Is online credit card processing going through changes?

[tombarr]

Over the last few months several signs have started showing that to me indicate that a possible shift is going on in the world of online processing.

Some Banks are stopping service with epassporte because of lack of fraud controls.

Some Banks are stopping service with Western Union because of online fraud.

Conversions of adult traffic is tougher. This seems to be spread among several processors. More declines seem to be occuring when consumers attempt to register for website access... and some of them are just caught up in filters that should not be catching them... because of their IP block, or country, or just demographic fraud probabilities...

Some processors are now saying that some credit card organizations are now requiring membership sites to notify customers that if they click on a link that leads outside the website, that the customer has to be presented with a prompt box telling him he is leaving the membership website, and it must specify that the customer is leaving the site and the url it will be going to.

Is online processing going through changes, mandated by big brother banks and credit card organizations?

I know many of you will always say conversions are good in public forums, but having sampled several different websites with friends in various parts of the industry across multiple niches, product sites, and even things like AEN's and PPS Sponsors, they all seem to be seeing the same things.. an overall tightening...

Is there a tightening going on?

Are new credit card regulations likely from the credit card organizations to make it harder to do business in adult online transactions?

[Corey Bryant]

Every April (and October sometimes), Visa comes out with new rules / regulations (and re-interpretations of previous rules / regulations). It's one of the reasons Visa payments were knocked out in Europe last week. They uploaded some code changes a day early.

I doubt anything drastic will change, it is just probably more noticeable in these months.

[Lee]

Every April (and October sometimes), Visa comes out with new rules / regulations (and re-interpretations of previous rules / regulations). It's one of the reasons Visa payments were knocked out in Europe last week. They uploaded some code changes a day early.

I doubt anything drastic will change, it is just probably more noticeable in these months.

Speaking of which, has anybody (other than a IPSP employee) actually seen a copy of the Visa regulations?

Im suprised they havent been floated around the web but so far it seems they are about as easy to find as Jimmy Hoffers shallow grave.

Regards,

Lee

[Corey Bryant]

Are you looking for the Visa USA Operating Regulations?

[tombarr]

Don't think it would ever happen but it would be nice if an IPSP rep could come on here and talk about new VISA changes....

[sperbonzo]

Actually, the full VISA regs are about the size of a set of encyclopedia and are only available fully to association (bank) members. IPSPs do NOT have access to a full set of VISA regs. The banks do not release these.

The merchant operating regs in that link are not even CLOSE to the full regs.

Western union and some of the online debit card/stored value products are having problems due to their use in online casino gaming funding, which in turn is providing avenues for potential terrorist funding.

Blacklists for customers that have charged back in the past have been growing and consolidating amongst processors, so more of them get screened out.

The "tightening" has been going on for a long time. The credit card fraud that was created by the biggest merchants in the adult biz, especially in the early days, has forced the "big brother" banks and credit card associations to do the things they've done, and events since 9/11 have affected EVERY method of electronic funds transfer in the world.

[bearfilms]

For what it is worth, I am hearing that WoodForest Bank, one of the few banks to actually write direct merchant accounts to Adult businesses, is discontinuing some accounts with adult merchants and possibly looking to get out of the adult merchant game altogether.

[gaybucks_chip]

My understanding is that Visa limits the amount of adult (by dollar volume and/or by number of merchants) that any given bank can have, it's a percentage of their overall portfolio. So, for example, if Woodforest has a bunch of adult merchants whose processing is growing, they may not be able to take on any new adult merchants until they gain a proportionate share of non-high risk business. That isn't saying that Woodforest is or is not dropping adult, but I do know that a number of banks have stopped taking new adult merchants for x amount of time, then been willing to take more on later when they either acquired another bank or increased their overall merchant processing volume.

[EmporerEJ]

Every time I hear about the new permutations of the current credit card processing crisis, I hear a loop in my head playing the message I heard almost 10 years ago.....to put the adult industry out of business, we need to cut out it's ability to process credit cards.

If there is a "master Plan" somewhere, that's it.

[gaybucks_chip]

I think the worst that will happen is Visa will stop processing for online porn in the US (under pressure from the loser republicans)

But porn isn't going to go away, and the porn industry is remarkably adaptive, so online adult content will continue, and payments will just shift, either to non-US entities, or processing by Mastercard or Discover or JCB, or through payment in pork belly futures, or some other means of cosideration.

Where there's demand, people figure out ways to fulfill it. Consider prostitution, drug trafficking, gambling, etc. In spite of the government's best efforts, there's never been any meaningful control of any of those.

[Cruisemaster]

Something I've never understood is why, in an industry that appears to be flush with rich cats who have access to a good deal of cash, why on why we rely on these small banks to keep this crucial element of our businesses afloat? Why haven't some of the bigger players in the adult industry created a legit bank or bought an existing one so that it at least becomes very adult friendly?

Keith

[tombarr]

You still gotta process through Visa and Mastercard and the Federal Reserve system even if you own the bank if it is on US Soil.

Something I've never understood is why, in an industry that appears to be flush with rich cats who have access to a good deal of cash, why on why we rely on these small banks to keep this crucial element of our businesses afloat? Why haven't some of the bigger players in the adult industry created a legit bank or bought an existing one so that it at least becomes very adult friendly?

Keith

[gaybucks_chip]

Tom's right. A group could buy a bank and make it adult-friendly, but the bank would still be subject to Visa regulations and the ratios of "high risk" to regular business in their merchant division. It's a great idea but wouldn't solve the problems unless it already had a gigantic portfolio of nonadult business.