Amp,
Jettis will be making a formal announcement tomorrow regarding the new Visa regs, but here is my take on a few of your specific questions.
My major points of interest right now:
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1. The big push for continuing to use a 3rd party processor (according to Kim and some others) is the chargeback thing. But I can't really understand how this is a positive sell, since we're still fucked either way, whether we go through you or whther we use our own merchant account. Please do explain.
While many of the benefits of using a 3rd party processor will be gone when the new regs go into effect, there are still a few benefits that will remain. As I see it, these are the benefits that one can still expect after the new regs are in place:
1. You don't need to sign a personal guarantee with the bank (the processor still takes the financial risk)
2. People with bad/marginal credit can still process
3. Simplified accounting (reconciling funds that go in and out of a merchant account can be very tricky.
All of the other things that are offered via a 3rd party billing company can also be acquired on an "ala carte" basis if you have your own merchant account. For example, Jettis has many clients who have their own merchant accounts. These clients also pay us for services like fraud control, 24/7 customer service, affiliate software, database management, etc, etc.
For some merchants, having their own merchant account will be a better way to go. For others, the remaining benefits offered by 3rd party processors will still be enough to warrant paying a small premium to 3rd party processors.
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2. I'm very curious about the info and basis of information that Visa wants. If one of my companies is blacklisted (for whatever reason) will that only affect that company, or am I personally fucked as an individual for my other ventures?
This is a great question and is an issue that is still being researched to ensure an accurate answer. We'll post this information once we have a definitive answer from Visa.
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3. The url approval thing is bothering me as well. I wish this would be explained in more detail. If I decide to pay my fee for Visa processing, and Visa decides not to approve my url, are they going to refund the fee? I think this whole thing is bullshit.
Again, we are researching this issue. Many of these types of scenarios have not been clearly defined by Visa or are still being clarified. The reason VISA wants URL information is to prevent bad merchants from skipping from one 3rd party processor to another. However, I agree with you that if your "URL" or account is not approved, you should not have to pay the fee. Unfortunately, I didn't make the rules, so just because I agree with you doesn't mean Visa will
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4. Will you, as a 3rd party processor, be reducing the transaction percentages now due to the loss of the major umbrella that was in fact the main attraction to using 3rd party billing, or will you simply milk the site owners for all they're worth?
This is a good question, but one that should be based on the real facts about the "cost of processing". Most people think that 3rd party billers pay 4%-5% for their merchant account, charge 15% and the difference is pure profit. This is not the case. Here are hard expenses that you would have to pay if you had your own merchant account:
1. 24/7 live customer service. This is 100% necessary to keep chargebacks under control and is a SIGNIFICANT expense as a % of your 3rd party processing fees.
2. Fraud Control - If you had your own merchant account, you would need to pay someone for fraud control. Jettis offers this ala carte, as do most processors, but there is an expense here that needs to be considered.
3. Most banks charge a "transaction fee" in addition to a "discount rate". This can dramatically increase the real cost of having a merchant account.
4. Gateway fees - You will still need to run your transactions through a "gateway", like Jettis, Paycom, CCBill, etc and will be charged a small transaction fee for this service.
If you factor in the "discount rate", bank transaction fees, gate way fees, chargeback fees, customer service fees and fraud control fees, you will see that your actual cost of having your own merchant account will only be slightly less than going through a 3rd party processor. For example, Jettis currently starts new clients at a rate of 12.5%. Having your own merchant account would probably cost you in the range of 9% - 11%, depending on volume and which vendors you select to provide the services mentioned above.
Is there still a slight premium charged to go through a 3rd party processor? Yes, but I do think it's warranted (provided it's not a large premium) given the fact that the 3rd party processor is still taking the risk with the bank.
Again, I think having your own merchant account vs going with a 3rd party biller is a choice that needs to be made by each individual or company based on their particular needs and circumstances. Jettis can provide services to both types of clients, so we certainly won't push anyone in one direction vs another, but we'd be glad to help you make the decision that's best for you and help you though getting your own merchant account if that is the direction you want to go in.
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5. Will you, as a 3rd party processor, be tightening up the methods by which you prevent chargebacks, or is it really accepted as the standard to simply decline half the attempted transactions as a method of prevention? Doesn't really sound like the optimal solution to me, but then, I'm no expert.
I think I can speak for all 3rd party processors on this one. While everyone has their own methods, many of the techniques used by 3rd party billing companies are similar. A LOT more goes into it than just declining half of the attempted transactions. The fact is that MOST declines are "bank declines" which has nothing to do with the 3rd party processor. After that, declines happen for a variety of reasons including risk scoring, spending limits, fraud data, etc. Remember, we have no financial motive to decline transactions. We only make money on good transactions so it's in our best interest to let as many transactions through as possible, while keeping fraud to a minimum.
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6. Please explain in your own words WHY I, as a site owner, should continue the use 3rd party billing and pay your per transaction percentages as a processing solution as opposed to setting up my own merchant account and taking matters into my own hands. If you choose to insult me (as I have seen happen here in the last 2 days) rather than provide a reasonable and convincing answer, consider yourself off the table as an option.
As mentioned above, Jettis wouldn't try to convince you to keep using a 3rd party biller. We would simply inform you of all the pros and cons and then help you move in whichever direction you decide is best for your business.