View Full Version : VISA new chargeback/credit ratios
As most of us know we can set our clock to the VISA new rules department - every 6 months new rules... so from October 1, 2003 chargeback to sales ratio must not be more than 1% (current it is 2.5%).
Atleast we got some warning this time (3 months to get chargebacks down to under 1%) - thanks to the brave souls who gave us this information.
spanno
07-01-2003, 05:00 PM
use checks more
Epoch
07-01-2003, 05:07 PM
Originally posted by spanno@Jul 1 2003, 01:08 PM
use checks more
FYI the FED is looking at putting return thresholds on ACH transactions
Clay
Yeah, what Spanno said! :okthumb:
In fact, for all you payites that do not process with us, here's a deal you cannot refuse:
FREE Check processing for 30 days!
FREE real-time verification via StarCheck (where possible).
Processing fees charged on CLEARED checks only!
Full blown, in-house collections department.
Canadian ACH!
There is NO other ACH Processor that can beat this!
spanno
07-01-2003, 05:14 PM
Originally posted by Epoch+Jul 1 2003, 09:15 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Epoch @ Jul 1 2003, 09:15 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin--spanno@Jul 1 2003, 01:08 PM
use checks more
FYI the FED is looking at putting return thresholds on ACH transactions
Clay[/b][/quote]
what sort of time period could that happen over?
Mike AI
07-01-2003, 05:18 PM
Is this the final nail in the coffin?
The 1% is almost impossible to get to, especially when they can reclassify credits as chargebacks as well.
VISA is putting the issue on us, but it is their policies that help create the
situation. Though we all know many in this industry who have been raping surfers for years....
Now is our chance to get more focus on "good" transactions... meaning something, which are less likely to chargeback.
We also have the chance to get more billing options on our sites - ex. US online checks, and local european options.
More "scrubbing" onces people have signed up - done by the paysite itself.
Of course there are alot we can do, which will help bring the chargebacks down, but what Iīm a bit worried about is what kind of effect this will have on processors, and some of the large pay per signup programs, which are playing the number game (cheap trial, high recurring, multiple cross sell, and high payout to webmasters).
Visa does not have a credits policy like Mastercard does. However, what they are asking for is a veritable impossibility for high volume accounts under the current structure. I doubt that Visa would consider instituting the credits policy until they see the outcome of the Paycom/Mastercard suit if they are even considering such a thing.
Peaches
07-01-2003, 05:46 PM
Originally posted by *KK*@Jul 1 2003, 05:51 PM
I doubt that Visa would consider instituting the credits policy until they see the outcome of the Paycom/Mastercard suit if they are even considering such a thing.
Wig and I were talking about this the other day - you have your ear to the ground more than most of us regarding CC processing - is this a case that will reach a resolution ANY time soon?
Oh, and in case anyone missed it - Wig's offered a GREAT sale on ACH processing!!! :gbounce:
TheEnforcer
07-01-2003, 05:51 PM
From mainstream to adult there have been problesm created for VISA/MC from the internet. Of course VISA/MC creates many of their own and often makes those very same problems created by net companies even worse.
Peaches, I guess it sounds too good to be true.... but it is!
This is the problem with checks.... everyone is so focused on their credit card processing they don't take the time to understand checks and maximize them.
but, if there are any ears out there that want to know.... Fire away!
Peaches
07-01-2003, 06:20 PM
Originally posted by wig@Jul 1 2003, 06:25 PM
This is the problem with checks.... everyone is so focused on their credit card processing they don't take the time to understand checks and maximize them.
but, if there are any ears out there that want to know.... Fire away!
Gosh, makes you wonder if that's why one of the largest paysite operators has been moving more and more over to checks in the past few months....good luck or good planning? B)
Mike AI
07-01-2003, 06:32 PM
Wig, we could probably use a good tutorial on check processing. How it can be more effective then credit cards and such.
Maybe come up with a list of common misconceptions about checks, some FAQs, etc....
I know I would like to know more, and would like to stop getting my balls squeezed by the CC companies... but I know checks have some issues as well.
Peaches
07-01-2003, 06:37 PM
Originally posted by Mike AI@Jul 1 2003, 06:40 PM
but I know checks have some issues as well.
Every form of one entity getting money from another has issues - just look at Serge getting the $1000 check from Lensman. :awinky:
But IMHO, it very well may get to the point where ACH is the only game in town for a lot of webmasters. Heck, even 5% of something is better than 0% of nothing! :P And if there's a deal being offered, might as well take advantage of it before the inevitable happens.
I'm sure Wig will mosey on back and give you tutorials, answers, etc - he frightens me with how much he knows about it. I just felt the need to point out the obvious, hehehe (it's been raining all day and I've been cooped up - bear with me :agrin: ).
homegrownmof
07-01-2003, 06:38 PM
Originally posted by wig@Jul 1 2003, 05:25 PM
This is the problem with checks.... everyone is so focused on their credit card processing they don't take the time to understand checks and maximize them.
but, if there are any ears out there that want to know.... Fire away!
Wig,
sent you a PM.
New question- how would you set up a Payperview system with check processing? If it takes days to get funds it doesn't seem feasible.
Marc De
07-01-2003, 06:58 PM
Wow - more shit hits the fan... All I can say is US traffic goes to checks and recurring web900 and all international traffic goes to dialers. In fact of these payment solutions may revenue may excede credit card usage as a whole.
All I know is I will not be held hostage by the largest monopoly and abuse of power in the nation today.
They keep their current management style up and they will will really see they do NOT control all the flow of money. :)
Members values dropping by more than half in the last 2-3 years, stricter rules with HUGE fines for credit card processing and many other factors will force a tidal wave change in this business VERY soon!
Every system has its inherent problems, there is no doubt about that
mof's made a good point -- there are some things that the risk level for using a check becomes an unacceptable one. Reseller fraud with checks is hideous compared to cc's.
If the Fed institutes their limits on what is allowable with returns and other check issues then it's going to be even tighter.
Dialers, sms, alternate billing methods are great for certain traffic but not for others.
One thing I do see is the penalty for credits situation, where they are treated as chargebacks, has to be stopped, whether it's the Paycom suit, someone else's suit or the FTC/state AGs stepping in and investigating it. The biggest point of a credit is that it is designed to reduce the load on the system -- there are no cb processing costs, etc. To utilize it in a manner that assesses punitive damage to a merchant is not something I think to be legal.
Originally posted by Mike AI@Jul 1 2003, 05:40 PM
Wig, we could probably use a good tutorial on check processing. How it can be more effective then credit cards and such.
Maybe come up with a list of common misconceptions about checks, some FAQs, etc....
I know I would like to know more, and would like to stop getting my balls squeezed by the CC companies... but I know checks have some issues as well.
Mike,
ACH is limited by the return window, which is usually 2 business days. We can originate late in the evening, same day and get returns in at each Fed window. These returns are not charge-backs, but rather what we call administrative returns such as NSF, invalid account, closed account, etc...
The ACH system is designed that all transactions are considered good until they are returned. In other words, there is no authorization or positive code returned.
So, that leaves us where Mof is heading.... how do you verify in a real-time manner or otherwise reduce returns. We use StarCheck on all our transactions (free for our managed adult clients) and for about 30% of the DDA accounts it works well. There are also MOD calculations and other ABA to account number nomenclature / structure that can be applied.
The banking system is not standardized and there are 1000's of banks and credit unions that all do shit differently. It takes a while to build a database that can address all the subtleties of ACH and it never ends.
As you know, we only charge on settled checks and there are no return fees or fines or other fees whatsoever. Makes it pretty attractive.
Bottom line is that you make money with checks, despite the cons.
Originally posted by homegrownmof+Jul 1 2003, 05:46 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (homegrownmof @ Jul 1 2003, 05:46 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin--wig@Jul 1 2003, 05:25 PM
This is the problem with checks.... everyone is so focused on their credit card processing they don't take the time to understand checks and maximize them.
but, if there are any ears out there that want to know.... Fire away!
Wig,
sent you a PM.
New question- how would you set up a Payperview system with check processing? If it takes days to get funds it doesn't seem feasible.[/b][/quote]
Mof, I did not get your PM, but maybe I just don't know where to look. feel free to email me danp AT achdebit.com
To better answer your question.... I'm sure that even with credit cards, there is only so high a limit that a guy can go in a given time frame. As he demonstrates an ability to pay, you allow him more purchasing power (and you more risk).
With checks, there is limited real-time verification, but you perform it. You also perform a consumer profiling system like Experian. Then you have to dial down the limits to an acceptable risk (risk being 2-3 BUSINESS days) and run.
If that is too loose for you, there is also an almost foolproof way of account verification, but you sacrifice the impulse purchase. This is a microdeposit (like what you go thru to open your paypal account). You can ACH credit the consumers account with, say, 12 cents and 23 cents and the consumer would have to confirm this "combination" prior to the purchase of any time and initiation of any debit.
The thing to remember about checks is that people use checks because they don't have credit cards NOT because they prefer to use checks! There are an estimated 100 million checking account holders that do not have a major credit card.
Also, performing StarCheck, Experian or using and ACH credit for verification is a one-time event for your customer. After the first check, it is up to you to tell me how much to debit and how many times based on your risk parameters. ;-)
what a fucking joke!
visa are cunts, and like marc de said, if they keep going they are going to realize they aren't the be all and end all of the ecommerce business.
if i owned american express, i'd be jumping in with a HUGE web processing campaign and pick up all those customers that visa is losing ... marc de, can you buy american express or something similar? thanks :biglaugh:
we had a customer the other day who emails us and does the usual 'i never signed up to this' blah blah ... we responded with his sign up info, ip address etc ... he responds with 'who cares if you have that info, all i have to do is ring up my bank and they'll give me my money back'. his attitude pissed me off, so we signed him up to a bunch of porn spam ... scary part is we knew he was right, nothing we could do despite the fact that the moron admitted to fraud right there in the email ...
oh well, here we go again ... another round of big programs is about to either a) disappear or b ) change their payout structure
Peaches, thanks for the kind words. :D
I stepped over to the barn to feed. The rain sucks and it does not look good for the 4th either. ;-(
Peaches
07-01-2003, 09:24 PM
Originally posted by cj@Jul 1 2003, 09:23 PM
if i owned american express, i'd be jumping in with a HUGE web processing campaign and pick up all those customers that visa is losing ...
The whole problem is that they DON'T WANT US. We represent such a small amount of their revenue, but a HUGE amount of their customer service. :(
The thing to remember about checks is that people use checks because they don't have credit cards NOT because they prefer to use checks! There are an estimated 100 million checking account holders that do not have a major credit card.
ALSO remember that if someone has a credit card, the odds that they have a checking account is huge. If you offer up the ACH option first, you get them THERE w/o offering the CC option right off the bat.
If I had a few paysites, which I don't :angry: , I'd run a test for at least a month and offer JUST ACH billing on one and see what the results were. I'm not saying that because I KNOW what the results would be, because I don't, but since we seem to be headed there, I'd like to play with my options beforehand.
The rain sucks and it does not look good for the 4th either. ;-(
Yeah, my rain gage was at 4 inches from last night when I had to DRAG the dogs out and retie the tomato plants. :( But we're STILL not getting it as bad at Atlanta's been for the summer.
Oh - did you get your garage door opener? :zoinks:
Last edited by Peaches at Jul 1 2003, 09:34 PM
Originally posted by Peaches@Jul 1 2003, 08:32 PM
ALSO remember that if someone has a credit card, the odds that they have a checking account is huge. If you offer up the ACH option first, you get them THERE w/o offering the CC option right off the bat.
If I had a few paysites, which I don't , I'd run a test for at least a month and offer JUST ACH billing on one and see what the results were. I'm not saying that because I KNOW what the results would be, because I don't, but since we seem to be headed there, I'd like to play with my options beforehand.
The only problem with this is that we live in a credit driven world and credit cards are credit. It is easy to say, oh, i'll just pay the monthly payment.
ACH is direct debit.... cash, baby!
Also, credit card = world wide. ACH = US
I did get the door opener. Thanks and thanks for feeding the muts!
Originally posted by wig@Jul 1 2003, 08:25 PM
I stepped over to the barn to feed.
:biglaugh:
Did you ride the mule yet today?!
:P
The whole problem is that they DON'T WANT US. We represent such a small amount of their revenue, but a HUGE amount of their customer service.
Visa might not want us, master card might not want us, but their customers do ... there are many people who have credit cards PURELY for buying things online ... there is a HUGE chunk of business up for grabs here, and although we may be just a small drop in the ocean of ecommerce, our industry is big enough (not just porn, all high risk online business like casino's, subscription magazines etc) to warrant a decent billing solution from a major credit card company.
And lets not forget, the only reason we have this problem is that the cc companies ALLOW & ENCOURAGE their customers to commit fraudulent transactions ... the whole thing is a trap, we must have less than 1% chargeback ratios and yet the credit card companies are encouraging people to chargeback and refund any transactions they dont want to pay for.
What's happening with the paycom/mastercard lawsuit? that's the key to our protection, but i'm nervous that its not going to achieve anything except make the general public hate pornographers even more.
I keep hearing that our industry is too small for the big cc companies to care about, and yet a few weeks ago there was a thread here saying that adult internet does in the billions in revenue each year ... i think its a farce, visa probably owns a few porn sites and doesn't want competition
:biglaugh:
sarettah
07-01-2003, 10:32 PM
I think the cc's would love to have the money but they succumb to the politics like everyone else....
I think that Visa/MC should issue a special high risk credit card to people that request it.... Only for online purchases... Maybe a max limit of $500 or $1000... a secure gateway with purchase confirmation via email... Once it is confirmed, it is a done deal, no charging back....
The email confirm would go to the email address that you gave them when you applied for the card.... No free email accounts, that sort of thing...
A "Safe" transaction.....
Why dont all webmasters get together and simultaneously drop VISA/MC and run dialers/checks only.
Short term it may suck, but it will stick it up VISA/MC......and I bet we'll see a more accomodating attitude in the future....and a reversal in chargeback policies.
Run a campaign on the boards
Hooper
07-02-2003, 12:17 AM
and i guess you're willing to forgo millions of dollars in rebills?
Originally posted by un1t@Jul 1 2003, 11:10 PM
Why dont all webmasters get together and simultaneously drop VISA/MC and run dialers/checks only.
Short term it may suck, but it will stick it up VISA/MC......and I bet we'll see a more accomodating attitude in the future....and a reversal in chargeback policies.
Run a campaign on the boards
you first ... the rest of us will follow, promise!
sarettah
07-02-2003, 12:56 AM
Originally posted by Hooper@Jul 1 2003, 11:25 PM
and i guess you're willing to forgo millions of dollars in rebills?
That and having the FTC up your ass over the dialers...
Unit (thanx for changing the avatar btw, the other one was spooky) the dialer solution for domestic U.S. is often frowned upon by the authorities here, so that essentially leaves the U.S. webmaster with only the check solution....
Plus, bringing ALL the sheep into the fold would be nigh on near impossible...
I have a solution mapped out that I have talked to a few people about... But to implement it would take someone with a lotta lotta pipes and a lot of clout with Visa/MC... Thought I had a taker with my old company but they lost their clout with the cc's when a certain company got taken out by the FTC.... I have neither the pipes or the clout or the wherewithall to market the idea effectively myself, so it will sit on the shelf for now ...
If EVERY high risk transaction merchant took a day off from accepting cards, I don't think the cc's would miss it.
They might even like it so much they took their own time out.
There's good that can come of this for companies that are positioned to take advantage of what happens.
I'd imagine the industry leaders like ARS, CEN, or anyone doing over 1000 signups a day can think this through and realize it could become an opportunity to stay on top.
The smaller guys doing a couple hundred joins a day might want to worry though.
KK, I think its the other way around, although you are the expert ;-)
The way I see it, the bigger companies are going to be hit much harder by this, and unless they *really* have their shit together, its :bwave: ... smaller companies with less volume can change their entire business model overnight, without losing all of their webmasters & signups ...
but i'm just guessing ... i have nfc anymore LOL
sextoyking
07-02-2003, 01:35 AM
The weak shall perish, the strong shall survive.
Don't talk of boycott, talk of innovation.
Wtf happ. to our industry. used to have new ideas and products out all the time.
We got lazy :(
Timon
07-02-2003, 02:42 AM
Originally posted by sextoyking@Jul 2 2003, 12:43 AM
Wtf happ. to our industry. used to have new ideas and products out all the time.
We got lazy :(
We got saturated... too many next best things going around to bother with new innovations... ;-(
sextoyking
07-02-2003, 02:52 AM
True, very true Timon.....
Originally posted by cj@Jul 1 2003, 09:40 PM
KK, I think its the other way around, although you are the expert ;-)
The way I see it, the bigger companies are going to be hit much harder by this, and unless they *really* have their shit together, its :bwave: ... smaller companies with less volume can change their entire business model overnight, without losing all of their webmasters & signups ...
but i'm just guessing ... i have nfc anymore LOL
I'm not the expert cj, but I do know this -- the guys doing a couple hundred joins a day for the most part are NOT capable of running a business doing a couple thousand joins a day.
The ones doing a couple thousand a day have already been through so much, they adapt and survive, that's why they do so many signups.
I don't see signups going away, that makes no sense at all.
What I do see is some major changing in the way certain parts of this business are worked.
I imagine a couple of people will get out -- just take what they have and leave the business, retire. I imagine a couple of more will ride it as long as they can and then bail when the fines become too much to handle or the constant battle to find new merch accts is finally lost to them.
I have a good inkling of what MIGHT come... the way I see it there are two basic options, and it creates a market that has a lot of similarities to Nash's game theory and how parts will react with each other.
hibbidiji
07-02-2003, 04:31 AM
hey... I came in late on this one.... the question I have is this:
will the penalty for chargebacks over 1% be fines or termination?
D
Diamond Jim
07-02-2003, 04:40 AM
Originally posted by *KK*@Jul 2 2003, 02:04 AM
I have a good inkling of what MIGHT come... the way I see it there are two basic options, and it creates a market that has a lot of similarities to Nash's game theory and how parts will react with each other.
Those may end up being the options....and if so, we are doomed for sure...cuz getting this group to do what's in the best interest of each other AND the group is about as likely as JR and Forest having the same IQ...
sextoyking
07-02-2003, 04:50 AM
Jim,
I love the sig :)
KK i was reading your threads on GFY and i am one of the few that appreciates the fact that you take the time to share your knowledge - even when it means doing so with so many 14yr old buffoons that can't spell "credit card" much less understand the issues at hand.
i have seen now, many referreces to Verified By Visa . i keep seeing remarks that its a good thing... followed by remarks like "yeah, but they dont support recurring billing" or "unless you are ready to give up recurring billing...."
Does this work well for any business model that is not dependent on recurring billing?
Can users charge these transactions back? or not?
i was reading at Epoch and the Visa site and it seems that almost anyone in the US with a visa card should be able to go to that site, create an username and password and join a site.
am i missing something? or is there some other catch?
I think the tools are already here, so we can all adapt, but it will cost somewhere... Let it be the number of signups, or the overall income per signup.
I wonder what VISA are thinking about doing on these dates:
April 2004
October 2004
April 2005
October 2005
etc.
I guess if they are not making new rules, then they do not think they are working. :(
Diamond Jim
07-02-2003, 05:32 AM
Originally posted by sextoyking@Jul 2 2003, 03:58 AM
Jim,
I love the sig :)
Thanks, Todd... :D
I created a monster several months back and now I have to compete with him in the market, too...
You know who you are, bitch! :hic:
sextoyking
07-02-2003, 05:40 AM
Jim,
I hate those alter ego's :P
well now at least you have an email link in there :)
Originally posted by JR@Jul 2 2003, 01:04 AM
i have seen now, many referreces to Verified By Visa . i keep seeing remarks that its a good thing... followed by remarks like "yeah, but they dont support recurring billing" or "unless you are ready to give up recurring billing...."
Does this work well for any business model that is not dependent on recurring billing?
Can users charge these transactions back? or not?
VbV is pretty much dead for our business JR, unless Visa jumps in and changes their mind. I guess they dont want to give us any options to protect ourselves, but hell I don't really know what they are thinking anyway.
Unless... the rationale for this tightening of the belt buckle yet again is somehow related to the fact that since Visa's overall cb ratio has been and continues to drop, they feel that they can bring each segment of their market further towards zero percent chargebacks? If so I certainly applaud their ability to bring the cb ratio down overall but I still don't understand what they are thinking if they are treating every piece of the puzzle as if it were the same shape and size.
Anyway back to topic.
VbV should have meant that the initial transaction was cb proof, even though the recurrings probably wouldn't have been.
I think one of the reasons that Visa has stepped back and refused to allow high risk to make use of VbV is the way that it is being marketed by its member banks. I have looked over the B of A references to it online and you have to really dig to figure out that you are giving up your right to dispute a charge on the grounds of not being the one who made the charge. Took a page out of our book so to speak.
It's pretty amazing what kind of changes could be wrought from this little change in the rules if you think about it. I'd definitely say there are some issues with monopolies, Sherman, Clayton, restraint of trade, and so on.
But who's going to fight Visa? It would be a long and bloody expensive one, that's for sure.
Dianna Vesta
07-02-2003, 06:45 AM
Originally posted by Mike AI@Jul 1 2003, 05:40 PM
Wig, we could probably use a good tutorial on check processing. How it can be more effective then credit cards and such.
Maybe come up with a list of common misconceptions about checks, some FAQs, etc....
That's a great idea. I'd love to push checks more but I can't seem to get people to choose it as an option. If we had a simple FAQ, something consise that wouldn't distract, I bet it would help.
Now with this 1% thing, I don't see how it's going to work at this stage in the industry. Forget about the people who raped the consumer... now the consumer is educated and the tables have turned.
We get charge backs where they'll charge back 4 to 6 months worth of transactions. Our logs prove they used the service but as you all know we don't stand a chance.
I really hope an alternate payment system becomes available really soon.
What a fucking joke about vbv ... wouldn't you think this would be MOST beneficial in a high risk market!?!?!?!
wtf is going on up there in visa la la land?!
But who's going to fight Visa? It would be a long and bloody expensive one, that's for sure.
paycom is going after mastercard - when they win they have a precedent to go after visa. :agrin: :okthumb:
I think it will be the same it has always been for chargebacks...you will have to continually go over the 1% to get dropped...they have to hand out warnings first.....I think 1% IS attainable if you do not run 100+ sites and cross sell your customers to them or try any slick moves to get them to buy more shit.....I did just over 1000 memberships last month(not a huge #)
and had 7 credits and ZERO chargebacks....
i think it can be done but the model is definitely changing again and the webmaster payout as we know it is going to be gone forever......
Originally posted by cj@Jul 1 2003, 09:28 PM
Did you ride the mule yet today?!
Heya CY... sorry, but my country ass goes to bed around 10pm.
Have been training the baby mule and not riding too much. As you know, Jill is pregnant (btw it's a boy), so she can't ride.
Liberty is coming along really good! You do not ride them until they are atleast two years old, so now is when you teach them the basics on the ground.
I'll put up some pics. She has grown alot!
If I swing past your way soon I will drop by & see for myself
I want to say i've ridden wig's mule ;-)))
How is Jill going? She must be sporting a nice bubble by now - can't wait for the next oprano birth!! :bjump:
Marc De
07-02-2003, 09:18 AM
cross sells chargeback LESS than normal memberships - that is NOT the issue.
My concern is this - anyone doing substantial volume has a HELLUVA time keeping their c/b's below 1% and if you aren't doing substantial volume its much easier to stay below 1%. With that said, if the 'big guys' fall then who do you think will get their volume? The smaller programs still under 1% ? Can those smaller programs pick up the tab for a huge influx in new sign ups? Can they increase their volume rapidly and then keep their c/b's below 1% down the road?
I find one very exciting possibility in all of this. This just may FORCE our model to change (something that has needed to happen for the last year). We need to find a different mouse trap. Selling masses of micro trials and doing everything legally possible to get those to convert so you can recover the huge $40 loss up front just isn't the way to do it anymore. And its the huge $39.99 price tag that hasn't helped the c/b issue in the first place.
We've been in a wicked spin downward for quite sometime and Visa with one simple little rule may be the one to force the correction of that spin and pull us back up! :)
So in the same sentence I say thank you Visa and kiss my ass haha
Peaches
07-02-2003, 09:19 AM
Originally posted by cj@Jul 2 2003, 07:22 AM
But who's going to fight Visa? It would be a long and bloody expensive one, that's for sure.
paycom is going after mastercard - when they win they have a precedent to go after visa. :agrin: :okthumb:
It's going to be a long and bloody fight against MC also.
IMHO, I don't see any resolution on the Paycom/MC suit for AT LEAST 2 years and maybe longer. That's an opinion based on lawsuits, not the CC world, so hopefully I'm wrong..... :(
Timon
07-02-2003, 09:26 AM
What Marc said!
Very well spoken indeed!
Originally posted by Marc De@Jul 2 2003, 08:26 AM
cross sells chargeback LESS than normal memberships - that is NOT the issue.
My concern is this - anyone doing substantial volume has a HELLUVA time keeping their c/b's below 1% and if you aren't doing substantial volume its much easier to stay below 1%. With that said, if the 'big guys' fall then who do you think will get their volume? The smaller programs still under 1% ? Can those smaller programs pick up the tab for a huge influx in new sign ups? Can they increase their volume rapidly and then keep their c/b's below 1% down the road?
I find one very exciting possibility in all of this. This just may FORCE our model to change (something that has needed to happen for the last year). We need to find a different mouse trap. Selling masses of micro trials and doing everything legally possible to get those to convert so you can recover the huge $40 loss up front just isn't the way to do it anymore. And its the huge $39.99 price tag that hasn't helped the c/b issue in the first place.
We've been in a wicked spin downward for quite sometime and Visa with one simple little rule may be the one to force the correction of that spin and pull us back up! :)
So in the same sentence I say thank you Visa and kiss my ass haha
That post is so good it bears repeating especially
Selling masses of micro trials and doing everything legally possible to get those to convert so you can recover the huge $40 loss up front just isn't the way to do it anymore. And its the huge $39.99 price tag that hasn't helped the c/b issue in the first place.
Just an odd thought that crossed my mind, beyond the "brand" protection Visa may be trying to preserve, can Visa be seeing the substancial fine MC has levied and be looking at another revenue stream? I know that's an odd thought but .......
Some other changes I think could happen with this new CB ratio threshold
PPS high end prices come down along with PPS program payout to affiliates, especially if Visa starts levying heavy fines
Significant affiliate programs move to "in-house" promotion and away from free site webmasters - which could drive many small-mid size free site operations out of business ...
or affiliate programs move to provide and control promotional materials and how they can be implemented
Some PPS affiliate programs may chose to walk away from the business or at the very least from the current model they are using
More % partnership affiliate programs and less PPS affiliate programs
Another resurgence in customer relations and service (if you're not doing it already which I hope most are)
Obviously now is the time to rethink your business strategies (including diversification into other payment options if you're not using them already) and have other options in place before October
Wow I have a Master's in the Obvious he he he
Marc De
07-02-2003, 10:07 AM
Vick - a big help would be a simple change that could happen today.
$35-40 / referral dropping to $30 FLAT! and the price going from $39.99 per month to $29.99 or $24.99
But that would be a short term fix. We have a payment method that isn't new but isn't use in premium content paysites yet. We've been working on it for a while and it will be ready soon. I think its the answer, but my competitive nature will keep that behind sealed lips (or restrained fingers).
Originally posted by cj@Jul 2 2003, 07:56 AM
If I swing past your way soon I will drop by & see for myself
I want to say i've ridden wig's mule ;-)))
How is Jill going? She must be sporting a nice bubble by now - can't wait for the next oprano birth!! :bjump:
Jill is doing great. She has not been sick once and at 4 1/2 months has got a little basketball working! :D
I sure hope you get a chance to visit someday. I definitely would like to get a picture of you on Jack!
Originally posted by Marc De@Jul 2 2003, 08:26 AM
I find one very exciting possibility in all of this. This just may FORCE our model to change (something that has needed to happen for the last year). We need to find a different mouse trap. Selling masses of micro trials and doing everything legally possible to get those to convert so you can recover the huge $40 loss up front just isn't the way to do it anymore. And its the huge $39.99 price tag that hasn't helped the c/b issue in the first place.
We've been in a wicked spin downward for quite sometime and Visa with one simple little rule may be the one to force the correction of that spin and pull us back up! :)
So in the same sentence I say thank you Visa and kiss my ass haha
hahahhaha
i dare you to write that on your ass Marc LOL
I totally agree with you ... this is the beginning of this business becoming legitimate and more professional ... all those idiots from the dot com days who invested capital in porn companies in the last 2 years should have waited until now.
I am more excited about the industry now than I have ever been - there is so much that can be done now that we are all being forced to abide by a set of rules.
My concern is this - anyone doing substantial volume has a HELLUVA time keeping their c/b's below 1% and if you aren't doing substantial volume its much easier to stay below 1%.
this is why I don't believe being one of the 'big boys' is going to be enough this time ... imho the big companies are the biggest targets for these rules, and while smaller companies can hover under radars, its the big companies who get the attention.
however, 1 big company equals 20 medium companies, 50 small companies etc ... the effect on webmasters if small programs topple is very little, but if a major sponsor goes, the payout model will start to drop and the payout offers of the medium and smaller guys will start to look more attractive
i've made this point here before in more detail - 1% of a really high number is still a really high number - visa's % point is just pulled out of their ass - at the end of the day, if the NUMBER (not %) of chargebacks you are doing exceeds a certain amount you are gone.
With that said, if the 'big guys' fall then who do you think will get their volume? The smaller programs still under 1% ? Can those smaller programs pick up the tab for a huge influx in new sign ups? Can they increase their volume rapidly and then keep their c/b's below 1% down the road?
I think this has been happening since early to mid last year ... i think we are going back to the beginning of the cycle to do it properly LOL not enough people went out of business, time to do another round of weeding!!
This is such an important point that you have made, and i don't think many of the 'medium' companies realize what happens when you get 1000 more signups per day than you budgeted for ... all is fine for about 3 months, chargebacks come in and its :bwave:
oh well, its been too easy up until now anyway
time for a real challenge
:biglaugh:
Marc De
07-02-2003, 10:35 AM
:bwave: :bwave: :bwave:
Now that guy rules - you are the weakest link :bwave:
Business is about change - staying in business is being flexible to go with the change. Talking about things outside of your influence is really a waste of breath. Worry about what you can influence, deal with the circumstances and adjust to stay competitive (and for some the more difficult task of STAYING IN BUSINESS).
Remember there is a positive to everything. Some people just can't wade through the negatives to see it.
Mike AI
07-02-2003, 10:59 AM
I think Marc is right, there needs to be a business model change.
The "inflation" in this industry is what has helped drive us to this point. Programs had to keep increasing payouts to webmasters to keep them sending traffic, while at the same time had to make sure they made a profit. So they started banging surfers credit cards hard. Of course many
times the programs also shaved.
This inflation, has created a very unstable business model... one that VISA is about to slap down.
Maybe this will finally force the industry to reform somewhat I do not have much faith in the many cockholsters in this industry who have raped and pilaged in the past....
puchih
07-02-2003, 11:47 AM
Originally posted by Marc De@Jul 2 2003, 05:26 AM
cross sells chargeback LESS than normal memberships - that is NOT the issue.
My concern is this - anyone doing substantial volume has a HELLUVA time keeping their c/b's below 1% and if you aren't doing substantial volume its much easier to stay below 1%. With that said, if the 'big guys' fall then who do you think will get their volume? The smaller programs still under 1% ? Can those smaller programs pick up the tab for a huge influx in new sign ups? Can they increase their volume rapidly and then keep their c/b's below 1% down the road?
I find one very exciting possibility in all of this. This just may FORCE our model to change (something that has needed to happen for the last year). We need to find a different mouse trap. Selling masses of micro trials and doing everything legally possible to get those to convert so you can recover the huge $40 loss up front just isn't the way to do it anymore. And its the huge $39.99 price tag that hasn't helped the c/b issue in the first place.
We've been in a wicked spin downward for quite sometime and Visa with one simple little rule may be the one to force the correction of that spin and pull us back up! :)
So in the same sentence I say thank you Visa and kiss my ass haha
We have a program called Chargeback Combat. With this service we give, you donīt have to worry any more about having the chargebacks over the 1%.
There will always be some people/companies who are pushing the rules to their max, and then sometimes break them - this will also happende with the new VISA rules... so we will probably have even more strict rules in april 2004.
IMHO - If we as an industry could get the total % of VISA and Mastercard transactions down, and introduce more/new billing options, then I think we will stand much more strong next time VISA/Mastercard decied to change the rules. We have been keeping to much of our processing in the VISA/Mastercard basket - time to spread the risk, and make more money in the process :)
Originally posted by puchih@Jul 2 2003, 10:55 AM
We have a program called Chargeback Combat. With this service we give, you donīt have to worry any more about having the chargebacks over the 1%.
More info please
Is this a service, a program ect....
Do you guarantee it?
What type of guarantee?
Mike AI
07-02-2003, 12:51 PM
Vick I was wondering the same thing. I went to the website, but its not that informative. Very generic, and non specific. ( which I can understand for a public website)
I too am curious what these people can do.
So puchih come back and talk....
BradShaw
07-02-2003, 12:57 PM
This may be one of those times it is better to be a medium size program, rather than a big guy. I agree, doing 1000's of joins a day, impossible to stay under 1%. But it is almost possible if you manage your webmasters and traffic and find the right mix, on a small scale.
Peaches
07-02-2003, 01:05 PM
Originally posted by BradShaw@Jul 2 2003, 01:05 PM
This may be one of those times it is better to be a medium size program, rather than a big guy. I agree, doing 1000's of joins a day, impossible to stay under 1%. But it is almost possible if you manage your webmasters and traffic and find the right mix, on a small scale.
I would think the TYPE of site you have helps also. Some of the personal amateur sites and fetish sites seem have way above average retention and low chargebacks.
puchih
07-02-2003, 01:11 PM
Originally posted by Vick+Jul 2 2003, 08:37 AM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Vick @ Jul 2 2003, 08:37 AM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin--puchih@Jul 2 2003, 10:55 AM
We have a program called Chargeback Combat. With this service we give, you donīt have to worry any more about having the chargebacks over the 1%.
More info please
Is this a service, a program ect....
Do you guarantee it?
What type of guarantee?[/b][/quote]
Sorry to toot my own horn here, but AdultRep has been helping clients with
chargeback problems for some time now. None of our clients have ratios over
1% and if your paysite is operating ethically -- canceling accounts when
customers request it, disclosing that transactions are recurring, and making
cross-selling very obvious -- there is no reason for chargebacks to be above
1%.
We have clients that go some months with 0 chargebacks. These aren't tiny
sites either. Just last month, one of our 2000 member sites had 0
MasterCard chargebacks. Their Visa ratio was 0.5%. When our clients do get
chargebacks, we call the cardholders and ask them what the problem was.
Usually they just forgot about the charge and we convince them to drop the
chargeback.
One of our clients who had his own merchant account had a serious problem
scrubbing foreign transactions, so we put in a callback program and we
called every new foreign customer to see if they authorized the transaction
and if they knew the terms (monthly rebilling, etc). We have reps that
speak Spanish, Portuguese, and French, so we're covering much of the EU and
all of North and South America in the customers' native language, making it
very easy for us to deal with international customers.
Anyone who is committed to operating honestly really has nothing to fear
about these chargeback problems. I know our clients are sleeping easier at
night knowing that someone is handling their chargeback problems for them.
As long as you're not using any kind of shenanigans, AdultRep can make a big
dent in your chargeback ratio.
Let me know if I can help.
Originally posted by Marc De@Jul 2 2003, 05:26 AM
cross sells chargeback LESS than normal memberships - that is NOT the issue.
My concern is this - anyone doing substantial volume has a HELLUVA time keeping their c/b's below 1% and if you aren't doing substantial volume its much easier to stay below 1%. With that said, if the 'big guys' fall then who do you think will get their volume? The smaller programs still under 1% ? Can those smaller programs pick up the tab for a huge influx in new sign ups? Can they increase their volume rapidly and then keep their c/b's below 1% down the road?
I don't see it, no. Someone who's able to do a few hundred, i.e. less than 500 joins a day without cross sells, especially if they've never done more, is not going to be able to manage 1000 a day any better, actually my money is on worse, than someone who's been managing 1000+ a day for at least a year.
That cycle will be a simple one -- someone ramps up, stays there for a couple months and boom! they're done and gone.
Just being a big guy won't get you through this one no -- but having been a big guy for some time will probably give you insight into the situation and thoughts of how to manage the business into longer term profitability.
ALL programs, tho, no matter how big or small, will be affected by this. Between the trickle down effect and a few other factors, no one is going to be immune, except maybe the little guy doing 10 joins a day on his own merchant account.
Mike AI
07-02-2003, 05:34 PM
puchih that was a nice commercial, but we at Oprano want to know the real deal.
What kind of solutions do you have specificlly for the US? To help combat the VISA 1% issues? You use the phrase "for some time now" what is that months? years? Exactly how long?
How do you charge? Do you have a guarantee? What kind?
Do you have references? Anyone that is well known that we can talk to?
Originally posted by Marc De@Jul 2 2003, 09:43 AM
Talking about things outside of your influence is really a waste of breath. Worry about what you can influence, deal with the circumstances and adjust to stay competitive (and for some the more difficult task of STAYING IN BUSINESS).
Remember there is a positive to everything. Some people just can't wade through the negatives to see it.
Marc, this is about the best advice possible ... not just for business, but for life.
Worrying about things you can't influence just clouds your head for dealing with the real issues. I went around in circles last year because of this, trying to do things I had no control over & not focusing on the things that are obvious to me.
There's nothing we can do about visa's rules, we can talk about it all we like but we know nobody in our business will stand up to them - we also know that people are going to buy porn no matter what - if we can't charge them with visa, they will pay with something else.
puchih, I too am curious about your service - awesome idea, and you picked a good time to drop by with a commercial ... I have a couple of questions in addition to mike's which I am also curious about.
how does this work with a 3rd party processor? do you have a relationshp with them where they will share the information of an attempted chargeback with you before they simply press the 'issue' button? can it only be used with a merchant account?
We have clients that go some months with 0 chargebacks. These aren't tiny
sites either. Just last month, one of our 2000 member sites had 0
MasterCard chargebacks. Their Visa ratio was 0.5%.
I wouldn't consider this to be that impressive, if the site only has 2000 members then its pretty easy to manage ... what about 5000 members, 10000 members, etc - do you have any experience with volume above 2000 members?
how much do you charge for your service?
what % of attempted chargebacks does your service eliminate? i would imagine its quite significant as it would scare the shit out of someone about to commit fraud - that part i am very curious about.
just saw this in the ibill news section of the cmi
Last Updated: Friday 30 May 2003 at 9:23 AM U.S. Eastern Time
--------------------------------------------------------------------------------
Verified by VISA Program
Soon iBill will offer the opportunity for its clients to participate in the Verified by VISA program. This new feature allows consumers to create a unique password that will be required at the point of purchase. When the end user attempts to make an Internet purchase, special software installed on the signup page will recognize VISA cards that have been registered. The consumer will then be prompted to key their unique password before a purchase can be approved. The entire process is web-based, so there is no need for consumers to install software.
Merchants who choose to participate in the program will receive added fraud and chargeback protection at no cost. Please visit VERIFIED BY VISA for more information on how the program works and the value-added benefits to merchants.
i'm confused, KK, didn't you say they wouldn't be offering this service to our industry?
Originally posted by cj@Jul 2 2003, 05:24 PM
just saw this in the ibill news section of the cmi
Last Updated: Friday 30 May 2003 at 9:23 AM U.S. Eastern Time
--------------------------------------------------------------------------------
Verified by VISA Program
Soon iBill will offer the opportunity for its clients to participate in the Verified by VISA program. This new feature allows consumers to create a unique password that will be required at the point of purchase. When the end user attempts to make an Internet purchase, special software installed on the signup page will recognize VISA cards that have been registered. The consumer will then be prompted to key their unique password before a purchase can be approved. The entire process is web-based, so there is no need for consumers to install software.
Merchants who choose to participate in the program will receive added fraud and chargeback protection at no cost. Please visit VERIFIED BY VISA for more information on how the program works and the value-added benefits to merchants.
i'm confused, KK, didn't you say they wouldn't be offering this service to our industry?
Yeah, I'd say that soon is relative to how long they've had that up there cj -- I've got two really good sources saying it's not going to happen, I think someone at IBill put that up there and then didn't realize it was still there...
The more I think about this, the more I think of this.
I've talked to a bunch of people, been doing some reading and research, and for me personally I don't mind this whole thing a bit, it opens up some new opportunities that would never have been cost effective to look at before now. For some of my acquaintances, friends and err, non-friends, it could get really sticky. Can't say I'd wish the worst on anyone but there will be many that get nailed in the crossfire.
There is a way to work this, I've no doubt of that.
As one of my very best friends said to me in some hilariously funny circumstances a few months ago...
don't overlook the obvious.
you mean ibill has out of date incorrect information on their site?!?! :zoinks:
never!!!! :zoinks:
LOL
i figured it was something like that but fuck, talk about confusing the already confused!
'dont overlook the obvious' ... so true ;-)
el pres
07-03-2003, 08:05 AM
With the huge fines being levied for going over the CB/refund ratio,
what is the actual cost of a CB/refund?
How difficult would it be to set up within the US some sort of third party confirmation of name, address and phone number that agrees to the name of the card holder.
Maybe having an automated system where the subscriber has to dial a number to receive their password.
Before they are given the password they listen to a recorded message telling them their name and address has been entered into your system, and that any charge back relating to your services will be investigated,
and if found fraudulent will be prosecuted.
If one or two cases can be proven and documented will it make other people think about charge backs,
yep it's expensive to prosecute but so are the fines, if you can show it will happen, would it stop others from charging back so easily.
puchih
07-03-2003, 12:35 PM
Mike AI:
puchih that was a nice commercial, but we at Oprano want to know the real deal.
Mike & CJ,
I always give it straight. Ask me a fair question, I have fair answers. Lets take your questions one by one.
What kind of solutions do you have specificlly for the US?
For reducing US-based chargebacks, we start by looking for a positive AVS & CVV2 response. If you've received a Visa chargeback with reason code 461 or a MasterCard chargeback with reason code 537, that should be enough for the acquiring bank to re-present the chargeback to the issuing bank. Of course, some acquiring banks will not act on this information, but others will. Before we take on any client, we have them send a registered letter to their acquiring bank to get a formal copy of the chargeback re-presentment procedures. We adapt our process to fit the specific acquiring bank of our client.
We don't stop there, however. For banks that don't accept AVS/CVV2 as proof, we contact the customer directly and we ask them to drop the chargeback and obtain a refund directly from us, the merchant. This approach frequently works. Again, depending on the merchant bank, we get the customer to send us an e-mail with his driver's license number as confirmation or, if the bank won't take that as proof of a customer's intent to drop a chargeback, we send the customer a pre-filled auth form by mail that he needs to sign and return to us. Once we get that, we send it to the merchant bank.
If we fail to reverse the chargeback due to the customer being uncooperative, we proceed with collection activity to recover the amount chargedback plus the chargeback fee. We start with letters from our in-house collection agency and we progress to registered letters from an attorney's office. Hope this clears things up about our process for US-based chargebacks.
You use the phrase "for some time now" what is that months? years? Exactly how long?
The company has been in business since April of 2002.
How do you charge?
We usually charge a fixed price per active-recurring member per month. For the purpose of an example, let's say your site finishes up the month with 1000 active members and your price is $1.50 per member. Your cost for that month would be $1,500. Of course, $1.50 is just an example. The actual per-member price depends on the number of services you buy and a number of other factors. We don't have standard pricing and it really depends on what the client is looking for.
Do you have a guarantee? What kind?
We do not have a guarantee for our Chargeback Combat service. We do guarantee a few of our other services. The reason for this is that the success rate is variable -- even if we used the exact same procedures for our clients. The reason for this is the acquiring banks and their chargeback re-presentment policies. If all banks offered a standard procedure for this, we could offer a guarantee.
Do you have references?
Some of our clients have been nice enough to volunteer to speak with our potential customers. I won't abuse that by posting their contact info in the boards, however. For serious inquiries we do provide references.
how does this work with a 3rd party processor? do you have a relationshp with them where they will share the information of an attempted chargeback with you before they simply press the 'issue' button? can it only be used with a merchant account?
Currently we are not working with any 3rd party processors. All our Chargeback Combat clients have their own merchant accounts. And no, we don't have any relationship with a third party processor to get their chargeback information. Since we have to be in direct contact with the merchant bank in order to reduce the chargebacks, we doubt any third party processors would allow us that kind of access, so we haven't asked them for it.
But if the reason people are holding off on a merchant account is due to a fear of chargebacks, I can assure you that they will be lower with the combination of Chargeback Combat plus a merchant account than they will with a third party processor. When our clients have a merchant account, we can really get active about fighting the chargebacks.
I wouldn't consider this to be that impressive, if the site only has 2000 members then its pretty easy to manage ... what about 5000 members, 10000 members, etc - do you have any experience with volume above 2000 members?
There is no difference at all between a site with 1000 members and a site with 100,000. The reason is that we approach each chargeback individually. When we're reversing a chargeback, the only thing that matters is the information that we have about that individual chargeback. Yes, we do have experience with sites over 2000 members. I was just using that as an example because we reversed every chargeback for that month. We were pretty proud about that. And remember, when you put all our clients together, collectivly, we're managing thousands upon thousands of members every month. So, even a site with 20,000 members is not a huge amount for us. :)
how much do you charge for your service?
I covered pricing on Mike's question. If you want me to have a look at your situation and give you a quote, please let me know.
what % of attempted chargebacks does your service eliminate?
Again, it varries from client to client depending on the merchant bank. As long as we're working with a reasonable merchant bank that gives us clear guidelines on their chargeback policies and follows through on their guidelines (i.e. if they tell us they'll reverse a chargeback with a cardholder e-mail, they actually do it once we produce that), we can do a good job for clients. I feel as though we've done a good job for clients when we reduce thier current chargeback ratio anywhere between 35-55%. I don't think this is an unreasonable target to shoot for, as long as we're working with a good bank. And yes, we exceed this with some clients who are very serious about chargeback reduction and are willing to do whatever it takes, such as callbacks for all new sign-ups.
i would imagine its quite significant as it would scare the shit out of someone about to commit fraud - that part i am very curious about.
We get some surprised phone calls once we start sending out collection letters. A lot of people pay after they get the letter from the attorney's office. That scares some people. But really, our goal is not to scare people. We are very polite with people until they refuse to work with us. We go out of our way to explain how the customer didn't need to chargeback at all and they can just get their refund from us.
Quite a few people are perfectly willing to go this route and there's no reason for us to get nasty with them. We only get forceful with people when they won't do what we ask.
I hope this answers everyone's questions about Chargeback Combat. If there are others, feel free to contact me or post it here. If you have a question specific to your situation (i.e. pricing for your site) it would be better to contact me so we can discuss in-depth what we can do for you.
puchih, do you do anything with ACH?
We usually charge a fixed price per active-recurring member per month. For the purpose of an example, let's say your site finishes up the month with 1000 active members and your price is $1.50 per member. Your cost for that month would be $1,500. Of course, $1.50 is just an example. The actual per-member price depends on the number of services you buy and a number of other factors. We don't have standard pricing and it really depends on what the client is looking for.
puchih, thanks heap for those explanations, it helped a lot to understand the use of your service ...
the above point is the only one i'm not clear on ... the way i interpret this is that we pay you according to how many members we have, not how many of those members you actually have to work with ... it seems to me that this pricing is so that you can take a piece of my member base instead of just charging me for chargebacks and/or members that you actually have to deal with ...
am i interpreting that right?
puchih
07-04-2003, 02:16 AM
Thanks for the replies. Wig & cj, let me address both of of your questions below:
do you do anything with ACH?
Yes, we do, actually. We haven't done any "chargeback" type activity (i.e. customers who reverse a settled ACH transaction). What we are doing is going after customers for NSF transactions. In fact, we're very successful getting money from NSF transactions. Remember, in the United States it is a crime to bounce a check. I'm going to use you as an example wig...
Suppose you bounce a check with one of our clients. Our mission is now to recover the NSF fee for our client (usually about $3-4 depending on the processor) along with a little bonus. So, we do a little digging. By looking at your sign-up informtion and phone number, we will find out where you live. Let's say you live in Austin, Texas. I know that you're in Travis county. I also know that the county attorney for Travis county is David Escamilla. Our in-house collection agency has a copy of the NSF laws for every state, so I know that in the state of Texas, failure to pay me on an NSF check within 10 days after notice by certified mail is prima facie evidence of intent to defraud, which makes passing the NSF a misdemeanor crime under Sections 31.03, 32.41, and 132.9022.
I will then send a registered letter to the address I have on file for you stating what I just said above. I'll also be calling you just to make sure you know. My letter will state that if you don't pay me within 10 days, I will turn over all evidence of the NSF transaction for prosecution under Texas law to the office of:
The Honorable David Escamilla
314 W. 11th St., #300
Austin, TX 78701
Phone: (512) 854-9415
Fax: (512) 854-9316
Imagine for a minute you got a letter to that effect in the mail -- with a notice that the NSF would be turned over to your local county attorney. Would you pay? I bet you would. Most of our clients' NSF customers pay also -- they get back whatever the amount of the transaction was, plus a $20 NSF fee that we ask for. Usually their ACH provider is charging them way less than $20 for an NSF item, so they're making some money here.
Just like with chargebacks, we give them a polite e-mail first asking them to mail in payment. We never get nasty until the customers stop doing what we ask. Hope this clears things up with regards to ACH.
the way i interpret this is that we pay you according to how many members we have, not how many of those members you actually have to work with ... it seems to me that this pricing is so that you can take a piece of my member base instead of just charging me for chargebacks and/or members that you actually have to deal with ...
am i interpreting that right?
Not exactly. If you were just to purchase the Chargeback Combat service, I'd either charge you a flat rate per chargeback we handle or give you a flat fee for a range (say... between 100-150 chargebacks per month). However, most of our clients (well over 90%) choose to buy our other services as well.
When we do anti-attrition work and customer care work for sites, we typically come into contact with 25% of a site's member-base in any given month. That may sound high to you, but think about how many declined transactions there are -- we're calling all those people asking for a new card number. Imagine you had a live chat button on your site, avaliable for members to use at any time they want, to ask whatever they want. They make good use of that. The vast majority of our customer care reps are female, so we have some customers who just call every week to have someone to talk to. We're always very polite with people and if they want to talk to a girl on the phone for 10 minutes, we're not going to hang up on them -- as long as it keeps customers with your site longer.
When you add everything up, on a 5000 member site, we can come into contact with 1300 customers in the month via e-mail, online chat, by phone, by mail, etc. Sometimes we have to call or e-mail a customer 3 or 4 times just to get a response. It would be extremly burdensome for us to bill based on a per-contact scenario. Can you imagine getting a bill in the mail with 4000 line items with different prices depending on the contact method, whether we made contact with the customer, how long we talked with him, etc.
We find a member-based bill to be fair for all concerned. The amount of work we do increases or decreases as the member-base to the site increases or decreases, so we find that it is a good way to approach things. As a side note, we do log every e-mail, phone call, chat session, chargeback, etc. So, we have records of all incoming/outgoing contacts that we make. Our reports to clients summarize everything we've done for them for the month.
Thanks again for the questions. Let me know if there are any more. Have a good 4th!
Originally posted by puchih@Jul 4 2003, 01:24 AM
Yes, we do, actually. We haven't done any "chargeback" type activity (i.e. customers who reverse a settled ACH transaction). What we are doing is going after customers for NSF transactions. In fact, we're very successful getting money from NSF transactions. Remember, in the United States it is a crime to bounce a check. I'm going to use you as an example wig...
Suppose you bounce a check with one of our clients. Our mission is now to recover the NSF fee for our client (usually about $3-4 depending on the processor) along with a little bonus. So, we do a little digging. By looking at your sign-up informtion and phone number, we will find out where you live. Let's say you live in Austin, Texas. I know that you're in Travis county. I also know that the county attorney for Travis county is David Escamilla. Our in-house collection agency has a copy of the NSF laws for every state, so I know that in the state of Texas, failure to pay me on an NSF check within 10 days after notice by certified mail is prima facie evidence of intent to defraud, which makes passing the NSF a misdemeanor crime under Sections 31.03, 32.41, and 132.9022.
I will then send a registered letter to the address I have on file for you stating what I just said above. I'll also be calling you just to make sure you know. My letter will state that if you don't pay me within 10 days, I will turn over all evidence of the NSF transaction for prosecution under Texas law to the office of:
The Honorable David Escamilla
314 W. 11th St., #300
Austin, TX 78701
Phone: (512) 854-9415
Fax: (512) 854-9316
Imagine for a minute you got a letter to that effect in the mail -- with a notice that the NSF would be turned over to your local county attorney. Would you pay? I bet you would. Most of our clients' NSF customers pay also -- they get back whatever the amount of the transaction was, plus a $20 NSF fee that we ask for. Usually their ACH provider is charging them way less than $20 for an NSF item, so they're making some money here.
Just like with chargebacks, we give them a polite e-mail first asking them to mail in payment. We never get nasty until the customers stop doing what we ask. Hope this clears things up with regards to ACH.
Thanks for the reply. WTS actually does all this currently for our Merchants.
Perhaps there is a strategic alliance opportunity for us in another area. Will you be in Florida?
Frank
07-06-2003, 06:12 AM
I wonder why a cooperative in the adult biz hasn't got together and created their own credit card. It surely needs doing now before Visa/MC become totally unusable due to unrealistic terms. Make the card Internet only - get all the paysites you can to accept it as a payment option - try to get as many non-adult as possible too to increase take-up.
It could start as a debit card whereby all payments are ACH'd straight away from the users' bank account - any defaults and the card is suspended until payment is received. Good paying customers start to get offered credit once you have assessed their riskworthiness. They maybe only get ACH'd once they have built up $100 or $200 or $500 - or maybe just once per month.
The most you can lose initially is a little bandwidth before the card is suspended. ACH processors are plentiful so you can easily have that side set up. All you need is a bullet proof internet site to handle all of this.
Give it 5 years and maybe you can give MC/Visa the finger! :)
Frankie
Timon
07-06-2003, 08:12 AM
Frank, sounds good in theory but there's a BIG catch22 problem...
If no surfers have this card no paysite operator will bother adding it to his site.
If no paysite accepts this card as a payment option no surfer will bother obtaining this card.
Breaking through a catch22 takes an 8 to 9 digit marketing budget and even then it's likely to fail ;-(
puchih
07-08-2003, 11:18 AM
Originally posted by Frank@Jul 6 2003, 02:20 AM
I wonder why a cooperative in the adult biz hasn't got together and created their own credit card. It surely needs doing now before Visa/MC become totally unusable due to unrealistic terms.
Frank, I donīt think that Visa terms are unrealistic. Our clients donīt have a problem to comply with the new rules by October 1st. All of them are below the 1%.
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