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-   -   how long til merchant accounts start blowing up? (https://gfy.com/showthread.php?t=842468)

webmasterchecks 07-19-2008 09:44 AM
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 :)

Mutt 07-19-2008 10:31 AM
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?

Mutt 07-19-2008 10:34 AM
i'd much rather hear from Epoch/Paycom and CCBILL - they're the ones losing out more than anybody else.

GetSCORECash 07-19-2008 10:59 AM
Quote:
Originally Posted by Mutt (Post 14480420)
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?
Our Promos are Legit. Ofcourse they aren't as agreasive or give the house away, but they are fair to get you to send us some traffic.

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.

webmasterchecks 07-19-2008 07:05 PM
Quote:
Originally Posted by Mutt (Post 14480423)
i'd much rather hear from Epoch/Paycom and CCBILL - they're the ones losing out more than anybody else.
yea, agree

spunkmaster 07-19-2008 07:14 PM
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 !

Evil E 07-19-2008 07:25 PM
Don't big programs have more than 1 merchant account anyways?

cherrylula 07-19-2008 07:31 PM
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.

webmasterchecks 07-20-2008 07:15 AM
Quote:
Originally Posted by cherrylula (Post 14481355)
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.
they had gotten craftier

sltr 07-20-2008 08:30 AM
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.

webmasterchecks 07-20-2008 09:58 AM
Quote:
Originally Posted by sltr (Post 14482279)
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.
After the babenet problem I mentioned years ago, many US/foreign banks were reluctant to issue high risk adult accounts. Humbolt and a handful of other US banks did, and offshore banks did, but they had a vigorous background/credit check and required huge volumes in order to use them. As a result, very few programs were using merchant accounts, most used the IPSPs. The programs that had to use use their own merchant accounts were generally the ones who ran crossells, multiple prechecks, etc and who knew how to manage the risk with Visa/MC, round robin transactions under the chargeback minimums and recycle accounts. They would basically have risky, high- chargeback transactions coming through, but they were experts in manipulating the process in order to keep that fact under the various radars.

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

robfantasy 07-20-2008 12:34 PM
great read

SmokeyTheBear 07-20-2008 12:43 PM
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.

webmasterchecks 07-20-2008 01:34 PM
Quote:
Originally Posted by SmokeyTheBear (Post 14482701)
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.
there are lots of ways you can do it. in 2000 one well known webmaster made a deal with an issuing bank to issue him 100,000 cards, so that he can run them and the charge as he saw fit. visa caught on when they flagged the bank as doing .00015 of their issuing revenue, but having issued 3% of the cards out there :)

fuzebox 07-20-2008 01:59 PM
Quote:
Originally Posted by SmokeyTheBear (Post 14482701)
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.
Err you know why Epassporte was really started, right? :error

webmasterchecks 07-20-2008 02:06 PM
Quote:
Originally Posted by fuzebox (Post 14482894)
Err you know why Epassporte was really started, right? :error
mallick was genius

Quote:
Originally Posted by greenlab (Post 9208617)
Most of you dont know the real deal behind Epassporte...
Did you ever wonder why everytime someone from epass was posting in threads, they claimed that epassporte has hundred of thousends of users....definetlly not all of them are webmasters :)

The main scope of existence of epassporte is the issuing of debit cards for chargeback ballancing. It worked like this till now...every %x member that signed up trough paycom (or other processors) for a site membership, were given an epassporte Gift card. It works like this...paycom is giving you a membership to site xxxx for free, as long as you are a member of site yyyyy. In order to process your membership for site xxxx, we are giving you an epass Virtual Visa Gift card. The membership costs 29.99$/month, however, paycom will make sure that the 29.99$ will be deposited everymonth onto your visa gift card.
Actually paycom/epass were crediting your epass visa gift card with 29.99$ every month, and then in 30 secs, they were billing the card though one of designated merchant account, with a cost of just the processing fee (discount rate). By billing hubdreds of thouseds of cards like this, there is now wandering why their chargeback ratio si very low, and they still allow cross sales without any problems...(have seen sites with 2 pre checked crossales).

So this is the biggest reason for epassporte to exist, and this is why it was created...the issuing of plastic debit cards and affiliate/webmaster payments are done just to make epassporte look compliant in the eyes of Visa, as this gets lots of $$$$ volume and they can claim that the main purphose of their service is not the issuing of "gift cards" - and that they are actually a 100% legitimate issuer....

now think for a second...do you think that there are more that 10.000 webmasters that get payments by epassporte ? There is a huge distance to the hundreds of thousents cards that epassporte is claiming they have issued...(and they are telling the truth here). The rest are just "Gift Cards".....and they are trying to offset this by the funds that get moved by affiliate programs and the use of debit cards for widthrawal in all countryes arround the world...

However, thay have gone too far and visa is getting quite close on them....

The trick is somewhat similat to what ibill does with gkard, but the Epassporte trick is much more stable and intellingent...

webmasterchecks 07-20-2008 02:12 PM
Quote:
Originally Posted by SmokeyTheBear (Post 14482701)
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.
also, remember what ibill did a few years before they went belly up? they had added a prechecked box on all signup forms for a $1 donation as an attempt to try to balance out their chargeback problems

VicD 07-20-2008 02:17 PM
Quote:
Originally Posted by SCORE-Cash (Post 14480476)
Our Promos are Legit. Ofcourse they aren't as agreasive or give the house away, but they are fair to get you to send us some traffic.

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.
Signed up for your prog, waiting for review, user= vicdxxx :)

cherrylula 07-20-2008 07:45 PM
Quote:
Originally Posted by webmasterchecks (Post 14482188)
they had gotten craftier
No, really. I know someone that worked for babenet, and from what it sounds like they didn't even cancel people, and the customer service employees laughed at and called customers rude names. Apparently, the owners didn't care about the poor service. And, babenet used to charge by the minute for fake live shows and rip people for hundreds and thousands, nothing nearly as close as what they are pulling today.

using the babenet comparison is just a bad idea. it was pretty scammy.

but interesting topic nonetheless.

12clicks 07-20-2008 08:02 PM
lot of guess work in this thread.

tony286 07-20-2008 08:23 PM
Quote:
Originally Posted by 12clicks (Post 14483855)
lot of guess work in this thread.
Well considering at one time the cb ratio for the web was 5% now it's 1%. Peoples actions do affect others, they don't operate in a vacuum. Eventually if it gets too crazy, CC's wont process adult and then no one makes money. For anyone to think that could never happen, considering what the whole web does in online transactions. We are nothing.

bloggingseo 07-20-2008 08:24 PM
Interesting read, speculative

Drake 07-20-2008 08:30 PM
Hmm something to ponder

marketsmart 07-20-2008 08:34 PM
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..

webmasterchecks 07-20-2008 11:16 PM
Quote:
Originally Posted by marketsmart (Post 14483914)
i could tell some stories about this stuff that would blow peoples minds... .
lets hear them

Mutt 07-21-2008 01:01 AM
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

AlienQ - BANNED FOR LIFE 07-21-2008 01:17 AM
He mentioned XPICS.

They were smoking through Merchant Accounts faster than a Rastaman with a quarter pound of good green bud.

MakingItPay 07-21-2008 06:44 AM
Bump for biz discussion thread.

webmasterchecks 07-21-2008 07:32 AM
Quote:
Originally Posted by sltr (Post 14482279)
i don't see the relation b/w the current sub-prime lending fiasco and getting my merchant account yanked..
banks made a lot of the money off the mortages before the credit crunch, now they are carefully thinking out who they are going to issue loans to, because so many are defaulting, and they made money off of not being careful enough in the past, and are now getting hit

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

tony286 07-21-2008 07:39 AM
Quote:
Originally Posted by webmasterchecks (Post 14484920)
banks made a lot of the money off the mortages before the credit crunch, now they are carefully thinking out who they are going to issue loans to, because so many are defaulting, and they made money off of not being careful enough in the past, and are now getting hit

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
People losing merchant accounts, well someone wants to gamble with their account oh well. The thing I worry about is Visa decides cb's are getting stupid again now it goes to .5 or .3.Then their actions affect my business and that really pisses me off.

12clicks 07-21-2008 07:45 AM
Quote:
Originally Posted by tony404 (Post 14484937)
People losing merchant accounts, well someone wants to gamble with their account oh well. The thing I worry about is Visa decides cb's are getting stupid again now it goes to .5 or .3.Then their actions affect my business and that really pisses me off.
there's no reason for a properly run program to run above a .5 CB rate.

a properly run business that decides to take no risks will not be effected by a .5 CB rate.

tranza 07-21-2008 08:06 AM
Quote:
Originally Posted by Mutt (Post 14480423)
i'd much rather hear from Epoch/Paycom and CCBILL - they're the ones losing out more than anybody else.
I second that.

:2 cents:

tony286 07-21-2008 08:11 AM
Quote:
Originally Posted by 12clicks (Post 14484965)
there's no reason for a properly run program to run above a .5 CB rate.

a properly run business that decides to take no risks will not be effected by a .5 CB rate.
We avg a .3 but if that becomes the bar because of others actions.Thats going to suck.

webmasterchecks 07-21-2008 08:32 AM
Quote:
Originally Posted by tranza (Post 14485027)
I second that.

:2 cents:
my guess with ccbills amount of mid size to tiny clients that would never get a merchant account, they were not affected as greatly. most of the programs that moved had epoch as their processor

NETbilling 07-21-2008 08:47 AM
Quote:
Originally Posted by webmasterchecks (Post 14480324)
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 :)
Hi - good post. I certainly have my opinions. Please keep in mind that we have been helping merchants establish their own accounts since 1998 successfully and for every program that you see doing questionable things, we have dozens of others not doing them.

Thanks

NETbilling 07-21-2008 08:54 AM
Quote:
Originally Posted by SCORE-Cash (Post 14480476)
Our Promos are Legit. Ofcourse they aren't as agreasive or give the house away, but they are fair to get you to send us some traffic.

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.
Hi,

Let me know if you need additional accounts. We can help.

webmasterchecks 07-21-2008 08:54 AM
Quote:
Originally Posted by NetBilling (Post 14485131)
Please keep in mind that we have been helping merchants establish their own accounts since 1998 successfully and for every program that you see doing questionable things, we have dozens of others not doing them.
Certainly, i was not trying to imply otherwise. my observations came from trying to figure out how some programs can pay some of those signup prices + observation and talking with friends/associates. i apologize if it came across that way, you can see i have a huge amount of respect for Netbilling

NETbilling 07-21-2008 08:56 AM
Quote:
Originally Posted by webmasterchecks (Post 14485141)
Certainly, i was not trying to imply otherwise. my observations came from trying to figure out how some programs can pay some of those signup prices + observation and talking with friends/associates. i apologize if it came across that way, you can see i have a huge amount of respect for Netbilling
Hi,

I did not take it that way at all and thanks for the respect.

czarina 07-21-2008 08:57 AM
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!

HBKKH 07-21-2008 09:00 AM
interesting....


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