Optimal Billing Options: Breaking Down the Visa Situation
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.
By Cyndalie, VP of Marketing for PSW Billing Solutions
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 like 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 not just adult webmasters want relief from the Visa/MC strangle hold.
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 whom it may apply to when you hear things like “MasterCard will be charging fees to be accepted”, “If you pay will Visa be accepted internationally?”, “Are cancels now counted as chargeback’s?”, and so the stories and questions go on…
If you read or find out information and you are not sure how it affects you, before you spread panic, talk to your processor and ask questions. We’ve all heard a lot of talk, but now it’s time to break down the Visa situation in layman terms.
To accept Visa for US customers you will need to register and pay the $750, 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 setup, and it can all incur 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 the account 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.
For adult webmasters, the best solution if you are going to accept Visa is to apply and become a Sponsored Merchant, pay the fee, get setup 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.
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”? Yes you can, but you have to pay the Visa registration fee through each ISPS you process Visa with. If your Sponsored Merchant account is simply cancelled by the ISPS than 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 setup with both billing companies.
When shopping out billing options you will notice that most companies offer a free setup 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.
If you decide to not to pay the Visa fee and attempt to find a company that has found a “loophole” and not is charging the fee, be cautious. For US webmasters this could turn into a processing nightmare where you end up switching processor 3-4 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 like 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 to select from, even our customers can begin to unshackle themselves from the Visa monster.
The great news is, you pay the Visa fee per ISPS only once, even if you have multiple sites you want to accept Visa on! Why make one, when you can have 2? 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 creates more property to optimize for search engine traffic, cross promotion can be key to doubling your sales, and you can keep doing what you do best as a webmaster: serving up heap-fulls 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 summer slowdown. For the true survivors, the hardest part is behind us for now. As we ride out the storm know that PSW Billing is dedicated to keeping all webmasters informed and ready for anything to come next. The sooner your customers are familiar with having more options, the sooner they will use them.
Cynthia "Cyndalie" Fanshaw is the Vice President of Marketing for PSWBilling.com. An established expert in search engine marketing, Cyndalie has over 5 years experience in the adult Internet industry and working with adult webmasters. For more information about PSW Billing Services please visit http://www.PSWBilling.com or contact Cyn@PSWBilling.com
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