I know what you are saying. As for Paycom, our name is prominently displayed, several places. But, as you said, these people are going blind from looking at the screen while? well you know?

So the answer is what? We do the best we can with what we have. We remind people too that call our Center. The toll free is right on that statement that they are looking at, so we are making ourselves available.

I am always up for constructive suggestions. Unfortunately we are kind of screwed by the rules that you employer puts out there. I mean it is really nice as a cardholder to know I am protected from unauthorized transactions. But it is another thing for Visa to advertise on the Olympics that you can buy online and just decide not to pay. ?Zero Liability? they call it, I think. I mean what?s a Webmaster to do to fight that? That?s why I say V by V is at least something.

C

VISA wants it both ways....they give the user zero liability, while, at the same time, lobby for legislation that makes bankrupting your credit cards more difficult....

The real problem is that someone claims fraudulent usage gets a chargeback and still uses the card. Most of the time they don't block that credit card for further usage and issue a new one. Why is that? sure they know the reason for the chargeback but they still do it anyway.

Friendly fraud is rampant, I'd guess it is probably the single most important factor in chargebacks.

Most porn surfers in this day and age are not stupid, they understand it is either cancel or be rebilled -- that is the reason SO many surfers cancel immediately -- they never even look at the members area until after they have cancelled.

Hell, even my 11 year old can explain what a free porn tour is versus signing up for something, much to my surprise and dismay over this holiday.

The millions of $$$ made every year from Internet porn & they don't care about all the money they make from them!? I find that VERY hard to believe. If all the sudden all the porn sites stopped using CC as the way to access the member's area, I think that'd put a pretty hefty dent in to the CC's bank accounts. I'd bet they'd be kissin' our ass then!

They'd never even notice it. It's like having a hundred dollar bill and losing a penny, to make it into an analogy that doesn't have so many zeros on one figure that you don't get it.

I don't believe it. It's gotta be noticeable.

You don't have to believe it.

If it's so unbelievable, then why would Visa continue to restrict and restrict and restrict? They've surely chopped the transactions by a third, and that doesn't seem to be bothering them... if it's such a big deal wouldn't they already be feeling it?

I mean shoot, if you only got a hundred bucks and you lose a twenty or two, you know it right?

Visa did $2.4 billion (with a ?B?) in 2002 sales, so far. Internet Porn, not to be confused with the Porn paid for with Visa cards in hotels (pay per view movies) and other forms (sex shops, etc) is less than 2% of their transaction volume. It is a lot of money, but KK is exactly right, who cares? Take 2% of anyone?s business and they would not care. They may not like it, but it won?t put them out of business. If it did, they were dead man walking already.

This is the kicker?Visa is a ?not for profit association?. They are owned by their Members, which are banks. In 2002 Visa, the ?not for profit association? realized $500 million in ?operating revenue. We, in the real world, call that profit. They don?t, they call it advertising money to ?build the brand?. They have to spend the cash. They have done one helluva job ?building the brand? with all of that money. And that effort and money spent has put money in all of our pockets. So give the Devil his due. If not for Visa and MasterCard, this industry would not have grown to this level this fast. True, another method would have come about, but Visa was there, then and we all profited by them being there, then.

Face it; Visa is 60+% of our business. We are 2% of theirs. We HAVE to make a profit and we NEED them. They don?t have to make anything and could care less about the revenue we generate. So we play by their rules or they take their ball and go home. The trick is to CHANGE the game! More on that later? January 6th.

What Visa does care about is ?Acceptance?. They want their cardholders to be able to use their Visa everywhere. Their slogan is ?Visa, it?s everywhere you want to be.? That includes the Internet and the Porn sites on it - us, in other words. So they allow us to operate, but they control what WAS rampant fraud. When this industry started we had the same thresholds (which were - none) that everyone else had. The industry screwed it up. Those wanting to make as much as they could as fast as they could just screwed it up. I assume back then everyone just thought this Internet thing was a flash in the pan and did whatever to make money. Low and behold 6 or 7 years later most are still round, all are more sophisticated and now we bitch about ?rules?. Audiotext went through the same evolution. There are now only 2 points of entry into the Visa system for all of US Audiotext. There used to be 100?s. Visa chose to fight the fraud in that space by limiting those allowed to process. They are doing the same in our space with the IPSP rules. They are not enforcing them 100% yet, but they will be soon. Ron Cadwell at CCBill can back me up here: When Visa does enforce the rules worldwide; the points of entry will decrease again.

Everyone on this board knows that fraud in the credit card industry is tried out online first nowadays. It is fast, anonymous and proves if a card is good right away. Some people reading this board perpetrate (or have in the past known someone that has perpetrated) this type of fraud and other types, more subtle, like just banging the shit out of a card number to earn a sign up fee or whatever. So the rules, the tightening of Visa policy, all that is a direct result of fraud on the part of mostly former Webmasters in this business. As always, the bad guys screw it up for the good guys. Being honest, disclosing your pricing, allowing cardholders to cancel without a trick or scam is what makes for a long-term player. All of you that are doing the right thing hang in there. It will pay off. The playing field is leveling, then true competition will win over just being able to scam faster than the next guy.

But that?s just my opinion, I could be wrong.

End of Rant.

C

Chris,

Netbilling also will be live with this in April and we are sure it will be a success to a certain degree. However, we find many more chargebacks come from rebilling than initial signups, and this will not protect the merchant from rebilling chargebacks when all he must say is "I cancelled" or "The site was not as promised". This solution will be much more viable for shipped products than recurring membership based web site, don't you agree?

"Your "ranting" is right on target. I agree 100%. We need Visa and Mastercard and anyone in this biz who does not think so, is dead wrong in my opinion. Amex is still alive and kicking after throwing porn out on it's ass!
Mastercard will be right behind Visa with the registration fee as they have been for over a year for merchants with their own merchant accounts.

Mitch

Mitch:

I think the V by V initial transaction is the one that makes the rest of them stick. If the disclosure is there, FTC compliant type disclosure, then the recurring, while not technically a V by V transaction will carry the same weight when fighting a chargeback. EPOCH is fighting chargebacks now and winning money back for our clients.

As for you guys being V by V in April, that is great news. However, I am confused as to how the people that you set up with their own merchant account benefit. I know the Merchant Plug In is by MID (Merchant ID). Wouldn?t all of your clients have to have their own Plug In? Not being combative here, just curious as to your understanding.

Thanks for agreeing with my rant. I think MC will be doing the same sort of thing as Visa. You know they abandoned SPA / UCAF, their version of Verified by Visa and joint ventured with Visa for the same product about 3 months ago. So now we won?t have to do 2 separate certifications, etc? Our vendor is certified with both so we are all set when MC turns on this same protection.

I guess we will all be on panels again at InterNeXt. See you in Vegas.
C

Well, it's far more important to them to keep their current customers & gain new ones than to worry only about porn consumers & ultimately...adult webmasters. I'm sure the general public who uses Visa is way more important. I agree, we're prob'ly a small chunk on a grand scale, but you can't tell me that they wouldn't feel it if suddenly Internet Porn disappeared.

The "Zero Liability" policy means zero liability for transactions YOU DID NOT DO. It does not mean you don't pay for transactions that aren't yours. Sign up for a website, and call Visa to charge it back. You'll see it's not as easy as you think it is.

Friendly fraud DOES NOT account for the majority of chargebacks.
The majority comes from people who are unclear on 3rd party processors and people who have difficulty cancelling.
If you wish, I'll take down statistics over my next 30 working days to prove my point.

Chris, you said Paycom is prominently displayed on join pages, so I'll dissect one of your join pages, as a surfer.

I "choose" to join for a month. I'm brought to a site hosted @ wnu.com. Problem #1.

I see a dull Paycom logo and a small notice saying Paycom is the designated processor for xxxx. However, I scroll straight down to the join form without reading that crap. Problem #2. Put your logo and "designated processor" text in a fixed frame at the top of the page. Easy enough to do, isn't it?

I fill out the form, click the check box confirming I've read the terms and conditions. Even if I click on the tiny link to read the t&c, I'm brought to a page that'll take me 10 mins to read, and I read fast. The page is 7 pages in a word processor and filled with legalese that is very confusing, even though english is my mother tongue. Problem #3.
"For good and valuable consideration, the sufficiency of which is acknowledged by you and the V1 Rotate, Inc., you hereby agree to become a subscriber to V1 Rotate, Inc. (the "Service")..." Come on... what the fuck does that mean.

You can condense your t&c into a paragraph or two and put it above the "Signup" button in a text area field.

So I've clicked on the checkbox, my form is filled out, I click "Secure" to submit my application.
Obviously, I'm taken away from the join page, and I completely miss the line saying "'PAYCOM.NET *XXXX will appear on your cardholder statement" which is several lines below the Join button.

Hope this helps.

So if you have 1000 members a month, and 20 of them are Australian, you wouldn't mind losing them just because you didn't feel like having Aussies visiting your site?

Sure that 2% won't make you or break you, but you don't turn business away for no reason. Especially when you have stockholders to please.

Um, sure buddy, the stockholders LOVE to hear about how public companies are doing business in porn.

You do customer service for exactly who again? I think I have asked you this in the past but I don't want to go searching -- a Canadian issuing bank right?

You are not even in the US.

On that note, if Visa USA had real doubts about the join page setup that third parties are using, they wouldn' issue the rules and regulations for those pages and allow them to be that way.

I spent a couple of years working for a third party processor and for starters there is not a huge chargeback situation at that one, and I would expect not at others that are well run, within the guidelines and rules that both Visa and their acquiring banks have outlined for them, there isn't a real problem either.

Surfers can read, and this isn't the days of High Society any more, disclosure has to be there, and it has to be where Visa mandates it to be.

As I mentioned before, my kid knows the difference between something free and something that takes a credit card to look at, so I have my serious doubts as to whether the porn buying population can't tell the difference either.

So, I just went and looked at the join page for a Paycom processed site.

At the TOP of the page -- BEFORE the enter your name box even -- This is what it says (I have stripped out the information as to what site it is and replaced the details):
Paycom.net is the designated Payment Processor for:
www.domainname.com Brought to you by 'descriptor'

Domain Name - Three Day Trial Membership
Today's charge is: $3.95 for a 3 day trial period.
Membership Renews Automatically at $39.95 every 1 month Until Cancelled


Now, where the cardnumber is entered, less than 1" below that on my screen we have:

C A R D I N F O R M A T I O N

Card Number:

(Numbers only, no dashes or spaces)

Card Expiration:

You must check Here to Certify that you are 18 Years of Age or Older and agree to the
terms and conditions of this purchase and have read our privacy policy


So, Joe Surfer has to CHECK the box, it is NOT prechecked for him. He has to at least read the sentence that says he is agreeing to something, of course he's already been told up on the TOP of the page that he's going to be charged today and every month for X dollars UNTIL HE CANCELS.

Last but not least, within 1" of the customer support link, here we have some more pertinent text...

Your IP Address is Logged for Fraud Prevention And Investigation: "0.0.0.0" (I changed to 0s)

'Paycom.net' is a designated payment processor for 'descriptor'

'PAYCOM.NET *descriptor' will appear on your cardholder statement

FRAUD WILL BE PROSECUTED TO THE FULLEST EXTENT OF THE LAW

Short of going to Joe Surfers house and videotaping his signup, you'd have to have some real retards on your hands to not be able to understand all of this.

It's in very plain wording, the prices are in numerals, not script, the billing names for the statement are all over it.

Oh, and did I mention just how many times I listened in to support when people 'claimed' they didnt know they would be rebilled? or claimed they didn't know they were being charged? or claimed someone else used their card?

Surfers LIE.

Yes I work for a Canadian issuing bank.

When someone joins a porn site, they don't examine the join page. They fill out the form to get their rocks off as soon as possible.

They scroll right past the text and god-ugly Paycom banner at the top, fill out the form and click submit. All that text at the top should be in a fixed frame at top so that it never leaves the screen.

And do you think they scroll past the Submit button and read all that information about how it'll appear on their bill? All that information should be in a fixed frame at the bottom.

Also, the IP address is worth jack shit. You have to subpoena an ISP to get them to confirm if that IP was ever assigned to Joe Blow. No court will issue a subpoena for a $40 chargeback.

A 2 minute redesign of the join page based on what it is now:
http://www.514bombed.com/paycom/join.html

I'm sure something like that would reduce chargebacks.
Shove the biller's name in his face as often as possible. Include it in your member area. Offer him a link to cancel in your member area. Your chargebacks will go down. Mine did.

:)

Well, as usual, Kimmy Kim says it best. I will not elaborate too much

A redesign is not going to do shit. Your entire contention is a guy is jerking off while surfing and not paying attention. So why would 200 point fonts make any difference? The disclosure is FTC approved. That?s the Federal Trade Commission in the USA, FYI.

BTW: KK is also correct that there are no chargeback problems. Our ratios are well below compliance thresholds. Our industry and companies like EPOCH and CCBill have lower chargeback rates than most Brick and Mortar Retailers.

So your ?experience? in dealing with Canadian cardholders of whatever bank is not representative of the entire cardholder base worldwide.

C

PS: KK? love your new tagline J

Why not implement a test? Take a webmaster who has a higher-than-average number of chargebacks. Get him to put up a join page like that (the top and bottom frames can easily be hosted by him). Leave it up for a week, 2 weeks, a month, whatever, and see if his chargebacks drop by any percentage.

The surfer ignores the text at the top and bottom of the signup form because they are EASY to ignore. If you constantly leave it in his face well he's filling out the form with two fingers, you greatly increase the chances of him remembering who he'll be billed by.

As for my experience not representetive of cardholders worldwide, you're right to an extent. However, my girlfriend works for Visa at a different bank and she's noticed the same things I have. Together, we cover nearly 50% of all Canadian credit card holders.
You know those poll taking companies? The ones who announce "47% of all Americans like eggs" or "33% like Al Gore"? You know how they get those results? A random sampling of the population... which is much like my experience.

how about when the surfer click on the submit button, a WAV file loads saying "You will be billed by XXXXX. Don't forget. Chargeback and we'll hunt you down."

Hmmm, unless something has changed, webmasters aren't allowed to carry a higher than average number of chargebacks in most third party systems.

The reason for those low cb rates in third party is not because some people get away with murder and the rest make up for it. At least not where I used to work.

Anyone who's cbs got out of hand found themselves in what I like to term 'counseling' with sales and the fraud dept to attempt to work out a solution that suited both sides. If that didnt work then there were no sides left.

I'm quite aware that high chargeback ratios aren't tolerated. But they happen and they have to be fixed.
You call it "counselling". Take a webmaster who's being "counselled" and test a framed sign-up form with them.

I had a below-average number of chargebacks on a site, but I had them nonetheless. So I implemented two of my previous suggestions. I put a top frame when someone went to the "join" page with the processor's logo, the price and "This charge will appear as...". I also included a link straight to the cancel page from the front page of my members section. It cut my chargebacks by about 30%. So obviously fraud (real or friendly) is still there. But a 30% drop in chargebacks is not too bad.

Why are people afraid of implementing things like this? Are processors/webmasters worried it'll cut into profits because it will be harder to screw over the surfer?

How long have you had your paysite open, if you don't mind me asking?

the one I was talking about? It was open for about 14 months after I tried what I said above. That was about 5 months ago.
So about 19 months.

Just to be clear:
I'm not denying the existance of friendly fraud. It exists, and it's pretty high. I'm just stating that not all of it is intentional and it can be reduced by some of my suggestions.
And for the friendly fraud that is intentional? It's the responsibility of the credit card companies to determine that, and my company is doing it's part. Unfortunately, I can't speak for other credit card companies.

Actually 49.999 % of American voters liked Gore, more depending on your political views.

My problem with your suggestion is that you are trying to solve a problem that does not exist. There are no chargeback problems. Sure, some cardholders don?t remember which Porn site they bought. But this is not, repeat not, causing high chargebacks.

And just so we are clear: First you said you worked for Visa, then you said a Bank, then you said a Canadian Bank. Now you are a Webmaster too? Would you care to amend any of your claims?

C

Unlike American Express, Visa doesn't issue cards directly. They issue you them through banks. I work for the TD Bank, in Canada. I work as a customer service agent for TD Visa. The bank writes my paychecks, however I deal only with Visa cards issued for the bank.

I am also a webmaster. I only work 40 hrs/week at TD Visa, leaving me plenty of spare time. I'm not the only webmaster who has another job.

My numbers concerning Gore were imaginary.

And perhaps there's no specific problem with Paycom. If you say there isn't, I'll believe you. But this thread was started because someone had a chargeback problem with their processor (he never mentioned who he uses), so I gave my 2 cents.
I only chose to analyze yours because you had spoken first. Perhaps you don't have a chargeback problem, but I'm sure you have chargebacks nonetheless (if not, then I'll switch to Epoch right away). I don't see how my suggestions could do anything but reduce your chargebacks even further, right? It was just constructive criticism on my part. Take it or leave it :)

That's cool. And you should switch to EPOCH. :)

C

give me 10% and no reserve and i'll do it right now ;)

Got a million a week? We can talk.
C

hmm... only about a million short this week... I'll let you know.