CC Processing for Canadians - Help Please!

I'm setting up a site and I'm faced with so many different options for payment processing. As a Canadian, I'm faced with many complexities (or, maybe it's not that complex, I'm hoping).

Ideally, I want to utilize CCBILL but I that means I'll have to setup a US Corporation and appoint a principle in the states in order to qualify to accept VISA. Here's where I'd like some advice:

- From what I understand, it's crucial to have VISA otherwise forget the site alltogether. Is this true?

- Canadian Based site operators: what are you doing to get around the issue of appointing principles to qualify for VISA? Have you incorporated in the states as an LLC? If so, which states would you advise?

- US Based operators: any ideas/suggestions would be great! What states do you recommend for an incorporation?

Thanks in advance, everyone :-)

Cheers,
Brian

Brian-

Ironically I wish we could process in CAD. I would say it's premature to say "If I can't accept VISA, there's no point in doing a site" - lots of sites are successful using other billing methods, such as for example 900, dialer (nocreditcard.com is excellent), Epassporte/Moneybookers, SMS. What you do need to consider is that even with VISA you're entering a super-crowded market - so I would say in some percentage at least that planning your entry (no pun) is at least as important as how you get paid for it. CC processing is probably the most treacherous method of all due to chargeback requirements as well as the foreign company issue.

I don't know if CCBill will set you up for 900 billing or not as a Canadian company but that's definitely a step in the right direction and they're quite easy to work with. Avoid IBill like the plague, ask anyone.

From what I have seen the states most companies choose in the US would be Nevada or Delaware - but that's primarily for tax reasons. An issue is you might end up facing double taxation by being incorporated in the US, you would need to talk to an attorney familiar with trade rules.

I do recall there was a firm processing in Canada for Canadians some months back, but can't remember their name. There's plenty of Canadians on this board who might be able to offer up some help, but I'll look around and try and track them down.

-doug

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Originally Posted by BrianDN

I'm setting up a site and I'm faced with so many different options for payment processing. As a Canadian, I'm faced with many complexities (or, maybe it's not that complex, I'm hoping).

Ideally, I want to utilize CCBILL but I that means I'll have to setup a US Corporation and appoint a principle in the states in order to qualify to accept VISA. Here's where I'd like some advice:

- From what I understand, it's crucial to have VISA otherwise forget the site alltogether. Is this true?

- Canadian Based site operators: what are you doing to get around the issue of appointing principles to qualify for VISA? Have you incorporated in the states as an LLC? If so, which states would you advise?

- US Based operators: any ideas/suggestions would be great! What states do you recommend for an incorporation?

Thanks in advance, everyone :-)

Cheers,
Brian

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Moneris or Monaris can't remember the spelling. They are processing adult and are canadian but you have to be able to pass their financial requirements.

There are many offshore processors which would do the trick if your not looking to use their affiliate programs.

That's the one :-) http://www.moneris.com/index.php

-doug

Setup a US company in Nevada and you're off to the races.

Moneris was processing, but a few months back I believe they stopped. Big Cock Society had been using them and suddenly found themselves without a processor. They did find alternate processing, but not in Canada.

I'm in Canada and essentially if you're in Canada at the moment you are fucked. You either need to set up a U.S. corp or set up an off-shore company with Gibraltar or Singapore or something like that. Deleware is apparently a good place to set up your U.S. corp, and I believe it has to be a physical address and not just a mail drop box.

You're other option as a Canadian is not to run a paysite, but instead run AVS/AEN sites, set up theatres with other systems that process and provide the content, and run link lists and TGPs and send your traffic to other sponsors. This leaves you in a precarious position because if the U.S. government or VISA changes the requirements as to not allow U.S. companies to send cheques to Canada, you're screwed. But that's unlikely unless someone else flies a plane into a building and it's discovered they came from Canada.

If any processor yes they can process for you and don't require a U.S. corporation, I'd be highly suspect and investigate it thoroughly. Chances are really good they'd be lying to you. Believe me, I've been looking for a Canadian alternative for over two years, if one existed I'd have found it by now, I'm a tenacious bugger.

Cheers
Dzinerbear

visa is 75% of our sales, so i'd say ya gotta have it. my partner is canadian, and when he set up his llc corporation in nevada using incorporate.com, it came with a resident agent. there are states where the taxes are cheaper, but nevada is also fairly porn friendly.

Ok. Canada is not porn friendly. ?

Why is it so difficult to find a credit card processor in Canada?

Steve

Two reasons: no bank in Canada wants to process for porn, and there are only 5 or 6 major banks; and, after 9/11, I think the Patriot Act had an effect on the residency requirements of people wanting to use American processing companies.

Cheers,
Dzinerbear

Hmmm that is interesting. That could mean that more competition in the banking industry would create a market for adult business. And naturally I would bet that the North American Free Trade Agreement excluded banks.

The economics major in me has always keeps me looking at how more "marginal" businesses like say adult entertainment, or gambling, fit into market economies.

Steve

Hey Guys,

You're comments have been very useful--Great Thread! Keep 'em coming of you've got more!!!

Doug - Thanks for the tips. I believe (from what I remember after speaking with CCBILL) that I can accept everything but VISA until all that other stuff is in place.

Dzinerbear - I'll check out Moneris and see what's up with them, but otherwise it seems like my only option would be to setup shop in Nevada (which is where I was pretty much headed).

Basschick - I'll totally check out incorporate.com and that resident service. So, basically their service was good enough for CCBILL and VISA to get visa acceptance going? If you could put me in touch with your partner, I'd love to chat with him about that further.

For anyone that's interested - There is one other company in Canada called Internet Secure and they handle online subscription-type transactions, but of course they're shy of 'porn' and adult related material.
http://www.internetsecure.com/

Cheers,
Brian

Hmm, actually Michael I'll disagree slightly with the 'banks up here don't want to do adult'. I have talked with my TD bank manager as well as with a VISA rep from TD in Vancouver and they claim that many banks here are under the gun from US banking interests, specifically VISA USA who want to handle Canadaian VISA under the VISA USA rather than VISA INTERNATIONAL designation.

Most Cdn banks don't want that change and so the battle. In addition due to our more stringent 'reserve' regulations on banks, they are more cautious on who they authorize for merchant accounts due to chargebacks and such. ANother reason US banks are trying to put the squeeze on our system, as they find it too hard to get into our business due to those regulations.

Basically as the TD folks explained, Canada is caught in no man's land. European centres think or assume we are shortly to be swallowed up the USA banking system so avoid us, USA banks want us to unite with them and not be separate so this results in our businesses getting the squeeze.

From what I have been told, the real root of all this is the pressure being exerted by VISA USA.

Anyhow, it makes for a tough chore to do online business but more and more European firms are looking to set up a presence here. I mean our economy is one of the more vibrant ones, and growth is expected to continue, so who knows what the future holds in this area. I sure hope it improves though.

In the meantime I find the 'paypal' type of adult solution the best for my needs, such as myvirtualcard and moneybookers.

Ian

Hey Dzinerbear, I forgot to mention:

suppose that scenario were to play out (where US companies were not allowed to mail checks to Canadians), I would imagine the most ideal solution would be to setup a bank account in the states and have funds wired directly into that account rather than having them sent as checks.

That strikes me as the simplest way to go about solving that problem, should it ever arise.

Brian

Brian,

If you decide to set up a US corporation Nevada may be your best choice. Nevada has not personal income tax and no corporate tax. Easy to set up online using any number of Registered Agents who advertise online.

Delaware, on the other hand really isn't such a good place to set up a US Corporation unless you want protections from being sued by shareholders or consumers. Delaware is very protective of the coporations incorporated their in the event of civil lawsuits which is why so many companies are incorporated there. Delaware has what is called a "gross receipts tax" which can be rather onerous.

In either state you do not need to have a physical prescense, just obtain a resident agent.

Bill

I would very highly suggest setting up an EU corporation in a tax haven like gibraltar, seychelles or virgin islands, then setting up billing with CCBill EU. The total cost of this is way less than doing a US company since you also don't have to pay the $750 visa rego fee (total cost is only about 500 pounds), plus who knows what will happen with a US-based company when things like 2257 gets tightened or when Bush decides to run an anti-tax campaign on all porn related companies. Honestly, stay the hell out of the USA!!!

cheers,
Luke

If you are going to incorporate, I would take Luke's Advice. If you want to process Visa with in the next 48 hours, contact me 202740086. You are correct that if you don't have VISA, you are cutting the potential revenue. From studies VISA is 70% of all credit card tansactions..

OK...I have to chime in here. People keep saying VISA is 70% of sales. The problem with that is, it's a self-fulfilling prophecy. It is true all of us would be in serious trouble without CC processing - but it also true that all this means is to really think outside of the box is imperative because you're putting 70% of your eggs in a basket which is being held over a cliff.

Why do surfers choose creditcard? It's simple - it's status quo. The trick is to change the surfer's behavior so that it isn't status quo IMO. Ideally, your revenue would never be 70% dependent on any one source - no business in mainstream operates that way (I hope). It's not sound business practice unless that 70% is in gold bars. Remember, people, the entire US economy has collapsed or near collapsed several times in the past - and that should be far more sound than any creditcard.

There are also serious issues with creditcard which IMO are not being seriously addressed - and could easily be. Your whole business plan depends on minimizing what is mostly friendly fraud with CC - yet the security systems for over half of the world (AVS, for example) are either underdeveloped or non-existent. CVV2 is the worst example of real fraud defence that makes absolutely no sense - obviously if someone stole your card, "card present" is hardly a good measure of whether it's stolen. It's like cops stopping car thieves and letting them go because they have the car.

I rant here because I feel the adult industry is in part responsible for the serious questions surrounding CC today. Not because of fraud, not because of webmaster verification - because it is the accepted norm that we cannot operate without them. It's detente with no missiles.

I've raised this challenge before on GFY and other boards - and will raise it again. Why can't America catch up to most of the Western world? Debit processing is real in the UK, Germany, Belgium, Austria, Switzerland in most cases - why not here? Do we not have businesspeople in any industry with the technical expertise, financial backing, and general wherewithall to get this done? The adult industry is billions of dollars - yet we can't help the country catch up with systems that put the US on par with Europe? (I volunteer 40 hours of PHP programming for anyone legitimately doing this)

SMS billing. Why not here? Why do Americans have to call it "texting" instead of the simpler and clearer "SMS"? Why is our cellular phone system in such a mess that LNP barely operates, much less consistent billing practices for all providers that let people buy adult through SMS? Do the SMS providers really not *want* any revenue from adult - or is it the morality of an intrusive government causing this? It's perfectly fine for me to send twenty SMS's to vote for Nadia Turner on American Idol but not one to get a pint-sized pic of a naked person?

There are at least five or six ways to make a dime in this industry that do not require credit cards. It involves selling the consumer in some cases, to be sure - but isn't that what we do? And realistically speaking, based on my analysis, most of those ways mean counting on America for revenue is a serious misjudgment of business, since in terms of simple economics in the online world we're hardly first-world.

-doug

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Originally Posted by crescentx

OK...I have to chime in here. People keep saying VISA is 70% of sales. The problem with that is, it's a self-fulfilling prophecy. It is true all of us would be in serious trouble without CC processing - but it also true that all this means is to really think outside of the box is imperative because you're putting 70% of your eggs in a basket which is being held over a cliff.

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Doug.. you didn't read the sentence... VISA is 70% of credit card transactions and it isn't the webmasters responsibility to make sure the choose one over the other... since this is an internet industry the only thing you can do is offer options. A few bad apples can spoil the bunch and that is what happened in the past with adult and online transactions.... but the credit card is 70% because of rebills and that is where most people are looing to make thier money.

I agree with your rant, and believe in the same thoughts you have. Regardless of the word 'texting' it takes america a lot longer to adjust because the cellular systems here are on completely different systems where are the carriers overseas utilize the best of one technology (better than the US). We do offer SMS billing in the US, I have a product now that is working quite well...


In any case you bring up very valid points and are ahead of the curve when it comes to understanding the billing methods and needs to carry this industry on to the next generation. Which, btw, will be fund loaded, pre-paid cards, SMS and anything other than VISA or MAstercard.

Cheers!

doug, i have 2 visa cards plus 1 virtual visa account, and 0 mastercards.... mastercard is not popular here in Australia and it is not popular in a lot of other places around the world.

If i were to go to your site and see you did not offer visa, then I would be off to one of the other 100,000 or so paysites I could join...simple as that!

cheers,
Luke

What I meant was creditcard in general...be it VISA, MC, Discover, JCB, Amex...

-doug

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Originally Posted by Chilihost

doug, i have 2 visa cards plus 1 virtual visa account, and 0 mastercards.... mastercard is not popular here in Australia and it is not popular in a lot of other places around the world.

If i were to go to your site and see you did not offer visa, then I would be off to one of the other 100,000 or so paysites I could join...simple as that!

cheers,
Luke

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Quote:

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Why do surfers choose creditcard? It's simple - it's status quo.

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my point was just that if its not simple to join a site, surfers will very very quickly go to the next site where it is simple to join.

cheers,
Luke

Not if you give them a good enough reason not too...its all marketing.

-doug

Quote:

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Originally Posted by Chilihost

my point was just that if its not simple to join a site, surfers will very very quickly go to the next site where it is simple to join.

cheers,
Luke

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Hey everyone... once again, the feedback here's been awesome. Thanks.

Luke (Chillihost), you mentioned EU incorporations for only about 500 pounds:

- can you let me know who'll do it for 500 pounds?
- does that price include the resident agent service?

Cheers,
Brian