Looking for input/discussion

[123Jason]

Indulge me for a moment if you will. Effective in February, just a couple short months away, Visa/MC will be enforcing a 1% chargeback limit. What I'd like to hear from you is your opinion on how this will affect our industry, the way we do business and what changes you think will need to be made.

We have been fighting for our merchant accounts as long as this industry has been around. And we keep getting them because as much as the banks don't like to be associated with "adult business" they know it makes them money. How do you think these new regulations from Visa/MC will change our access to those merchant accounts. Will all the smaller webmasters be driven out of business or forced to sign up under larger programs?

Looking forward to your feedback.

[Carrie]

Originally posted by 123Jason@Dec 29 2003, 10:05 AM
Indulge me for a moment if you will. Effective in February, just a couple short months away, Visa/MC will be enforcing a 1% chargeback limit.
It was my understanding that their enforcement of that limit went into effect on October 1st of this year.
Or rather, the limit went into effect on October 1st; chargebacks take 3 months to show up which would put the actual "enforcement" from that on January 1st...
Either way, the effect will be much the same that it was when the announcement came out.
Sponsors scrambling to get lots of low-priced transactions to reduce their ratio, other sponsors reducing payouts to discourage fraudsters and chargebacks, and still more sponsors turning up the shave machine and yelling about how they're *raising* payouts.

Some of them will shut down, some won't. *shrugs* Don't put your eggs in one basket, don't rely on just sponsors, be ready to be flexible. Just like any other time in this industry.

[Brad Mitchell]

(sitting here in the office with Jason)

He mis-spoke, that was what he was referring to. The larger question we're both sitting here pondering is who of the large programs, if any, will be the first to fall now that their grace period is over with... And any other speculations on how this will all trickle down and affect the industry.

:yowsa:

Brad

[*KK*]

I'd imagine it will be very simple. Either the programs that can't stay in line will be fined while Visa finds it worthwhile to bother with, or they will be terminated.

There's not much more to it, for the ones that can't stay under the limit.

[Mike AI]

Originally posted by *KK*@Dec 29 2003, 03:45 PM
I'd imagine it will be very simple. Either the programs that can't stay in line will be fined while Visa finds it worthwhile to bother with, or they will be terminated.

There's not much more to it, for the ones that can't stay under the limit.


What percentage of programs do you think will be hit? How many will go down?

It looks to me like some people know they will be going down so they are trying to make as much as they can short term and go out like a supernova.

[mojobill]

Originally posted by Mike AI+Dec 29 2003, 04:24 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Mike AI @ Dec 29 2003, 04:24 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin--*KK*@Dec 29 2003, 03:45 PM
I'd imagine it will be very simple. Either the programs that can't stay in line will be fined while Visa finds it worthwhile to bother with, or they will be terminated.

There's not much more to it, for the ones that can't stay under the limit.


What percentage of programs do you think will be hit? How many will go down?

It looks to me like some people know they will be going down so they are trying to make as much as they can short term and go out like a supernova.[/b][/quote]
Ya, there has been some rumors to that affect floating for several months now.... some programs KNOW they can not/will not meet the criteria, and they are simply going to milk it till the tit runs dry, and fold up shop.....

will be interesting to see who 'they' are.... :huh:

[Carrie]

Look for the ones at Internext pumping the hardest for large *immediate* blocks of traffic who aren't willing to talk about putting it off for a couple of weeks.

[*KK*]

Originally posted by Mike AI+Dec 29 2003, 01:24 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Mike AI @ Dec 29 2003, 01:24 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin--*KK*@Dec 29 2003, 03:45 PM
I'd imagine it will be very simple. Either the programs that can't stay in line will be fined while Visa finds it worthwhile to bother with, or they will be terminated.

There's not much more to it, for the ones that can't stay under the limit.


What percentage of programs do you think will be hit? How many will go down?

It looks to me like some people know they will be going down so they are trying to make as much as they can short term and go out like a supernova.[/b][/quote]
I dont have anyone's specific numbers, being at ePassporte pretty much bypasses that stuff for me these days.

However, I'd be willing to bet that every processor has at least one thats over, some with multiple clients that are over, and its going to depend on what Visa agrees to do with these people, and may in part depend on how hard their processor can lobby for time to get them into line.

It's not easy to take a large program and cut down the cb ratio, it just wont happen overnight, since the very nature of chargeback ratios is a stupid numbers game in itself, akin to a ponzi scheme...

I'd guess that if it's worth it to Visa to fine, they will fine, otherwise they will terminate the programs or sites that cant get into compliance very soon in the new year.