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Message # 5200.2

Subject: Re: VISA is spying on you and the future for Visa

Date: Sat 09/08/03 05:17:45 GMT

Name: AnthonyX

Email: anthonyx@jowc.net

Website:

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It should not surprise anyone that your credit card company (Visa, Mastercard, or whomever) knows who you've been buying from. They have to; otherwise they can't do what they're in business to do, or resolve billing disputes. Since it is largely the banks who are on the front lines for customer service, they need that information also.

Merchants are assigned category codes by the credit card companies. These codes usually affect the "merchant fee" - how much the credit card company makes on each transaction... ie if the merchant fee was 2%, the merchant only gets $98 of $100 of goods or services sold. The actual amount depends on the type of business. I understand that adult videos seems to be at the higher end of the merchant fee spectrum. I think it has more to do with financial risk than anything else. I can understand why financial institutions would want to back away from online gambling - people running up debts they can't pay back and leaving the institution caught in the middle. I can also understand why internet-based sales, and particularly adult videos are deemed high-risk. Someone could easily set up a presence, start making sales with no product to deliver, and disappear before customers start complaining about non-deliveries.

Think about it from the financial institution's point of view... Would you lend money to a stranger? How much would you want to know about a person before you trust them with YOUR money?

Whether they know this information or not, I can't see how your bank is going to care what you do with your money, as long as you don't default on your loans or credit card debts with them... I think they have an obligation to keep such purchase information confidential though.

I can't understand why credit card companies would refuse merchant accounts with adult video businesses, unless there has been an excessive history of fraud. One way around the problem is if the credit card company withholds payment until the customer has had a chance to receive the goods, and their statement, and initiate any non-delivery claim. It would give the cc company no excuse to refuse business, but would hurt businesses who have to wait for delayed payments.

On one point I do agree: banks and credit card companies have no business imposing someone else's morals or beliefs on how a person chooses to spend their money... but then, I don't think that is what is happening here.

I don't see this as a civil liberty issue at all... it's purely about money, fraud, and financial risk.

In reply to Message (5200)

VISA is spying on you and the future for Visa

By crazygirlsbrian - webmaster@crazygirlsinternational.com Sat 09/08/03 00:49:52 GMT

Website:

While investigating why Multicards stopped processing transactions for us, I learned that almost all banks in Europe have stopped adult transactions due to the new Visa Regulations and privacy concerns.

You may not know it, but every Visa transaction you make is coded.

That code tells Visa and your bank what TYPE of goods or services you are buying.

And it is NOT only used for statistical reasons.

According to the European banks these and other changes were brought in by Visa at the request of the U.S. government.

For example banks in France, who handle the billing for many online gambling sites, have had many transactions turned down because they refused to use the code that would divulge to Visa that the transaction was for gambling. This is because France has a privacy law that actually MEANS something.

When they were forced to comply with Visa or face being cut off from Visa, they found that 50% of their sales to US customers were refused by the customers bank because they did not allow their customers to use their Visa card to gamble online.

The privacy and civil liberties implications are obvious.

Your bank has a record not only of what you spend and who with, but the type of goods and services you are buying online and they use this information to decide whether you can use their card.

Do you want your bank to know that you subscribe to adult sites? No? Well, despite the innocent-sounding name that may appear on your statement, your bank KNOWS.

Because of this and other recent actions by Visa and MasterCard, the banks in Europe are in discussions about launching a new card, which will free their customers from the all-seeing eye and might of Visa.

In addition, some major banks IN the U.S.A. are looking into starting their own non-Visa cards. Several are actually in litigation with Visa USA over the matter at the moment as Visa USA are trying to stop them.

It is possible that the European banks may end up refusing to handle Visa and Mastercard although their past cowardice suggests that will not go that far in standing up to Visa. However, if they do, banks in Asia are threatening to follow suit.

That will mean that the U.S. will be isolated. Americans will not be able to use their cards in most other countries and most people will not be able to use their cards in the U.S.A.

Canadian banks are watching and waiting to see what happens.

Brian

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