Are the processing companies handling the new 1% chargeback ratio correctly?
 

Are the processing companies handling the new 1% chargeback ratio correctly?

What I mean is this...

The webmaster is responsible for maintaining a 1% cb ratio or less... so why are the processing companies scrubbing harder? It's not their responsibility to maintain a 1% cb ratio...it's the webmaster's responsibility.

So, if the processors loosen up the scrubbing... then all of the shitty paysites that receive high cb ratio's would lose their accounts and be run out of business...and that is a GREAT thing for the legitimate webmasters.

Why do the processors tighten their cc scrubbing just to help shitty paysites stay in business while hurting the legitimate paysite's sales?

Any thoughts on this?

~Ray

If they did loosen up the scrubbing and allowed the webmasters to continue on then they could lose their processing rights.

It's a 2-way street and they are protecting their business. We all knew it was going to come to this. Those that prepared themselves or had a legal business to start with are not worried. Those trying to make the quick buck the old way ... well hope they close the door as they leave.

:2 cents:

Ray

I am going to be candid here. Processors are in business also, and unfortunately what that means is that they want to process as much volume as possible, period. If that means being a little tougher on clean merchants, then that's what it means. I cannot say that I wouldn't be pissed off if i was a clean merchant, but that's the way it works. Sometimes, and I am only speaking for PaySystems, we will look at merchants with large volume and clean records and analyze our scrubbing. For the most part, by being with a processor, you are only as strong as that processor's weakest merchant.

Regards
James

The processors still get fined if their overall c/b ratio is over 1% as far as I know.

Ray,
Go back and read what you wrote and tell me how it makes sense. You are normally pretty well on target but this is a bit off the wall.

It was harder to put into words than I thought. It just seemed like the processors were scrubbing harder to reduce the amount of chargebacks... but what if you ran a clean paysite and never had any problems with chargebacks...now your business is hurting due to the increased scrubbing that the processors do to help the sites with high cb ratios stay under 1%.

Again, maybe I'm not saying it correctly. Maybe the processors can have an auto program that tightens the scrub for sites who need it while maintaining a normal scrub for those who don't.

I'm probably missing something... :)

~Ray

Ray

I think an automated system would make life much easier for all of us. But where do you draw the line...which scrubbing techniques do you loosen for a clean merchant...what does the "clean" merchant say when his account gets nailed with chargebacks because some fool hit him with a DB of cards........

If you have an answer, though, we are all ears.

James

The point is that they HAVE to scrub more now or else they run the risk of their merchant accounts. And if that happens then you have a ton of webmasters waking up to find their rebills have disappeared. A processor exceeding the 1% doesn't do anyone in the idustry good......It is an interesting climate right now huh?

That is where we hope to take advantage of the industry trend. Because of our merchant portfolio, we will be able to handle the chargeback ratios while a processor focusing on the adult industry alone will have to be extremely careful simply because they have to pool all the adult transactions together. Anyway...this is getting redundant...a possible solution would be to move your tangible goods out of your adult processors so that they do not scrub as hard (tangible goods are lower risk) and opening a merchant account with a mainstream processor (PaySystems)...this allows your DVD sales to remain at the same level.

Cheers
James

I wish I had all the answers... :)

~Ray