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Message # 5811.4

Subject: Not sure you should be blaming the card companies

Date: Wed 10/09/03 12:00:17 GMT

Name: RM

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I'm an programmer for a large company and I help support one of it's software applications that allow credit card payments. It's my understanding that companies like Visa, MC and AMEX have nothing to do with how their cards are used. The cards are issued by banks or other financial institutions who pay the selling merchants and bill the cardholders. When you have a merchant authorize your card for a purchase they are contacting a clearinghouse for this transaction. The clearing house, and I suspect Paypal is one of these clearinghouses, is set up to validate the authorization requests with the issuing banks to find out of the card is valid and there is enough room on it for the purchase. If the bank clears the purchase the clearinghouse may still deny the authorization for any number of reasons such as it's in a currency they do not support or from an off limits country. Clearing houses are not household corporate names and there aren't that many of them but they do hold some power over electronic credit card use.

In reply to Message (5811)

How Visa/MasterCard want to 'protect' us - A bit of a rant, but relevant :(

By Nigel - nigel@wetlook.com Wed 10/09/03 00:03:43 GMT

Website: www.wetlook.com

As you may have realised, us producers are having a harder and harder time having credit card orders processed. Although we all like to give stuff away for free, and we are only really in the WAM game because we love it so much, we do try to recoup some of our expenditure.

The powers that be in Vi$a and Ma$terCard are adding tighter and tigher control on 'Adult' businesses (I'm not going to comment of the political aspects to this). For this reason, Multicards, and many other card processing companies are restricting what we can do.

Already US Banks have had to stop handling offshore clients, and the latest news from the European banks is that they are only able to process orders for Tangible Products (VHS + DVDs, not streamed content or memberships). This sounds fine for me (Minx Movies) for example, but wait a minute, there are contiditions...

The website is only allowed to show 'box covers', not any 'previews' ( picture galleries, or AVI/MPEG downloads) UNLESS they are 'protected' by an 'Adult Check' type system. I can only presume that this is Vi$a and Ma$terCard's vague attempt to 'clean up' the Internet.

If they manage this to acheive this, then before you enter ANY vaguely adult site that is selling stuff then you will need to subscribe (and pay annually for) an 'Adult Pass'. This will hurt all WAM producers, we barely scrape enough sales to cover our costs, and anything that puts off casual browsers is very bad news.

Even inside the US you are going to have problems, I've recently switched my transaction processing to ozbill, based in Australia, but there are moves afoot to block or question any US citizen making a 'foreign' (outside US) payment !!! So much for the land of the free. (I've already had 1 customer's card turned down, they had to contact their bank to complain before the transaction finally went through).

Personally I am voting with my wallet, I will be applying for an Amex card later this week, Vi$a and Ma$terCard can go whistle for any more commission from my shopping.

Nigel

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