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I agree on all points except on the small paysites.
Most people who want to start a small paysite will not be able to afford the VISA/MC fees. And if you can't afford to pay those fees, then most likely you wil not be able to come out with a strong enough paysite.
What may happen though is that system like the one swoit has, will likely increase the number of paysite they have, therefore becoming somekind of avs system.
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