Another Turn of the Screw - GoFuckYourself.com

fsck · 10-17-2002, 09:16 AM

articles from www.ccnews.cc
part 1

Another Turn of the Screw
New VISA/MasterCard Regulations Could Forever Change the Adult Internet Landscape
LOS ANGELES ? According to an announcement released last week by three of the adult Internet?s larger third-party aggregators - Epoch/Paycom, iBill, and CCBill - VISA and MasterCard (V/MC) have established several new regulations that have the potential to profoundly change the relationship between aggregators and adult Webmasters who do not have their own merchant accounts. Immediately after the announcement, the boards were awash with comments, complaints, questions and prognostications, dire and otherwise, about what exactly the intended and inadvertent affects of the new regulations might be.
Typically, when V/MC sneeze, the adult Internet gets a cold, and sometimes a touch of influenza. With these new regulations, however, few Webmasters know whether they should see a doctor, travel agent, or mortician. And though it may be a while before the answer is crystal clear, AVN Online´s preliminary discussions with a variety of adult Internet individuals revealed reactions that ranged from sanguine to fatalistic, and opinions as to V/MC´s motives running the gamut from those who believe that the companies are trying to do what´s best for both themselves and the industry to those who are convinced that these new rules are the beginning of the end for the domestic adult Internet as we know it.
Perhaps the most palpable changes are the new labels: Aggregators will now be called Internet Payment Service Providers (IPSPs), and merchants that use IPSP services will now be referred to as Sponsored Merchants. According to the announcement, "An IPSP is a company that provides a broad array of services and has financial responsibility and liability for merchant accounts whereby you, our clients (Sponsored Merchants) are allowed to process and settle Internet transactions."
The name changes, according to one respected Internet attorney, are significant: IPSPs are now linguistically associated with Internet Service Providers (ISPs), with which they have traditionally shared similar rights and responsibilities, and Sponsored Merchants are now an acknowledged subset of the IPSPs, linked in liability by being "sponsored:" an ingenious way of marking the IPSPs publicly as being manifestly responsible for their clients´ actions.
On their face, the new regulations - the majority of which are being implemented by VISA - are couched in language that is aimed at giving the credit card companies greater control over an industry that knows no geographical boundaries and historically has been susceptible to high chargebacks and fraud. They include:
New registration fees: initial ($750) and annual ($375).
The required filing by Sponsored Merchants with VISA of new registration forms that must then be approved by VISA. (An example form can be found here.)
The compulsory funneling to VISA by the IPSPs of monthly sales and chargeback data for every URL.
A new policy that states that IPSPs can register Sponsored Merchants only in the country where the Sponsored Merchant has a presence.
MasterCard will be instituting several new rules of its own in the near future, but for the time being the company has decreed that the MasterCard logo may not be displayed on clients? sites, something that VISA has yet to stipulate.
Other less controversial emendations have to do with changes to the descriptors on the cardholders´ credit card statement, the displaying of IPSP Terms and Conditions on join forms, and other labeling requirements.
Regarding the timetable of these changes, the announcement says, "October is the month to implement these changes," and includes a timetable for Webmasters to follow to have everything completed by Nov. 1. The rapidity with which these changes are being ordered is also of some concern in certain quarters, as it leaves precious little time for Webmasters to review their options and decide whether they want V/MC to have direct access to all the information the companies are asking for.
The IPSPs
We asked the three companies that issued the announcement for some clarifying comments. All responded except iBill.
Epoch
Rand Pate of Epoch Systems generously took the time out from an inevitable avalanche of Webmaster queries to respond to some questions. Keep in mind that these answers were provided immediately after the announcement was released, and some of the questions have since been fully answered.
What regulations are new?
"The enforcement of reporting down to URL levels all credit and chargeback activity to VISA [is new]. Epoch has been doing this for over a year, so although nothing is new to us, it is now being "enforced" by VISA."
Are all these fees new?
"Yes."
Why is this happening now?
"All I can really say is what we´ve heard over and over again.... If adult Webmasters don´t learn to police themselves, someone will do it for them. Guess it´s happened."
How long ago were you informed that this was going to happen?
"We´ve known about much of the regulations for several weeks, and some for several months. The regulations were not released from acquiring banks, however, until now."
Is there any significance to you now being called an IPSP?
"It´s VISA´s designation for online third party processors. By defining us and being familiar with our business, they can understand how IPSPs help fight fraud and manage a section of business for them they would not otherwise want to deal with."
Are you aware of any other new regulations that are not included here?
"Not that I´m aware of. The new MasterCard regs have not yet been released, however."
"IPSPs can only register Sponsored Merchants in the country where the Sponsored Merchant has a presence." Do you know what this means? Does it mean where their servers are, their headquarters, their P.O. box?
"I´m waiting for clarification of this myself. It does appear that if you process in the U.S., you must have a presence there; same for the U.K., Canada, or wherever." (We have since been told that VISA has clarified its "presence" requirement to mean that all companies must actually have staff in the United States, though VISA has not yet confirmed this to us, or explained what exactly constitutes a "staff.")
VISA wants to see all monthly statements, chargebacks, etc., down to the URL, and reserves the right to terminate specific URLs. Is this new? Is it significant? Are they trying to exert more centralized control?
"They are trying to ensure that programs causing damage to their product and unacceptable customer issues are not able to hide in third-party portfolios or by spreading their business out among multiple processors."

10-17-2002, 09:16 AM	#1
fsck Registered User Join Date: Aug 2002 Posts: 20	Another Turn of the Screw articles from www.ccnews.cc part 1 Another Turn of the Screw New VISA/MasterCard Regulations Could Forever Change the Adult Internet Landscape LOS ANGELES ? According to an announcement released last week by three of the adult Internet?s larger third-party aggregators - Epoch/Paycom, iBill, and CCBill - VISA and MasterCard (V/MC) have established several new regulations that have the potential to profoundly change the relationship between aggregators and adult Webmasters who do not have their own merchant accounts. Immediately after the announcement, the boards were awash with comments, complaints, questions and prognostications, dire and otherwise, about what exactly the intended and inadvertent affects of the new regulations might be. Typically, when V/MC sneeze, the adult Internet gets a cold, and sometimes a touch of influenza. With these new regulations, however, few Webmasters know whether they should see a doctor, travel agent, or mortician. And though it may be a while before the answer is crystal clear, AVN Online´s preliminary discussions with a variety of adult Internet individuals revealed reactions that ranged from sanguine to fatalistic, and opinions as to V/MC´s motives running the gamut from those who believe that the companies are trying to do what´s best for both themselves and the industry to those who are convinced that these new rules are the beginning of the end for the domestic adult Internet as we know it. Perhaps the most palpable changes are the new labels: Aggregators will now be called Internet Payment Service Providers (IPSPs), and merchants that use IPSP services will now be referred to as Sponsored Merchants. According to the announcement, "An IPSP is a company that provides a broad array of services and has financial responsibility and liability for merchant accounts whereby you, our clients (Sponsored Merchants) are allowed to process and settle Internet transactions." The name changes, according to one respected Internet attorney, are significant: IPSPs are now linguistically associated with Internet Service Providers (ISPs), with which they have traditionally shared similar rights and responsibilities, and Sponsored Merchants are now an acknowledged subset of the IPSPs, linked in liability by being "sponsored:" an ingenious way of marking the IPSPs publicly as being manifestly responsible for their clients´ actions. On their face, the new regulations - the majority of which are being implemented by VISA - are couched in language that is aimed at giving the credit card companies greater control over an industry that knows no geographical boundaries and historically has been susceptible to high chargebacks and fraud. They include: New registration fees: initial ($750) and annual ($375). The required filing by Sponsored Merchants with VISA of new registration forms that must then be approved by VISA. (An example form can be found here.) The compulsory funneling to VISA by the IPSPs of monthly sales and chargeback data for every URL. A new policy that states that IPSPs can register Sponsored Merchants only in the country where the Sponsored Merchant has a presence. MasterCard will be instituting several new rules of its own in the near future, but for the time being the company has decreed that the MasterCard logo may not be displayed on clients? sites, something that VISA has yet to stipulate. Other less controversial emendations have to do with changes to the descriptors on the cardholders´ credit card statement, the displaying of IPSP Terms and Conditions on join forms, and other labeling requirements. Regarding the timetable of these changes, the announcement says, "October is the month to implement these changes," and includes a timetable for Webmasters to follow to have everything completed by Nov. 1. The rapidity with which these changes are being ordered is also of some concern in certain quarters, as it leaves precious little time for Webmasters to review their options and decide whether they want V/MC to have direct access to all the information the companies are asking for. The IPSPs We asked the three companies that issued the announcement for some clarifying comments. All responded except iBill. Epoch Rand Pate of Epoch Systems generously took the time out from an inevitable avalanche of Webmaster queries to respond to some questions. Keep in mind that these answers were provided immediately after the announcement was released, and some of the questions have since been fully answered. What regulations are new? "The enforcement of reporting down to URL levels all credit and chargeback activity to VISA [is new]. Epoch has been doing this for over a year, so although nothing is new to us, it is now being "enforced" by VISA." Are all these fees new? "Yes." Why is this happening now? "All I can really say is what we´ve heard over and over again.... If adult Webmasters don´t learn to police themselves, someone will do it for them. Guess it´s happened." How long ago were you informed that this was going to happen? "We´ve known about much of the regulations for several weeks, and some for several months. The regulations were not released from acquiring banks, however, until now." Is there any significance to you now being called an IPSP? "It´s VISA´s designation for online third party processors. By defining us and being familiar with our business, they can understand how IPSPs help fight fraud and manage a section of business for them they would not otherwise want to deal with." Are you aware of any other new regulations that are not included here? "Not that I´m aware of. The new MasterCard regs have not yet been released, however." "IPSPs can only register Sponsored Merchants in the country where the Sponsored Merchant has a presence." Do you know what this means? Does it mean where their servers are, their headquarters, their P.O. box? "I´m waiting for clarification of this myself. It does appear that if you process in the U.S., you must have a presence there; same for the U.K., Canada, or wherever." (We have since been told that VISA has clarified its "presence" requirement to mean that all companies must actually have staff in the United States, though VISA has not yet confirmed this to us, or explained what exactly constitutes a "staff.") VISA wants to see all monthly statements, chargebacks, etc., down to the URL, and reserves the right to terminate specific URLs. Is this new? Is it significant? Are they trying to exert more centralized control? "They are trying to ensure that programs causing damage to their product and unacceptable customer issues are not able to hide in third-party portfolios or by spreading their business out among multiple processors."