Just got the following info from CCBill! Thanks guys!!!
___________________________________
Important VISA IPSP Information For CCBill Clients!
As all of you are aware, the e-commerce, card-not-present landscape continues to evolve and change at fairly rapid speeds. The high-risk industry, specifically adult, has been under intense scrutiny for the past two years by all the credit card associations, politicians, and the banking and financial industry in general. CCBill has attempted to maintain positive relationships with these associations and organizations, as their payment mechanisms are the only viable options for digital downloadable and immediate access service providers. In an effort to clarify, and even restate some recent comments by others in our industry, CCBill has created this document for our clients.
Visa IPSP Program Changes
Effective October 1, 2003 Visa will lower their monitoring thresholds of its ?Merchant Chargeback Monitoring Program? for all merchants, regardless of their business classification, from 2.5% to 1%. In conjunction with that threshold decrease, Visa has raised the minimum number of chargebacks (cb?s) threshold per month to 100 from 50. Furthermore, as of January 1, 2004, Visa will alter its ?Global Merchant Chargeback Monitoring Program? from 2.5% International Chargebacks to an International sales ratio of 2.0% and increase the minimum number of chargebacks to 200 from 100.
In response to questions regarding these global changes and their effect on an IPSP?s portfolio, CCBill has received the following clarifications from Visa:
An IPSP?s overall portfolio must stay within the new thresholds, the same as before the rule change. However, effective October 2003, the reports that an IPSP submits to Visa each month for Sponsored Merchant activity (under a High-Risk IPSP or HRIPSP) will be adjusted downward from 2.50% / 50 cb's to 1% / 100 cb's. Thus, in November, the HRIPSP program will begin reviewing October data to detect Sponsored Merchants who fall above the new 1% / 100 cb?s threshold. FYI, this is the same information that Paycom accurately passed on to many members of the industry last week.
If a Sponsored Merchant is detected above the new threshold, the IPSP will be asked to lower the cb ratio within a reasonable time period. If the Sponsored Merchant and the IPSP fail to lower the cb ratio within an acceptable period, Visa may require the IPSP to assign a specific name descriptor to the Sponsored Merchant in order to facilitate their inclusion into Visa's risk programs, just as they would with any other non-compliant merchant.
What does this mean for CCBill clients?
CCBill does not anticipate major changes to any of our systems as our portfolio, and that of our clients, appear to be compliant with the above mentioned policy changes. Of course, CCBill will continue to monitor our portfolio?s performance and that of our clients and reserves the right to mandate and implement changes as necessary. Furthermore, should any of our individual clients need specific modifications, CCBill will, as always, continue to work directly with those clients.
What suggestions does CCBill have to minimize Chargebacks?
CCBill would like to take a moment to stress the key areas that we believe this industry and individual website operators can focus on in their efforts to minimize consumer complaints, and ultimately chargebacks and refunds:
Be selective with your business partners/referrers and monitor their performance.
As mentioned by others previously, run revenue sharing referral models. Flat pay and pay per sign-up referral models invite fraudulent referrers.
Provide clear and accurate marketing to the consumer.
Make cancellation a reasonable process. One way or another, if a consumer wants to cancel they will. So, allow them to do so. Otherwise, they WILL go to their issuing bank, because they have no other option.
Provide the content you say you are going to provide.
Report any suspected referral fraud to [email protected], including as detailed a description as possible of the fraud occurrence/s.
If your site experiences technical difficulties or service outages for more than a 3 hour period, please notify our CCBill Technical Support Department at [email protected], so that we may be better able to assist your customers.
Although we are all aware that 70-80% of all chargebacks and refunds come from consumers that actually received service, it is in everyone?s best interest to minimize any additional opportunities for problems.
If you have any questions regarding the new regulations, please feel free to contact us at [email protected], or call us at 800.510.2859.
We appreciate your business and look forward to seeing you at Internext in August.
Ron Cadwell
CCBill.com
___________________________________
Important VISA IPSP Information For CCBill Clients!
As all of you are aware, the e-commerce, card-not-present landscape continues to evolve and change at fairly rapid speeds. The high-risk industry, specifically adult, has been under intense scrutiny for the past two years by all the credit card associations, politicians, and the banking and financial industry in general. CCBill has attempted to maintain positive relationships with these associations and organizations, as their payment mechanisms are the only viable options for digital downloadable and immediate access service providers. In an effort to clarify, and even restate some recent comments by others in our industry, CCBill has created this document for our clients.
Visa IPSP Program Changes
Effective October 1, 2003 Visa will lower their monitoring thresholds of its ?Merchant Chargeback Monitoring Program? for all merchants, regardless of their business classification, from 2.5% to 1%. In conjunction with that threshold decrease, Visa has raised the minimum number of chargebacks (cb?s) threshold per month to 100 from 50. Furthermore, as of January 1, 2004, Visa will alter its ?Global Merchant Chargeback Monitoring Program? from 2.5% International Chargebacks to an International sales ratio of 2.0% and increase the minimum number of chargebacks to 200 from 100.
In response to questions regarding these global changes and their effect on an IPSP?s portfolio, CCBill has received the following clarifications from Visa:
An IPSP?s overall portfolio must stay within the new thresholds, the same as before the rule change. However, effective October 2003, the reports that an IPSP submits to Visa each month for Sponsored Merchant activity (under a High-Risk IPSP or HRIPSP) will be adjusted downward from 2.50% / 50 cb's to 1% / 100 cb's. Thus, in November, the HRIPSP program will begin reviewing October data to detect Sponsored Merchants who fall above the new 1% / 100 cb?s threshold. FYI, this is the same information that Paycom accurately passed on to many members of the industry last week.
If a Sponsored Merchant is detected above the new threshold, the IPSP will be asked to lower the cb ratio within a reasonable time period. If the Sponsored Merchant and the IPSP fail to lower the cb ratio within an acceptable period, Visa may require the IPSP to assign a specific name descriptor to the Sponsored Merchant in order to facilitate their inclusion into Visa's risk programs, just as they would with any other non-compliant merchant.
What does this mean for CCBill clients?
CCBill does not anticipate major changes to any of our systems as our portfolio, and that of our clients, appear to be compliant with the above mentioned policy changes. Of course, CCBill will continue to monitor our portfolio?s performance and that of our clients and reserves the right to mandate and implement changes as necessary. Furthermore, should any of our individual clients need specific modifications, CCBill will, as always, continue to work directly with those clients.
What suggestions does CCBill have to minimize Chargebacks?
CCBill would like to take a moment to stress the key areas that we believe this industry and individual website operators can focus on in their efforts to minimize consumer complaints, and ultimately chargebacks and refunds:
Be selective with your business partners/referrers and monitor their performance.
As mentioned by others previously, run revenue sharing referral models. Flat pay and pay per sign-up referral models invite fraudulent referrers.
Provide clear and accurate marketing to the consumer.
Make cancellation a reasonable process. One way or another, if a consumer wants to cancel they will. So, allow them to do so. Otherwise, they WILL go to their issuing bank, because they have no other option.
Provide the content you say you are going to provide.
Report any suspected referral fraud to [email protected], including as detailed a description as possible of the fraud occurrence/s.
If your site experiences technical difficulties or service outages for more than a 3 hour period, please notify our CCBill Technical Support Department at [email protected], so that we may be better able to assist your customers.
Although we are all aware that 70-80% of all chargebacks and refunds come from consumers that actually received service, it is in everyone?s best interest to minimize any additional opportunities for problems.
If you have any questions regarding the new regulations, please feel free to contact us at [email protected], or call us at 800.510.2859.
We appreciate your business and look forward to seeing you at Internext in August.
Ron Cadwell
CCBill.com
Comment