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how long til merchant accounts start blowing up?
Got into a interesting discussion recently. there are lots of programs that have moved to their own merchant accounts recently, and there are some *interesting* things on some of their signup forms, god bless their hearts, and you can see payouts stretching.
8 years ago or so, babenet and a few others helped discourage banks from openly taking high risk business, thats when companies like ccbill, ibill and epoch flourished and in recently months this has seemed to change and banks seem much more open issuing mids and youve see programs moving to their own merchant accounts. with the companies starting to taking advantage of this climate, i can only imagine the banks pulling back like a rubber band when/if the shit hits the fan, especially when they are still having the problems from overextending the mortgages. Just a few weeks ago an adult-friendly bank in CA lost their ablity to proceess high risk adult. It would be interesting to hear mitchs take on this privately, as netbilling is the main merchant account provider for adult, they are the ones that made it simple to get a merchant account and helped them flourish, would be interesting to see the results of a few reports run off that data :) |
it won't last but these programs know that - always been the same mindset, make as much as you can, and don't worry about anybody or anything else be it the consumer, the affiliate or the industry's future
anybody who thinks any of these special promo days are legit are utter morons - when you have no conscience about screwing surfers what idiot thinks they feel any differently about affiliates? |
i'd much rather hear from Epoch/Paycom and CCBILL - they're the ones losing out more than anybody else.
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Concerning the merchant account, it will be a sad day if this happens. We tried getting a couple of accounts as we fear the above takeing place, and I can tell you that it is super hard to get a merchant account today. Those that do get one, are very lucky, and should thank the bank chargeing them 10% to process thier sales. |
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A Banks portfolio can only be made up of 10% of high risk to their assets. As their assets shrink so does the high risk volume they can process !
Be very worried if you don't have backups because some of the major processing banks are getting wacked hard on their real estate and sub prime credit card losses ! |
Don't big programs have more than 1 merchant account anyways?
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If you knew how shady those companies billing practices were back then compared to what you are referring to now, you would not bat an eye.
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i'm a client of netbilling for 5 years now. i don't see the relation b/w the current sub-prime lending fiasco and getting my merchant account yanked.
i don't see why a bank would "pull back" from one revenue generating center due to another's lack of revenue generation. |
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In the past 9 months companies like pimproll, naughtyamerica, platinumbucks, datinggold, mediumpimpin, AWE, meatcash, occcash, ragecash have moved to their own merchant account. Im not saying they moved for only shady reasons, as there are other advantages, like lower fees and having direct access to the credit card data. But with this new option, you have much more latitude as well with things processors would prohibit. And you always have a few guys that push things all the way past the limits. Imo the recent moves have affected epoch much more than ccbill, because of their smaller portfolio of large programs Good read below about xpics/heartland payments systems that will show you the environment in the past http://www.riverfronttimes.com/2000-...n-in-the-usa/1 |
great read
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wouldn't it be alot simpler for programs to "buy" memberships to decrease chargeback rate %
like lets say in theory a program puts 100k into 5000 epassporte accounts ( i am just using it as an example ) then near the end of the month they simply buy their own memberships to counteract the amount of chargebacks they have gotten. |
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using the babenet comparison is just a bad idea. it was pretty scammy. but interesting topic nonetheless. |
lot of guess work in this thread.
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Interesting read, speculative
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Hmm something to ponder
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i could tell some stories about this stuff that would blow peoples minds... like millions of dollars in cc fraud, getting offshore banks shut down, etc... i know a lot of the older people here know most of the info, but you can blame a lot of this type of stuff on the state of regulation on adult processing..
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i never knew that about Paycom/Epassporte - i'm sure i've joined a site or 2 in the last 5 years processed by Paycom and don't remember seeing anything about being credited a Gift Pass to site X to get access to site Y
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He mentioned XPICS.
They were smoking through Merchant Accounts faster than a Rastaman with a quarter pound of good green bud. |
Bump for biz discussion thread.
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the same principle can apply to merchant accounts and im not saying it would get pulled, some people taking risks may lose theirs, banks may not issue them as freely as they are now, and some banks may pull out, but as long as your numbers make sense, netbilling is smart enough to make sure you are taken care of |
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a properly run business that decides to take no risks will not be effected by a .5 CB rate. |
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:2 cents: |
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Thanks |
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Let me know if you need additional accounts. We can help. |
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I did not take it that way at all and thanks for the respect. |
I dont think it will last until the end of the year. Heck, I dont think the US banks will last that long! Not at the rate things are going!
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interesting....
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Very interesting discussion..
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programs feel they need to at least maintain or increase the amount they can pay their affiliates, and maintaining is tough when its summer, a recession and conversions are crappy, on top of the tube sites funneling traffic away. its harder to pull $$$ away from consumers when there isnt as much around and reducing payouts, (or pulling the difference out of their own pockets) isnt an option. good quote from the posted article "They are masters. They are very, very smart people who spend their every waking moment trying to figure out how to beat the system". this has not changed |
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the qualifications for a loan today are more rigorous than 3 months ago but that is completely separate from running a legitimate business; and your cb ratio does not raise a flag, the bank simply won't have a reason or inclination to "blow up your merch acct" as the thread title suggests. also, most of the profit that has been "lost" by lending institutions have been loan loss provisions set aside to offset deteriorating real estate portfolios. there's simply no logic in a business cutting 1 HUGE profit center due to another's issues. if anyone has their own merch accts "blow-up" it would be due to something else- cb ratio, fraud, etc. all the usual high risks involved in adult. which has always been the case regardless. |
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With cbs comes risk. With merchant accounts it makes sense not put all of your eggs in one basket. The company I work for specializes in high risk accounts. You can contact me if you are interested in diversification, or you want to start a something new.
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I dont understand why everyone thinks that getting a merchant account is so difficult. I have ok credit not great but certainly not bad. My bank manager OFFERED me a merchant account. Its with one of the largest banks in the country and it cost me 85 bucks. I have quietly been using it for 3 years, small amount of transactions, no problems. I recently started to up that making it a primary processor, again no issues.
Yes my bank manager knows exactly what I do, they reviewed and approved the sites. So I dont get why it's so difficult to get a MID. Am I missing something? |
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if banks think they can regain lost profits through high risk merchant accounts, i hope they don?t get skittish when they see what some of us are capable of. |
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in fact, your theory is the one that proposes that banks are going to *blow up* merch accts due to losses in other areas/ something to that effect. and if you don't think merch acct providers know what people's greed makes them capable of, well. :Oh crap |
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