Payment Processing Co-Op

[acratophorum]

With all this crap happening in the payment processing industry, program owners should come together, pool resources and create a payment processing co-op. Every webmaster that processes with the co-op is a co-owner. All co-owners vote for board members, who are responsible for overseeing management....

What do you guys think?

[Barefootsies]

Interesting concept.

When you look at this industry as a whole, there are a lot of vermin that you would not open a door for, much less go into business with. Not to mention all of those who'd stab their own grandmother in the back for a nickel.

It would be nice if some of the bigger companies, and programs would pool for this. But then the next obsticle you'd have to overcome would be the power struggle.. or better yet.. POWA done by Vader in James Earl jones voice as you would have all the different people fighting to be at the head of the table for the power of it. This industry is packed to the high heavens with ego maniacs.

Don't get me wrong, it's a brilliant idea, and I would support such a movement.

Sadly it woud fail because it makes too much sense.

[acratophorum]

Originally Posted by Barefootsies

Interesting concept.

When you look at this industry as a whole, there are a lot of vermin that you would not open a door for, much less go into business with. Not to mention all of those who'd stab their own grandmother in the back for a nickel.

It would be nice if some of the bigger companies, and programs would pool for this. But then the next obsticle you'd have to overcome would be the power struggle.. or better yet.. POWA done by Vader in James Earl jones voice as you would have all the different people fighting to be at the head of the table for the power of it. This industry is packed to the high heavens with ego maniacs.

Don't get me wrong, it's a brilliant idea, and I would support such a movement.

Sadly it woud fail because it makes too much sense.

I thank you for the reply

The way it would probably work is that the top dogs in the business would come in and pool their resources. So, let's say 5 big programs put up seed capital...each of these 5 companies put their reps on the board. Again, the board is responsible for hiring/overseeing management.

So, in the beginning, the co-op would be controlled by these 5 big players...but as more programs adopt the co-op, the 5 players gradually lose their ultimate control because every co-op member is an owner with a voice and a vote.

In the end, the co-op is not out to make a profit of like $100,000,000/year... so it doesn't need to charge 15%... plus, there would be complete transparency....The way I see it, how can it be bad?

[Barefootsies]

Originally Posted by acratophorum

I thank you for the reply

The way it would probably work is that the top dogs in the business would come in and pool their resources. So, let's say 5 big programs put up seed capital...each of these 5 companies put their reps on the board. Again, the board is responsible for hiring/overseeing management.

So, in the beginning, the co-op would be controlled by these 5 big players...but as more programs adopt the co-op, the 5 players gradually lose their ultimate control because every co-op member is an owner with a voice and a vote.

In the end, the co-op is not out to make a profit of like $100,000,000/year... so it doesn't need to charge 15%... plus, there would be complete transparency....The way I see it, how can it be bad?

Interesting.

Well you would lose people again because in the last part of your thought process, you are illiminating the 'greed' quotant (profit, wealth, golden parachutes) and then you are talking about a 'for the good of the industry' where a vast majority of the industry, as you can see on this very board, if out for themselves, and their phat.. yes P-H-A-T bank accounts. Oh, and then the consortium, so there would be no grand wizard to brag about all of the POWA they possess, and could crush everyone like and ant, or that when they sneeze the industry catches cold.

But I like your idea all the same.

[acratophorum]

Originally Posted by Barefootsies

Interesting.

Well you would lose people again because in the last part of your thought process, you are illiminating the 'greed' quotant (profit, wealth, golden parachutes) and then you are talking about a 'for the good of the industry' where a vast majority of the industry, as you can see on this very board, if out for themselves, and their phat.. yes P-H-A-T bank accounts. Oh, and then the consortium, so there would be no grand wizard to brag about all of the POWA they possess, and could crush everyone like and ant, or that when they sneeze the industry catches cold.

But I like your idea all the same.

I hear ya...this idea is in the best interest of the industry as a whole...as such, the top dogs have the most to lose and the most to gain...I have to believe that the top dogs would be interested.

I'd love to hear what others have to say about this...How bout you Barefootsies??

[Klen]

Indeed,i heard payment proccessing script cost only 100$.So i think webmasters should unite their financies and create new payment processor with lower fees.

[ForteCash]

Yeah, this industry is by far its own worst enemy

[acratophorum]

Originally Posted by KlenTelaris

Indeed,i heard payment proccessing script cost only 100$.So i think webmasters should unite their financies and create new payment processor with lower fees.

Right on!

Lower fees, plus various committes on board to ensure company stays in compliance with Visa & MC.

[acratophorum]

Billers take 15% of revenues...that is not a service supplier, that is a friggin partnership.

[CaptainHowdy]

Originally Posted by acratophorum

Billers take 15% of revenues...that is not a service supplier, that is a friggin partnership.

...

[vicki]

I'm not sure why someone would need a co-op when they can simply get their own direct merchant account with a bank.

You never have to worry about ego's, voting, or rates ... what am I missing??

[vicki]

Originally Posted by KlenTelaris

Indeed,i heard payment proccessing script cost only 100$.So i think webmasters should unite their financies and create new payment processor with lower fees.

I don't know about the price of scripts but I do know that to become a certified processor you need to be PCI compliant, be registered with the card associations etc ... there are alot of fees involved that many might not be aware of.

[acratophorum]

Originally Posted by vicki

I'm not sure why someone would need a co-op when they can simply get their own direct merchant account with a bank.

You never have to worry about ego's, voting, or rates ... what am I missing??

MAs are contingent on volume, often credit history etc... very complicated. People go with 3rd party processors because of simplicity....

[acratophorum]

Double Post...sorry folks.

[acratophorum]

bump...common folks!

[WDjay]

Originally Posted by KlenTelaris

Indeed,i heard payment proccessing script cost only 100$.So i think webmasters should unite their financies and create new payment processor with lower fees.

Its so much more than that. Getting and keeping High risk bank accounts, risk mgnt, etc. If it was that easy....everyone wolud already be doing it

[tony286]

its not a set and forget type of thing , you would still have to have staff . Customer people ,admin, someone to management the account. That much processing doesnt just run on its own.

[acratophorum]

Originally Posted by tony404

its not a set and forget type of thing , you would still have to have staff . Customer people ,admin, someone to management the account. That much processing doesnt just run on its own.

Of course not...but the co-op would generate enough revenue to pay for itself. It would run the exact same way CCBill does, except the profits (revenues after expenses) don't go to a single owner...they stay in the company or are paid out in dividends...

[Kimmykim]

Originally Posted by KlenTelaris

Indeed,i heard payment proccessing script cost only 100$.So i think webmasters should unite their financies and create new payment processor with lower fees.

Not to insult anyone here, but in all honesty, this is a complete pipedream. Visa and Mastercard don't work like this, and frankly, they like the situation the way it is now.

Getting your own merchant account is the only option besides using an IPSP, and you are not allowed to co-op on those and be in compliance with the card association regs, let's be clear on that.

One company, one merchant account. There is a reason that unregulated aggregating is so far outside the rules it's not even funny.

[acratophorum]

Originally Posted by Kimmykim

Not to insult anyone here, but in all honesty, this is a complete pipedream. Visa and Mastercard don't work like this, and frankly, they like the situation the way it is now.

Getting your own merchant account is the only option besides using an IPSP, and you are not allowed to co-op on those and be in compliance with the card association regs, let's be clear on that.

One company, one merchant account. There is a reason that unregulated aggregating is so far outside the rules it's not even funny.

Why? There are co-op banks... I don't see how the ownership structure of a corporate entity has any bearing on visa/MC compliance. If CCBill had many owners, would they not be allowed to act as an IPSP?

[Kimmykim]

Originally Posted by acratophorum

Why? There are co-op banks... I don't see how the ownership structure of a corporate entity has any bearing on visa/MC compliance. If CCBill had many owners, would they not be allowed to act as an IPSP?

CCBill does have multiple owners, however they all have the same last name. CCBill and Paycom (which also has two owners) are legitimate IPSPs who have spent millions of dollars in fees over the years in order to be legitimate. The security audits, the PCI compliance, the multitude of legal and card association compliance is not something that occurs with a $100 payment processing script.

Nor does CCBill or Paycom own any websites. They are not processing for themselves, they are processing on behalf of their clients.

The ownership of accounts is very specific to MC and Visa. That's what they have the TMF/Match system for, and they do not allow unregulated aggregating. Meaning that unless you are a properly vetted IPSP, you must establish your own processing account with your own company and you may not process transactions for anyone besides your own sites.

[Barefootsies]

Originally Posted by Kimmykim

CCBill does have multiple owners, however they all have the same last name. CCBill and Paycom (which also has two owners) are legitimate IPSPs who have spent millions of dollars in fees over the years in order to be legitimate. The security audits, the PCI compliance, the multitude of legal and card association compliance is not something that occurs with a $100 payment processing script.

Nor does CCBill or Paycom own any websites. They are not processing for themselves, they are processing on behalf of their clients.

The ownership of accounts is very specific to MC and Visa. That's what they have the TMF/Match system for, and they do not allow unregulated aggregating. Meaning that unless you are a properly vetted IPSP, you must establish your own processing account with your own company and you may not process transactions for anyone besides your own sites.

An interesting read sire.

[Bro Media - BANNED FOR LIFE]

bump for a business thread, now excuse me while i read it all... alot of text

[acratophorum]

Originally Posted by Kimmykim

CCBill does have multiple owners, however they all have the same last name. CCBill and Paycom (which also has two owners) are legitimate IPSPs who have spent millions of dollars in fees over the years in order to be legitimate. The security audits, the PCI compliance, the multitude of legal and card association compliance is not something that occurs with a $100 payment processing script.

Nor does CCBill or Paycom own any websites. They are not processing for themselves, they are processing on behalf of their clients.

The ownership of accounts is very specific to MC and Visa. That's what they have the TMF/Match system for, and they do not allow unregulated aggregating. Meaning that unless you are a properly vetted IPSP, you must establish your own processing account with your own company and you may not process transactions for anyone besides your own sites.

I am not disagreeing with you...and I am not suggesting that the co-op would move forward without becoming an IPSP....What I am suggesting is that owners of large companies come together and pool their resources in order to become a legit IPSP.

[Kimmykim]

Most of the owners of the large companies understand how payment processing works and realize why the rules were designed to be that way.

[chupachups]

Read up on game theory and you know this would never work in the first place.

[acratophorum]

Originally Posted by Kimmykim

Most of the owners of the large companies understand how payment processing works and realize why the rules were designed to be that way.

I am not sure I see your point...

[acratophorum]

Originally Posted by chupachups

Read up on game theory and you know this would never work in the first place.

Can you post a paraphrase please?

[Barefootsies]

Originally Posted by acratophorum

Can you post a paraphrase please?

[acratophorum]

Originally Posted by Barefootsies

Hey, its worth a try lol

[Kimmykim]

Originally Posted by chupachups

Read up on game theory and you know this would never work in the first place.

John Nash, baby!

[acratophorum]

Originally Posted by Kimmykim

John Nash, baby!

Yeah, but how does game theory relate to this discussion???

[Kimmykim]

Game theory is a set of premises that forecast how a group of 'players' will interact with each other in a given set of circumstances. It's not limited to games, per se, it was also, and still is, used to predict the behaviour of governments in relation to political or military maneuvers.

[Dagwolf]

Originally Posted by Kimmykim

Most of the owners of the large companies understand how payment processing works and realize why the rules were designed to be that way.

They can also negotiate a volume discount.

[emjay]

Lateral thinking - it pays to use it!

[Fizzgig]

Originally Posted by emjay

Lateral thinking - it pays to use it!

They give you a discount for that too?

[Why]

its amazin how little some people know about processing, which is the lifeblood of this industry. without it we all cease to exist.