with a HUGE web processing campaign and pick up all those customers that visa is losing ... marc de, can you buy american express or something similar? thanks :biglaugh:

we had a customer the other day who emails us and does the usual 'i never signed up to this' blah blah ... we responded with his sign up info, ip address etc ... he responds with 'who cares if you have that info, all i have to do is ring up my bank and they'll give me my money back'. his attitude pissed me off, so we signed him up to a bunch of porn spam ... scary part is we knew he was right, nothing we could do despite the fact that the moron admitted to fraud right there in the email ...

oh well, here we go again ... another round of big programs is about to either a) disappear or b ) change their payout structure

Peaches, thanks for the kind words. :D

I stepped over to the barn to feed. The rain sucks and it does not look good for the 4th either. ;-(

The whole problem is that they DON'T WANT US. We represent such a small amount of their revenue, but a HUGE amount of their customer service. :(


ALSO remember that if someone has a credit card, the odds that they have a checking account is huge. If you offer up the ACH option first, you get them THERE w/o offering the CC option right off the bat.

If I had a few paysites, which I don't :angry: , I'd run a test for at least a month and offer JUST ACH billing on one and see what the results were. I'm not saying that because I KNOW what the results would be, because I don't, but since we seem to be headed there, I'd like to play with my options beforehand.


Yeah, my rain gage was at 4 inches from last night when I had to DRAG the dogs out and retie the tomato plants. :( But we're STILL not getting it as bad at Atlanta's been for the summer.

Oh - did you get your garage door opener? :zoinks:



Last edited by Peaches at Jul 1 2003, 09:34 PM

The only problem with this is that we live in a credit driven world and credit cards are credit. It is easy to say, oh, i'll just pay the monthly payment.

ACH is direct debit.... cash, baby!

Also, credit card = world wide. ACH = US


I did get the door opener. Thanks and thanks for feeding the muts!

:biglaugh:

Did you ride the mule yet today?!
:P

Visa might not want us, master card might not want us, but their customers do ... there are many people who have credit cards PURELY for buying things online ... there is a HUGE chunk of business up for grabs here, and although we may be just a small drop in the ocean of ecommerce, our industry is big enough (not just porn, all high risk online business like casino's, subscription magazines etc) to warrant a decent billing solution from a major credit card company.


And lets not forget, the only reason we have this problem is that the cc companies ALLOW & ENCOURAGE their customers to commit fraudulent transactions ... the whole thing is a trap, we must have less than 1% chargeback ratios and yet the credit card companies are encouraging people to chargeback and refund any transactions they dont want to pay for.

What's happening with the paycom/mastercard lawsuit? that's the key to our protection, but i'm nervous that its not going to achieve anything except make the general public hate pornographers even more.


I keep hearing that our industry is too small for the big cc companies to care about, and yet a few weeks ago there was a thread here saying that adult internet does in the billions in revenue each year ... i think its a farce, visa probably owns a few porn sites and doesn't want competition
:biglaugh:

I think the cc's would love to have the money but they succumb to the politics like everyone else....

I think that Visa/MC should issue a special high risk credit card to people that request it.... Only for online purchases... Maybe a max limit of $500 or $1000... a secure gateway with purchase confirmation via email... Once it is confirmed, it is a done deal, no charging back....

The email confirm would go to the email address that you gave them when you applied for the card.... No free email accounts, that sort of thing...

A "Safe" transaction.....

Why dont all webmasters get together and simultaneously drop VISA/MC and run dialers/checks only.
Short term it may suck, but it will stick it up VISA/MC......and I bet we'll see a more accomodating attitude in the future....and a reversal in chargeback policies.
Run a campaign on the boards

and i guess you're willing to forgo millions of dollars in rebills?

you first ... the rest of us will follow, promise!

That and having the FTC up your ass over the dialers...

Unit (thanx for changing the avatar btw, the other one was spooky) the dialer solution for domestic U.S. is often frowned upon by the authorities here, so that essentially leaves the U.S. webmaster with only the check solution....

Plus, bringing ALL the sheep into the fold would be nigh on near impossible...

I have a solution mapped out that I have talked to a few people about... But to implement it would take someone with a lotta lotta pipes and a lot of clout with Visa/MC... Thought I had a taker with my old company but they lost their clout with the cc's when a certain company got taken out by the FTC.... I have neither the pipes or the clout or the wherewithall to market the idea effectively myself, so it will sit on the shelf for now ...

If EVERY high risk transaction merchant took a day off from accepting cards, I don't think the cc's would miss it.

They might even like it so much they took their own time out.

There's good that can come of this for companies that are positioned to take advantage of what happens.

I'd imagine the industry leaders like ARS, CEN, or anyone doing over 1000 signups a day can think this through and realize it could become an opportunity to stay on top.

The smaller guys doing a couple hundred joins a day might want to worry though.

KK, I think its the other way around, although you are the expert ;-)

The way I see it, the bigger companies are going to be hit much harder by this, and unless they *really* have their shit together, its :bwave: ... smaller companies with less volume can change their entire business model overnight, without losing all of their webmasters & signups ...

but i'm just guessing ... i have nfc anymore LOL

The weak shall perish, the strong shall survive.

Don't talk of boycott, talk of innovation.

Wtf happ. to our industry. used to have new ideas and products out all the time.

We got lazy :(

We got saturated... too many next best things going around to bother with new innovations... ;-(

True, very true Timon.....

I'm not the expert cj, but I do know this -- the guys doing a couple hundred joins a day for the most part are NOT capable of running a business doing a couple thousand joins a day.

The ones doing a couple thousand a day have already been through so much, they adapt and survive, that's why they do so many signups.

I don't see signups going away, that makes no sense at all.

What I do see is some major changing in the way certain parts of this business are worked.

I imagine a couple of people will get out -- just take what they have and leave the business, retire. I imagine a couple of more will ride it as long as they can and then bail when the fines become too much to handle or the constant battle to find new merch accts is finally lost to them.

I have a good inkling of what MIGHT come... the way I see it there are two basic options, and it creates a market that has a lot of similarities to Nash's game theory and how parts will react with each other.

hey... I came in late on this one.... the question I have is this:
will the penalty for chargebacks over 1% be fines or termination?
D

Those may end up being the options....and if so, we are doomed for sure...cuz getting this group to do what's in the best interest of each other AND the group is about as likely as JR and Forest having the same IQ...

Jim,

I love the sig :)

KK i was reading your threads on GFY and i am one of the few that appreciates the fact that you take the time to share your knowledge - even when it means doing so with so many 14yr old buffoons that can't spell "credit card" much less understand the issues at hand.

i have seen now, many referreces to Verified By Visa . i keep seeing remarks that its a good thing... followed by remarks like "yeah, but they dont support recurring billing" or "unless you are ready to give up recurring billing...."

Does this work well for any business model that is not dependent on recurring billing?

Can users charge these transactions back? or not?

i was reading at Epoch and the Visa site and it seems that almost anyone in the US with a visa card should be able to go to that site, create an username and password and join a site.

am i missing something? or is there some other catch?