So, the same thing could happen to an IPSP?
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True, but for some really *huge* programs, using affiliates and paying them on results is cheaper than paying in-house staff (who must be paid whether they get results or not).Originally posted by XYCash
That's if there's still affiliate programs after this. In light of this news it's a serious cost consideration for any sponsor to move away from promoting their sites using affiliates to buying traffic and marketing their own sites.
There will still be affiliate programs - just not as many.
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Anyone with a merchant account that falls into a specified list of circumstances can get into trouble quickly and deeply.Originally posted by <IMX>
So, the same thing could happen to an IPSP?
Remember that when Visa/MC has a fine or a cb for you, they don't tell you first so you can clean out the bank account. They take the money and then you wake up and find it gone. Then they tell you what they took it for after the factComment
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For the ones who do still have affiliate programs, you'll probably see a much bigger push for the affiliates to use sponsor-made galleries and sponsor-made free sites.
That way they can control what the surfer is being told and have less chance of a surfer seeing "watch this babe fuck 5 guys *live*" and charging back when he gets inside the member's area and that girl isn't even in the site.Comment
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Ouch.Originally posted by Kimmykim
Remember that when Visa/MC has a fine or a cb for you, they don't tell you first so you can clean out the bank account. They take the money and then you wake up and find it gone. Then they tell you what they took it for after the fact
I thought they actually sent you something like an invoice telling you you'd been fined and you had to pay $XXXX immediately upon receipt.
Waking up and finding it gone... fuckin' nasty. Ouch.Comment
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I am not so sure this is the case Carrie -- if you think about it -- sponsors are paying out ahead of the cycle of collections. They are paying more for client acquisitions on a per client basis than they can possibly recoup if you isolate individual transactions and call them acquisitions. They have to pay support staffs, admin staffs, do more than vigilant watch for fraud on the part of both the surfers and the resellers and they absorb shrinkage like a convenience store does with the shrinkage that goes on.Originally posted by Carrie
True, but for some really *huge* programs, using affiliates and paying them on results is cheaper than paying in-house staff (who must be paid whether they get results or not).
There will still be affiliate programs - just not as many.
And all of the above happens before you even start to factor in content, hosting, and other regular business expenses that are unavoidable.
I don't think affiliate programs are going to be gone but I think that pay per minute billing using Visa is done in the way it is worked now. I simply don't see how that segment can possibly get under the 1%.Comment
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Maybe a stupid question, but how is that 1% measured? I saw KK posted it how it was measured, but I mean
When you have 11 months CB rato of 0.5% and one month suddenly 3%, will you be fined as well?
Thnx
AndreQuestions?
ICQ: 125184542Comment
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Hi Kimmy
Thanks for all the answers so far. I have a question, from what I've understood from this thread is that the large programs (i.e. 750 daily joins or more?) have a lot of CB's coming from affiliates through the shady promotion strategies some of them have adapted. Do you think that the comments that have been made about programs taking their marketing inhouse are likely to occur?
Will afilliates be cut out of the loop or is that an unlikely doom-scenario?Comment
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That is the real problem. I totally agree.Originally posted by Probono
When Paypal stopped accepting adult they did not just ban the problem accounts, they banned ALL adult.
We had almost no Paypal chargebacks in many many thousands of transactions but we went out with the entire group.
Even if your own chargebacks are under 1 percent, it won't help very much if your third party processor is still over 1 percent and gets fined to death.
Either going out of business or cutting off adult entirely.Last edited by thetrog; 07-02-2003, 03:59 AM.Comment
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It's probably because you always defend Epoch or speak for them.Originally posted by Kimmykim
I don't know why you people are so hell bent on making me an Epoch employee when I'm not. Or an Epoch consultant when I'm not.
The confusion is understandable, even if it's not entirely correct.Last edited by thetrog; 07-02-2003, 03:50 AM.Comment
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Originally posted by Kimmykim
The sad fact is that without a signature you can't stop a chargeback, unless you could get an ISP to document the users IP address as being issued to that account at that time on the day in question. Not something that would happen without a court order in most cases and that makes the cost of doing such way more prohibitive than the cost of a chargeback.
I know this
, I wasn't suggesting it was a way stopping any chargebacks that are initiated, just a way of perhaps putting a few off making the claim in the first place.
I really think IPSP's are going to have to start thinking like this, prevention as well as cure. So far very few IPSP's have been to proactive in this until after the VISA/MC event. Presumably to much money at stake to upset the apple cart.In 1904, Charles Newman-Berry connected two abacus's together using specially enhanced GrapeVine thus inventing the first Internet connection.
NEWMAN-BERRY CASH
Paying webmaster since 1904Comment
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Very interesting.Originally posted by netbilling
We have hundreds of mainstream merchants who are well below 1%.
Chargebacks are rampant in the adult arena but not mainstream which is one reason we can setup a mainstram merchant with a merchant account and processing in about 24 hours on the average.
Mitch
So all of these arguments that adult is being treated unfairly may not, in fact, be true.Comment
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You need to understand though. A big reason chargebacks are rampant is that these guys quite often get found out by their wives, refuse to admit that they actually joined a sex site and the they proceed with the chargeback rather than a divorceOriginally posted by thetrog
Very interesting.
So all of these arguments that adult is being treated unfairly may not, in fact, be true.
There are also those who are fully aware they can get a month or two subscription and charge it back with no repercussions from VISA.
If there were a pincode system of sorts to go with a card (the CVV2 is useless since anyone can glance at the back of a card and get that number) - a system where the pincode is sent to the person seperately, just like they do when they issue you a pincode to get money out of the ATM - I think this would solve a lot of issues concerning chargebacks.
Then the person not only needs to steal your card, but he also needs to know the pincode in order to charge anything on the internet.
Another option is literally tying in the cardholders e-mail address with the credit card they are currently using, so even if the persons card is stolen any receipts for merchandise ordered on the internet would go to the cardholder making them aware of the situation.
But hell...this are just whispers in the wind Why change the system when they are making so much cash off of it?
XYCash Gay Affiliate Programs - Making Money For Webmasters Since 1999 - click here to sign upComment
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say you got your site.. some hacker just goes around attacking sites every day taking each one down for 12 hours.. in that 12 hours you could exceed your limit of charge backs for the month and be finedComment
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Lots of folks here seem to believe that this will affect the large PPS programs but because they are smaller they will be unaffected. IMO thats not exactly right. Here are some possible outcomes of 1% by VISA:
a) The processors have to balance the portfolio lower and the scrub is turned way up. Lower throughput will be seen by all site owners.
b) Many of the aggressive marketing tactics being used by the PPS programs spring entirely out of the need to continue to pay out $35-$42 a join. Without the upselling/crossselling etc that is needed to make the numbers right, payouts will be lowered.
c) The trickle down effect will be in play. Less money for the larger programs because they are throttled back by the processors or themselves in an effort to meet 1% will only mean less money paid to resellers, less money spent on content, less money available for marketing, etc etc. In the end, everyone will see an impact.
This is bad news folks, no matter how I look at this, I cannot see how a move to 1% by VISA will not be bad for everyone that makes a living in the adult market online.Last edited by scoreman; 07-02-2003, 06:34 AM.
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this sucks.. nothing anyone can do either.. if some one was to take them to court it would take to many months / years to even get a ruling.. and by that time shit will be fucked to hellComment
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the people who say that a clean ship means no chargebacks - and especially no refunds - has not a clue. consider two things:
on a slow day, it only takes a couple chargebacks to go over 1%. for a small site with say 6 sales a day, it only takes ONE to go over 1%.
lots of guys - especially in certain legal niches - lie about joining. we had a shemale paysite and 100% of the guys who refunded or charged back admitted to me when contacted that they not only joined the site - they liked it! they just didn't want their wives to know... could it hurt to put a notice on your customer support page that people who join the site and then pretend they didn't are committing fraud and will be prosecuted.
i have to admit it - i didn't finish reading all 5 pages of this thread... if these things were covered, sorry 'bout that!Got Gay and For Women Traffic?
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Yeah, about 10 people including me have said it, but I don't think it can be over statedOriginally posted by basschick
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i have to admit it - i didn't finish reading all 5 pages of this thread... if these things were covered, sorry 'bout that!
There are a lot more customers scamming pay sites out there than there are pay sites scamming customers.XYCash Gay Affiliate Programs - Making Money For Webmasters Since 1999 - click here to sign upComment
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KK, do you think this is going to hurt many low-volume sites?Comment
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The first set of rules last year with Visa asking everyone to register and monitored the charge back ratio of all its clients is what helped clean up the industry.Originally posted by Porn2Rock
This may piss some people off, but I actually like the fact that the credit card companies are cracking down.
Why?
Hopefully, it will drive some of the scammers out of the business.
If you run a legit paysite with a good members area, you have no reason to fear chargebacks.
Happy customers don't chargeback -- they renew!
This 1% new rule does not help clean up, this rule now will eliminate people that are clean and doing everything legit. If you do any considerable volume you are sure to be over 1% charge back ratio.
Of course if you do 20 trials a day you should be fine, shit you can put your own credit card in for $1 transactions 5 times and move your ratio down .5% half percent.Comment
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All 100% true.Originally posted by scoreman
Lots of folks here seem to believe that this will affect the large PPS programs but because they are smaller they will be unaffected. IMO thats not exactly right. Here are some possible outcomes of 1% by VISA:
a) The processors have to balance the portfolio lower and the scrub is turned way up. Lower throughput will be seen by all site owners.
b) Many of the aggressive marketing tactics being used by the PPS programs spring entirely out of the need to continue to pay out $35-$42 a join. Without the upselling/crossselling etc that is needed to make the numbers right, payouts will be lowered.
c) The trickle down effect will be in play. Less money for the larger programs because they are throttled back by the processors or themselves in an effort to meet 1% will only mean less money paid to resellers, less money spent on content, less money available for marketing, etc etc. In the end, everyone will see an impact.
This is bad news folks, no matter how I look at this, I cannot see how a move to 1% by VISA will not be bad for everyone that makes a living in the adult market online.Comment
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I understand that. But, most site billings don't show up as "porn" or whatever. They show up as some vague billing company name.Originally posted by XYCash
You need to understand though. A big reason chargebacks are rampant is that these guys quite often get found out by their wives, refuse to admit that they actually joined a sex site and the they proceed with the chargeback rather than a divorce
There are also those who are fully aware they can get a month or two subscription and charge it back with no repercussions from VISA.
So how does the wife find out in most cases? Couldn't the customer give some other excuse for the charge?
Unless it pay-per-view webcams or something like that, the average membership site charge is frequently not a big ticket item so, arguably, they could easily explain the charge some other way.
And it wouldn't matter much if the husband pays the bill instead of the wife, which probably happens a lot. In many cases, the wife may never even see the bill.
I agree that it is a problem, but my point is that it might not be as big of a problem as people say.
As for overall scamming with chargebacks, isn't that true with mainstream sites as well?Last edited by thetrog; 07-02-2003, 07:36 AM.Comment
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The majority of the chargebacks we get are reason given "to stop recurring billing"Originally posted by thetrog
I agree that it is a problem, but my point is that it might not be as big of a problem as people say.
As for overall scamming with chargebacks, isn't that true with mainstream sites as well?
We have an entire customers service section devoted to how to cancel your account.
Anyone sends an e-mail to us they get an auto reply which explains how to cancel their account.
Then if they send a second e-mail we tell them personally how to do it or cancel the sub for them.
They can also contact customer service by phone.
They are either scamming or too stupid to find food.XYCash Gay Affiliate Programs - Making Money For Webmasters Since 1999 - click here to sign upComment
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Originally posted by basschick
the people who say that a clean ship means no chargebacks - and especially no refunds - has not a clue. consider two things:
on a slow day, it only takes a couple chargebacks to go over 1%. for a small site with say 6 sales a day, it only takes ONE to go over 1%.
My understanding, and you could be right I could have 'not a clue', is that the whole point of registering is to allow inspections before any precipitous action is taken. In other words if you keep things under control, your not gonna be hammered for one day over the limit.
I read somewhere that upon exceeding your chargeback ratio, this is exactly what would happen, your site would be inspected, maybe monitored. This, obviously, is not info I got from VISA directly myself, just read it somewhere in a doc. So anyone feel free to shoot me down
Originally posted by basschick
could it hurt to put a notice on your customer support page that people who join the site and then pretend they didn't are committing fraud and will be prosecuted.
Copy the globill one, that rocks
In 1904, Charles Newman-Berry connected two abacus's together using specially enhanced GrapeVine thus inventing the first Internet connection.
NEWMAN-BERRY CASH
Paying webmaster since 1904Comment
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agreed...Originally posted by scoreman
Lots of folks here seem to believe that this will affect the large PPS programs but because they are smaller they will be unaffected. IMO thats not exactly right. Here are some possible outcomes of 1% by VISA:
a) The processors have to balance the portfolio lower and the scrub is turned way up. Lower throughput will be seen by all site owners.
b) Many of the aggressive marketing tactics being used by the PPS programs spring entirely out of the need to continue to pay out $35-$42 a join. Without the upselling/crossselling etc that is needed to make the numbers right, payouts will be lowered.
c) The trickle down effect will be in play. Less money for the larger programs because they are throttled back by the processors or themselves in an effort to meet 1% will only mean less money paid to resellers, less money spent on content, less money available for marketing, etc etc. In the end, everyone will see an impact.
This is bad news folks, no matter how I look at this, I cannot see how a move to 1% by VISA will not be bad for everyone that makes a living in the adult market online.please allow me to introduce myself, I'm a man of wealth and taste...I've been around for a long long year stolen many man's soul and faith...I was around when jesus christ had his moment of doubt and pain...made damn sure that pilate washed his hands and sealed his fate...pleased to meet you hope you guess my name...but's what's puzzling you is the nature of my game...Comment
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I agree with David (scoreman) pretty much point by point.Originally posted by Groove
KK, do you think this is going to hurt many low-volume sites?
My only other comment is that as with anything else in this business, some people will see opportunities and run with them, while others will think they are immune for one reason or another and fail to move forward.
The best thing I can think of is to suggest diversification. No matter how big or how small you are the best thing to do is spread your eggs over many baskets.Comment
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Well, that's interesting, since there's been much debate over whether recurring billing causes more chargebacks. Seems like your data confirms that it does.Originally posted by XYCash
The majority of the chargebacks we get are reason given "to stop recurring billing"
Maybe a lot of customers don't like to be rebilled, regardless of whether it's easy to cancel or not.Last edited by thetrog; 07-02-2003, 01:11 PM.Comment
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Isn't this what the "Verified By Visa" program is? You have to enter some password or something, right?Originally posted by XYCash
If there were a pincode system of sorts to go with a card (the CVV2 is useless since anyone can glance at the back of a card and get that number) - a system where the pincode is sent to the person seperately, just like they do when they issue you a pincode to get money out of the ATM - I think this would solve a lot of issues concerning chargebacks.Comment
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Yep, but we aren't going to be allowed to use it to combat chargebacks.Originally posted by Mr.Fiction
Isn't this what the "Verified By Visa" program is? You have to enter some password or something, right?Comment
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Assuming that huge sponsor programs decided they wanted to stop dealing with affiliates, but they don't want to lose huge traffic, what happens to the big free sites?Originally posted by Kimmykim
I am not so sure this is the case Carrie -- if you think about it -- sponsors are paying out ahead of the cycle of collections. They are paying more for client acquisitions on a per client basis than they can possibly recoup if you isolate individual transactions and call them acquisitions. They have to pay support staffs, admin staffs, do more than vigilant watch for fraud on the part of both the surfers and the resellers and they absorb shrinkage like a convenience store does with the shrinkage that goes on.
And all of the above happens before you even start to factor in content, hosting, and other regular business expenses that are unavoidable.
Many of the big free sites have already gone to a "pay for placement" model, where they don't care about signups as much as they care about ad rates.
So, how will the big pay programs deal with the big free sites?
Will they go out and buy the big free sites?
Make private deals with the sites that can send 1000's of signups a month?
Do they just continue buying advertising, but expect lower rates because they don't have to compete against as many affiliates and their conversions are worse with the new rules?
Do they start their own free sites, or just drop out of the free site game altogether and go directly to search engines?
Where there is traffic, there is money, so I can't see millions of uniques a day (Sex Tracker top 10) being ignored.Comment
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You can still chargeback even if you used Verified By Visa? How?Originally posted by Kimmykim
Yep, but we aren't going to be allowed to use it to combat chargebacks.Comment
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I found this article on the internet..granted it's from 2001...dunno if there are any newer ones out there about mainstream chargebacks in the industry:
Even so, the available data would suggest that many e-tailers would struggle to keep chargeback levels beneath this ceiling:
According to an Unterberg Towbin study in 1998, more than 50 percent of disputed (or potentially fraudulent) charges at the Visa European division came from Internet transactions. However, 'Net transactions represented only 2 percent of the division's total transaction volume.
A recent Gartner study stated that e-tailers typically incur online chargeback rates of 2.64%, with fraudulent or stolen credit cards accounting for 1.13% of this total
And the CyberSource Fraud 2000 Survey revealed that approximately 4% of total transactions over their system are fraudulent, but that this figure ranged from 0% to 40%.
http://sellitontheweb.com/ezine/opinion076.shtmlXYCash Gay Affiliate Programs - Making Money For Webmasters Since 1999 - click here to sign upComment
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Fuck, how can adult expect to be lower than the online average?Originally posted by XYCash
A recent Gartner study stated that e-tailers typically incur online chargeback rates of 2.64%, with fraudulent or stolen credit cards accounting for 1.13% of this total
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This is an old survey tho - I was hoping someone would have some newer stuff to point toOriginally posted by Mr.Fiction
Fuck, how can adult expect to be lower than the online average?XYCash Gay Affiliate Programs - Making Money For Webmasters Since 1999 - click here to sign upComment
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Actually, Verified by Visa eliminates chargebacks.Originally posted by Mr.Fiction
You can still chargeback even if you used Verified By Visa? How?
But the problem is that you can't use it with a recurring billing model.Comment
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I am under the impression that high risk can't use it period? Correct me if I am wrong?Originally posted by thetrog
Actually, Verified by Visa eliminates chargebacks.
But the problem is that you can't use it with a recurring billing model.
It was thought at one point that the initial sale would be protected, but that's not the case now I believe.Comment
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This is ridiculous.
It's time to find out who is pulling the strings on this mess.
Hook 'em.Comment
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Like most of you, we are really concerned about how this is going to affect all of us. The processors, the pps, the 50/50s the tgps everyone. This is going to hurt and hurt bad. David's points are all right on the money.
One thing I'm wondering and i'm guessing KK will be the best to comment on this, with the way chargebacks are calculated, the new rate basically means paysites will have to do everything in their power to never decline in sales. Having one month promotions to increase sales are going to be more detremental than beneficial especially if the site can't maintain that higher number of sales. IS that correct? Sounds to me like not only PPS are affected by this. If a quick boost in sales can be risky then alot of programs are going to REALLY tone down the marketing tactics and as a result everybody in the food chain will be making less (ALOT LESS).Comment
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You may be right.Originally posted by Kimmykim
I am under the impression that high risk can't use it period? Correct me if I am wrong?
It was thought at one point that the initial sale would be protected, but that's not the case now I believe.
I was just pointing out that the non-recurring requirement was a big problem for many adult sites.
I assumed that an adult site could use it if the webmaster choose to go with non-recurring since, if I recall correctly, Ibill recently started offering VBV as an option.
But I could be wrong.Last edited by thetrog; 07-02-2003, 02:18 PM.Comment
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all this talk of CB's made me realize i've never even checked our stats on that.. we are doing 0.18%...i dont think this 1% thing is really a big deal overallComment
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Online checks . . . . ?
Hook 'em.Comment
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Start paying your affilliates $35 per trial signup instead of doing 60/40 revshare. Then come back in 3 months and let us know how the numbers look.Originally posted by angelsofporn
all this talk of CB's made me realize i've never even checked our stats on that.. we are doing 0.18%...i dont think this 1% thing is really a big deal overall
I guarantee they won't be the same.sig too bigComment
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There really isn't an easy way around this problem.
You can't just turn up the scrub, or get rid of cross sales, or whatever else you think might be driving up your chargeback numbers, because ANYTHING you do that decreases sales will increase your chargeback ratio, because chargebacks from 3 months ago are counted against today's sales.
My personal opinion is that a lot of affiliates are going to get shit canned from the big programs in the near future.
Nasty Dollars did this not too long ago (terminated accounts that had excessive refund/chargeback ratios) and I see alot, if not all per sign up companies following suit.
The future isn't looking too bright for non US webmasters either IMHO.
That's my
sig too bigComment
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Well said KimmyKim. I also agree with your other post that good customer service, truthful tours and working cancel pages etc are what everyone should have. I think this will help clean up the crap in this industry.Originally posted by Kimmykim
Aw shucks, I just feel like I'm pissing in the wind ice ice.
If this thing were to come to fruition at its worst, some businesses would come out looking like a million dollars.
People who want porn will continue to pay for porn.
The system will adapt and those that adapt with it will continue to bring home just as much money as they ever did.
Once again there's a lower middle subset that will bear the pain of it all, just like with the tax system.
MarkIntenseCash - If you can't convert us then you might want to look for a new job
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BrokeStraightBoys.com converting 1:124 stats counted by NatsComment
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No doubt the banks will find a way to punish that side too if enough people use them.Originally posted by John3
Online checks . . . . ?Comment
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Rumor is the Fed is going to put a limit on online checking of 2% 'chargebacks'Originally posted by Mr.Fiction
No doubt the banks will find a way to punish that side too if enough people use them.Comment
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2% might be doable.
Of course I think you can open a checking account at age 16.Last edited by John3; 07-02-2003, 07:37 PM.
Hook 'em.Comment
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http://fnp.sexuncensored.com/bp_avs....95_Y/join.html
This a cb waiting to happen and it was funny when I looked to see who the processor was . lol As my dad says, "then they wonder why". lolComment
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I have issues with this one as well.Originally posted by tony404
http://fnp.sexuncensored.com/bp_avs....95_Y/join.html
This a cb waiting to happen and it was funny when I looked to see who the processor was . lol As my dad says, "then they wonder why". lol
I've never been one to bitch much about cross sells, just part of the business, but this one is pretty bad.
You get a free 30 minute preview to sex uncensored, and a pre-checked cross sell for a 30 minute trial to "Gold Edition". If you don't cancel them both within 30 minutes you get rebilled, so that gives you what, 15 minutes for each site to decide if you want to stay a member?
Plus all the guy signing up here wanted to see was the inside of the AVS site he just came from.
Also, at the top of the page in bold font size 3, black text on white background it says 1 year unlimited access to FreeNetPass and a 30 Minute Preview of Sex Uncensored - All for NO CHARGE!
and then the info on the cross sales that are pre-checked are in font size 1, black text on gray background......
Things that make you go hmmmmmmmmmmmmsig too bigComment
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Dave,Originally posted by Platinum Dave
Of course if you do 20 trials a day you should be fine, shit you can put your own credit card in for $1 transactions 5 times and move your ratio down .5% half percent.
You are not quite correct on 2 counts here. It take 100 good transactions for every chargebacks to offset that ratio 1%. Also, they do not only look at the transaction count, but dollar volume as well.
Mitch
Mitch Farber
CEO - NETbilling, Inc.
Email / Phone: 888-357-8166 / 661-252-2456
Transaction processing & 24/7 call center services with exceptional rates and flexibility, since 1998!Comment
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