KK, what's the story on Visa in January?

[RedEye]

Originally posted by Rolo@Dec 6 2003, 09:38 AM
Good posts RedEye

One thing we need to remember when talking about processing is that "EVERYONE is here for the money" - only politicians can fuck with that simple rule.

VISA/MC has no real problem with adult - only times they get mad are:

- when it costs them money
- when their brand is getting bad publicity

VISA/MC do not like 3rd party billers, because it can cost them money, and because they have no control over their brands.

Recurring billing will not go away from the adult industry as long as VISA/MC makes money on it. VISA/MC will (and have) changed "the who and how" behind recurring billing, and it will lead to less people being in the business.

Let me explain.

The processing in the world slowly but seriously moves towards a new protocol of acquiring transactions. The protocol is called 3D Secure.

Basicly as I understand it it's the same as Verify By Visa with the exception that the password for internet purchases by customer is being kept by the customer's bank.

All banks are recommended to support it.

I'll explain.

For example Your bank is Barclays Bank and You have a credit card of that bank. Now Barclays is supposed to contact You and offer You to input a special password for internet purchases on their website. The password is being kept only at their site.

At the time You attempt a purchase in the system which is connected through 3D Secure You will be required to enter the password and it will be matched directly with Your bank.

Therefore it is very difficult to fraud with this protocol because basicly in the majority of cases one would need to hack banks websites to get passwords.

Then the so-called "liability shift" occures. If later You attempt to make a chargeback more than half attempts will be declined and the merchant and the acquirer, and the PSP of course, are no longer liable for chargebacks. To be exact if You say "It was not me" the bank will no longer approve the chargeback.

The most interesting thing is what happens if Your bank does not support 3D Secure but the transaction went through that protocol. I.E. If the PSP has 3D Secure but Your bank doesnt the PSP will still make the transaction the old way but the shift occures anyway and the merchant if he is connected through such PSP is not liable for chargebacks. Why? Because generally it costs 20-30K $ and a couple of monthes for a bank to install 3D Secure and everyone was supposed to do it a year ago, so technically they are reliable for not supporting it.

However, just as with Verify by Visa these protocols seem not to support recurring charges at this time , at least not from the side of processor or PSP. The acquirer MIGHT have a difficult possibility to run recurring payments with 3D Secure but as of yet it's a rumour.

Although 3D Secure is quite new, so not too much is known about it.