Hello all,

I've come up with a paypal type idea but its not quite the same in some ways its better. Please let me know your honest opinions and whether you'd use it as a primary processing solution or not. I know that many companies use paypal as their primary processor. We'll here's the overall picture i have in mind:

- Your clients simply get a prefunded virtual debit card using either wire-transfer/cheque or credit card.

- It can be bought within seconds online (via cc).

- The virtual card works like a real credit card, has features like chargeback (:)) and a statement etc.

Now for our friends here who'd be the merchants for this system would accept this virtual card at their websites.

Their benefits

- Excellent fraud protection
- Almost zero chargebacks
- 50 cents discount rate, NO percentage or maybe a very small one like 0.25% !!
- Proper checkout screens etc
- Your name would appear on the 'virtual' statement.

What do you think? Please post your honest opinions and contribute what functions you'd like it to have? I hope to get this system kicked into motion if i can get a good response you people.

Regards,
Asher.

It's a good idea, but PayPal already has that, you can use a PayPal "debit card" anywhere mastercard is accepted. Only catch is that it's only for US residents.

If you go ahead with your idea, at the very least make it for Canadians as well =)

You see its not exactly paypal :)

Few additional points:

- The merchants get the best discount rate, something like 35 cents only

- Clients from ALL across the globe are accepted not just people in USA

- And buyers can buy privately and securely without giving out their personal CC information to some maniac :>

~Asher.

Two main concerns jump at me:

- You say almost zero chargebacks. I'll call you the processor, the (hosting company or whatever) the merchant, and its customer the customer. What happens if the customer requests a chargeback from the merchant? Do you as the processor absorb the cost and the merchant keeps the money? Or do you issue a chargeback to the merchant and just not charge him for the cost of chargebacks ($25 or whatever per chargeback)? What would happen in the case of HosTurbo? I think Revecom has a little mess on their hands right now (just as it appears from WHT comments anyway). This concerns me only because chargebacks are so common and claiming 'almost zero chargebacks' is a little bold (to me).

- Will you be backed by some financial institution or insurance company? I don't remember what other company tried this with online merchants (Fooze Money or something? I forget, may be another company....) that had an account you could charge with money. Well unfortunately that company went bust and anyone who had any amount of money in their account lost it. I don't know if they ever got the money back via courts or anything (didn't follow up because I didn't use them) but that could get hairy and costly. So what my concern is is what kind of protection do you have that will guarantee your users that their money is safe (can it be withdrawn back into their bank accounts?).

Here's the answer to both your questions:

Firstly our system will have an excellent fraud protection mechanism. For example during the inital signup process where the person gets his 'virtual card' his card and actual location will be thouroughly checked by our system and will also be screened by people who are online 24/7 monitoring the system. That will 99% eliminate the chance of fraudulent people joining up.

Flooz which you're reffereing too was a very very very bad idea. Flooz accounts were 'carded' and 'traded' on IRC channels due their lack of security. This hopefully will not happen in our case as we will take full measures to ensure the safety and privacy of all accounts.

Money from the account will be transfereable to bank accounts via wire transfer just like PayPal. but only during twice a month or once. and money is also transferable account to account.

Obviously once we start to grow we will form alliances with insurance and financial firms. We want to start this as a small operation so that [B]merchants[/U] can benefit from a virtually 'intrest-free' transaction processing enviroment.

However, we can all be sure that no system is completely free of fraud.

Originally posted by ^Kyo
However, we can all be sure that no system is completely free of fraud.
I wasn't really concerned about the card being fraudulent (nor the user using it with your system) but with the merchant not providing the service they should have been. Chargebacks aren't always used in fraudulent cases (concerning the user using the card). You see it all the time here on WHT how people using various hosting companies are forced to issue charge backs because the provider didn't (in their eyes) provide what they should have. With an "almost zero chargeback", your merchants are relatively safe to provide "their own level of service" while the customer expects a higher level. The customer gets irritated and issues a chargeback when the merchant refuses to budge on the situation. You as the processor are then faced with a customer's chargeback issued because they didn't get the service "they" thought they should have, and the merchant won't accept the chargeback as fair/valid because they provided service "they" thought they should have. You then eat the chargeback (as far as I'm gathering from the 'almost zero chargeback' policy).

If you can work out a good TOS/AUP clause for your 'almost zero chargeback', you'll probably do very well with it. :) Just be aware of as many situations that can arise and make sure your business plan incorporates them in some fashion.

Otherwise, it looks good to me. :)

I'm wondering how you plan to inforce your plans..ie, how would I "prove" I was me?

Later,
Douglas

I think this is a good idea, but would cost alot to set up and would be a full time venture. It could be pulled off, with alot of hard work. Maybe you could have something like a Web Hosting/Web Design Only Service. This would seperate you from the big boys like Paypal and Cit2t (or whatever its called).

It could work, find a few investors and you could pull this off.

Jim

About almost 'zero' chargebacks. We might absorb the chargebacks of our reliable merchants who just have 1 or 2 cbs in a month. However people having an insane amount of cbs will have it passed down.

And beleive me with this system here we want to give equal protection to both consumer and merchant.

Also, would you (consumers) buy this prefunded card online and spend at participating websites?

Free transaction between your customers?

Paypayl charges for transfer between paypal members. And that pees me off :angry:

Originally posted by ^Kyo
Also, would you (consumers) buy this prefunded card online and spend at participating websites?
I guess this is the biggest question. If I'm understanding it correctly, the point of this is so that people don't have to give their card # out, they instead use this, which is good, except they have to give the card # to *you*, which means they at least have to trust you.

In other words, I don't know if I feel any safer giving my info to you (no offense of course), a host, or a 3rd party biller. Any and all have to be trusted, eh? Or am I missing the whole idea here?

Hi Chicken :)

Yes you have the idea correctly. Actually we ourselves will not be seeing your card number. It will 100% automated. basic details like your cc address etc will be saved for your conveinence but not the card number.

Originally posted by zhenjie
Free transaction between your customers?

Paypayl charges for transfer between paypal members. And that pees me off :angry:

Yep :)

I think you could get this to work if you get a few companies to sign up after you have launched. Also, to get people to sign up, you may just want to give like a $1.00 for free or $5.00 like paypal did.

Also, I was thinking about this, and what you could do with chargebacks is if the customer wants a chargeback, you would just credit their account online, and not have a normal chargeback through the credit card companies. This way, people could have an internet bank account with you.

Security would be a really big thing too. You would need to invest thousands in making sure that each account is protected. I would say that the best way to do this is just restrict all access to the server, firewalls, and everything else to protect the system.

This would be a very expensive venture, but if you got enough investors, it would work.

Jim

Security and investment is seriously not a problem :)
Our programmers have been using pcs and researching security since they can remember that wont be an issue ;)

On the chargeback note. A good feature would be for hosting
companies and any company providing a service to have it where
if a customer requests a chargeback investigate it.

Example:

Normal merchant account:
Chargeback comes in, you can respond to the chargeback and
HOPEFULLY prove you gave the service which was paid for.

Now in alot of cases the customer wins and the merchant well
gets the chargeback.

In a service industry, internet sales of software and the like, all a
customer has to do is say "That was not me that charged that
card it was someone else".

Unless you have a signed copy of the card your screwed and you lose.
If you were providing hosting and the first month went by, you
could be out a hefty bandwidth amount if the client used a ton.

If an account is stolen for sure, then it is understandable that there
should be a chargeback. But who is the one that loses out here?

It is the Merchant because they provided the service for FREE plus
paid a chargeback fee.

If the account was stolen or fraudulent, are you going to eat that
amount of money say $150, or would'nt it be better to offer some
kind of split between you and the Merchant?

If you system fails to respond what is the guarantee?

If there is a security breach should the Merchant have to pay for
the mistake by your service?

Just a few questions that came to me when I was reading these
posts.

Sounds like a good idea at any rate.

Regards,
Ray

Yes I understand your point, and probably there will be a split between us and the merchant.

At any rate, this solution DebitPay as we're callin it will be an instant prefunded system which will bundle with our ADEBill merchant system, ADEBill merchants will be able to accept a variety of payment forms, like all major cards, DebitPay and wire transfers and cheques.

Interested parties in our system, who wish to preapply (no charge) or wish to learn more please email me or ask your question directly here.

Regards,
Asher.

Say, it certainly looks a lot more promising than Paypal, Asher.

When you're ready to go live, drop back in and let us all know so we can all go and check it out. :D

this is the same approach american express is trying to implement... but you have the same problem here... how will you authenticate the use buying your virtual card is a valid user??


american express on the other hand can implement something like this, because they have access to there bank account statements.. and the user has to log into there bank accounts and create a temporary card which is valid only for that XXX amount, on the XXX domain. In-turn reducing charge backs and frauds drastically.

Just a few things left before we take ADEBill live, debit pay will follow shortly.

To authenticate the user we're thinking of various things. For example, like only an inital spending of $250, until the user sends us authorization of his identity etc. we'll see how it works out. ;)

well, emailing info to you... how is that different from some one else? :) Not to run you down or anything... but I think using your service, would require one extra step... which most users wouldnt want to take...

I know its not one of the best options but it is one of the methods which could be used for validation.

Then there is another easier way we have in mind... :)