Optimal Billing Options: Visa Situation
- by Cyndalie Ashlock
It was only 3 years ago when payment options began dwindling for adult
businesses online. America Express pulled out, Visa and MasterCard
put a clamp on "factoring" and began to more tightly regulate and
restrict third party billing companies.
Now adult site owners are experiencing exclusion from services provided
by mainstream companies such as Paypal, more and more banks are stepping
away from customers associated with adult related business.
Yet the truth is, this necessary evolution of the billing industry
is not only healthy for the adult Internet industry as a whole, it
will breed and inspire all types of acceptable payment options. It
is no secret that adult webmasters are not the only online merchants
seeking relief from the Visa/MasterCard stranglehold.
Taming the Billing Beast
MasterCard is rumbling in his cave, ready to take another gouge at
adult and online merchants. It becomes difficult to separate the rumors
from reality, and to whom it may apply, when you hear things like
"MasterCard will be charging fees to be accepted," and, "If you pay
will Visa be accepted internationally?" and, "Are cancels now counted
as chargebacks?" and so the stories and questions go on...
If you read or otherwise discover information, and you are not sure
how it affects you, before you spread panic, ask questions and talk
to your processor. We've all heard a lot of talk, but now it's time
to break down the Visa situation in layman's terms.
To accept Visa for US customers you will need to register and pay
the $750 fee, along with the $350 annual renewal fee. Some say for
that cost, why not get my own merchant account? Acquiring and owning
your own adult merchant account can be difficult to manage, expensive
to set up, and it can incur all kinds of costs and risks - from customer
support to personal/business financial credit risks. If you lose a
merchant account due to disproportional chargeback/cancels or neglect,
you eliminate the option of becoming a Sponsored Merchant under a
third party processor in the future. This is very important to take
into consideration when reviewing your merchant options.
The best solution for adult webmasters, if you are going to accept
Visa, is to apply and become a Sponsored Merchant, pay the fee, get
set up with an honest, secure, and reliable billing company (ISPS),
and run your site the best way you possibly can - like a business.
Once you have a good grasp on what it takes to keep your account in
check and are making money, then you should explore the option of
maintaining your own merchant account.
Multiplying Costs
Many ask, "Can I accept Visa with multiple processors, such as a backup
processor or if I cancel or lose a Sponsored Merchant account with
another ISPS?" The answer is yes you can, but you have to pay the
Visa registration fee through each ISPS with whom you process Visa
transactions. If your Sponsored Merchant account is simply cancelled
by the ISPS, then joining with a new processor should not be much
trouble. However, if VISA pulls your SM account you will lose the
ability to process Visa on any level. If you use one primary billing
company and a second as a back up processor, plan on paying about
$1,500 before you're through getting set up with both billing companies.
When pricing out billing options you will notice that most companies
offer a free set-up and all kinds of features. What you really need
to know is: What is the per Transaction fee? What is the Rolling Reserve
Percentage, and for how long? What is the processing fee? How much
am I charged Per Chargeback and Per Credit? If you have to make a
phone call to find this information, you may want to keep shopping.
Although most services will negotiate rates based on the volume of
transactions you process, a truly good deal will be the happy medium
you are looking for. Ideally, you do not want to begin paying your
billing company until you start processing money.
Repressed Revenue
If you decide not to pay the Visa fee and attempt to find a company
that has found a "loophole" and is not charging the fee, be cautious.
For US webmasters this could turn into a processing nightmare where
you end up switching processors three or four times in the course
of a year and just hope your members can catch up. If you are living
in the US and have to decide, make a decision to accept Visa and comply,
or do not accept Visa.
Just because you do not choose to accept Visa does not mean you are
out of business. Companies such as PSWBilling.com offer a "lite" version
of their ePayment services where webmasters can sign up and still
accept MasterCard/MC Debit, JCB, and online checks as billing options.
Combined with other forms of independent payment options and programs,
you can surely maximize your potential to make sales with or without
Visa in the picture. By giving webmasters more options from which
to select, even our customers can begin to unshackle themselves from
the Visa monster.
Expanding Exponentially
The great news is, you pay the Visa fee per ISPS only once, even if
you have multiple sites on which you want to accept Visa! Why make
one, when you can have two? You now have the ability to develop more
pay sites and convert your AVS experiments into big boys (or girls)
and set them free on the 'Net. And even better, more sites create
more property to optimize for search engine traffic. Cross promotion
can be the key to doubling your sales, and you can keep doing what
you do best as a webmaster: serving up heaps of adult entertainment
to hungry surfers knowing your payment options are designed to work
FOR you AND your customers.
There has always been a delicate bridge between webmasters and processors.
A bridge built on years of watching, talking, trying, trusting, and
eventually, success. With the demise of so many billing companies
and payment options it's no wonder many webmasters are jumping ship
before riding out the billing hurdles. For the true survivors, the
hardest part is behind us for now. As we ride out the storm find a
processor dedicated to keeping all its webmasters informed and ready
for anything to come down the 'pike. The sooner your customers are
familiar with having more options, the sooner they will use them.
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