Want to get your thoughts on a separate thread I have been following:

PayZip Shuts up Shop - Sued by Mastercard ! (http://www.webhostingtalk.com/showthread.php?t=487109)

I actually have a friend who has $4,000 held up at PAYZIP. From the looks of it, she's not going to get any of it back.

In principle, it seems that PAYZIP is modelled pretty much the same way as 2CO. I would be recommending my friend to move over to 2CO but she's afraid that 2CO will take the same route, eventually.

Any thoughts on how 2CO may be different and would be more reliable / stable? From the thread on PAYZIP, I can see that:

a) 2CO is U.S.-based

b) All payments are processed on the 2CO site directly (I'm not sure if PAYZIP's works differently though

Aside from the above, I can't see why PAYZIP was shutdown and 2CO remains open. I will also contact 2CO and ask them for their comments (hoping they could post it here).

Thanks.

2CO has many contracts the last time I checked with Mastercard and Visa that allows them to provide their (amazing) service.

I use 2CO, too, and are fairly happy with them.

Being outside the U.S., it seems the only viable solution available for us.

However, I'm trying to find out what makes 2CO any different from PAYZIP.

Generally, our clients are very happy with 2CO and I just want to address their concerns and fears.

I've actually contacted 2CO already and will be waiting for their response.

Yes, this information would certainly be useful.
I have always been confused by exactly what is allowed and what is not allowed in the third party processor world.
What are 2CO and PayPal doing right and what is PayZip doing wrong ?
Is there any way to figure out if a 3PP is not following the rules as closely as they should be ?
What signs should people look for ?

Regards,
Ankur

i doubt it. 2CO have been around for a very long time compare to other.

I don't think any 3PPP is safe. Any.

mili

I don't think any 3PPP is safe. Any.

mili


You should try 2CO then. If this kind of things happens on US soil, heads are going to roll. The beauty of American Justice system will be at play here. This isn't Singapore.

You got to be joking
Myvirtualcard Canada ripped me off
Stormpay USA ripped me off
Probilling USA? ripped me off

The USA Justice system is the laughingstock around the world.

mili

3pPP is always a risk, as neither banks nor mastercard will like the idea of sharing one merchant account with 1000s of merchants.

This puts the bank in risk of non-traceable situation and has the risk of money laundering; more over one seller/merchant's chargebacks puts the whole merchant account to risk.

Henceforth better to go for your own merchant account, even though its little bit expensive compared to 3PPP.

It's possible, anythings possible... but highly unlikely. As someone has said, 2CO has extensive contracts and works extensively with the credit card companies.

I think I found an answer to my own question. Probably the MAIN DIFFERENCE between PAYZIP and 2CO is that 2CO has a PROHIBITED PRODUCTS LIST. It seems PAYZIP has serviced the clients that 2CO would simply refuse because they are basically high-risk.

I'm not saying that the products and services below are illegal in any way or PAYZIP is involved in any illegal activity. But PAYZIP's decision to allow such customers has ended up affecting their entire customer base.

I sincerely wish that all legitimate businesses who have used PAYZIP are able to get paid but I hope this thread gives a clear differentiation on why PAYZIP was shut down and 2CO was not (when seemingly they are the same type of business).

2CO's PROHIBITED PRODUCT LIST
The following products and services CANNOT be sold:

* Pornography & Adult Content
o You can NOT sell any Adult subscription services, chat, or any pornography (pictures, videos, DVDs, magazines). Sites may NOT contain any nudity, web cams or links to pornographic sites.
* Firearms, Ammunition, High Capacity Magazines, Tasers, Air Guns
* Fireworks or Pyrotechnic Devices or Supplies
* Alcoholic Beverages
* Tobacco Products or Tobacco Substitutes
* Drug Paraphernalia
* Live Animals
* Donations
* Prescription Drugs,Controlled Substances, Unapproved Drugs
* Hazardous Materials, Combustibles, Corrosives
* E-Mail Advertising, Opt-In or Any Commercial Messaging Services
* Gambling Transactions or Sports Gambling Prognostication
* Securities Trading, Insurance, Currency Exchange, Licensed Sales
* Pre-Adult Content - Pictures, Videos, etc. of Individuals Under the Age of 18 Years
* Replica and Name Brand "Knock Off" Products
* Hotel, Airfare, Accommodations, Car Rental, Travel Services
* IRC Chat Hosting, Game Server Hosting, Shell Accounts
* Online Games
* Any site with a Lottery, Raffle, or Contest
* Credit Card Protection,Credit Repair Services, Applications for Financial Services or Loans, Collection Services
* "Money Making Schemes", e.g. Matrix, Multi-level Marketing, Get-Paid-for-Surveys, Home Mailing, Secret Shopper Services, Ect
* Satellite Signal Decoding Products, Cards and Card Programming
* Phone Chat Lines
* Phone Cards, Long Distance, VoIP or PC-to-Phone Service, SMS
* Psychic Readings
* Sites That Promote Hatred, Racism or Religious Persecution
* IT Certification Test Exams and Study Aids
* Degrees or Diplomas (Unless accredited by an association recognized by CHEA, ASPA, or U.S. Secretary of Education)
* Services Using Credit Card Transactions as Deposits or Credits
* Auctions, or selling through auction sites unless seller maintains a separate web site for use with 2Checkout.
* Any product or service enabling consumers to circumvent locks, programming codes or security features, or to gain access to features or services for which they have not expressly paid.

Well, it seems that PAYZIP has a restricted product list quite similar to 2CO's.

http://www.payzip.com/restricted.htm

The following products and services are not allowed to be sold:
• Adult contents that include nudity, subscriptions, chat, webcam, pictures, videos, magazines
• Alcoholic drinks
• Auctions (unless a separate website is maintained for use with Payzip)
• Casions
• Chat hosting
• Currency, securities and stocks trading
• Donations
• Drug paraphernalia
• E-mail advertising
• E-wallet, e-cash services
• Gambling
• Game server hosting
• Hazardous materials, combustibles, corrosives
• Live animals
• Lottery
• Mail order
• Money making, 'get rich quick' schemes
• Multi-level marketing
• Online courses, degree, diploma
• Phone services, cards, messaging services
• Prescription and classified drugs
• Replica products
• Satellite signal decoding products, cards and card programming
• Telemarketing
• Timeshare
• Tobacco products or substitutes
• Weapons such as air guns, ammunition, firearms, tasers

Restricted products:
• Adult toys and novelties, etc.
• DVDs
• Herbal enlargement products

So now I'm not so sure about why they were shutdown. Would it be because they have several customers actually carrying products in their restricted list?

You got to be joking
Myvirtualcard Canada ripped me off
Stormpay USA ripped me off
Probilling USA? ripped me off

The USA Justice system is the laughingstock around the world.

mili


You are not a US citizen though, so you are at a huge disadvantage. ;)

I have never heard of any of those companies besides Stormpay and they were rather new. 2CO has solidified its player as a processor. Its basically a Paypal. However, it still is possible for them to go under, however, highly unlikely.

The reason for our justice system being the laughin stock is simply because you can sue the pants off of anyone. In this case, it would 2CO. ;)

However, we are thinking of switching over to BluePay for all of our Credit Card processing needs.

Folks, I don't know if any of you were involved with the PaySystems fiasco when they got shut down... but "mili" is correct:

NO 3RD PARTY PROCESSOR IS SAFE.

In my eyes, it is only a matter of time before 2checkout also goes down. You think they're "big" and can't be shut down?

Ha. PaySystems was (arguably) bigger and had been around longer. And look what happened to them (and the thousands of merchants using them).

It's just a matter of time...

MrZippy is 100% correct. There are no guarantees in life and most definitely no guarantees that a 3PP today will continue to be a 3PP tomorrow.

PaySystems is a perfect example and of course there are many other examples... I would say that not a year goes by without more than one 3PP going out of business.

There are no "set in stone" rules and a lot of it comes down to the opinions of the Card Associations. It is great to have contacts with the Associations but keep in mind that PaySystems also had numerous contacts and relationships as well and ultimately their business still failed... leaving thousands of merchants abandoned.

On the Payzip prohibited list: "Satellite signal decoding products, cards and card programming"

Isn't this what Mili sells?

On the Payzip prohibited list: "Satellite signal decoding products, cards and card programming"

Isn't this what Mili sells?

Yep. You got it.

It is always interesting to read the comments of experts ;)

It's also enlightening to see payzip has, as have many others, taken our work product (the prohibited products list) and reproduced it as their own.

Has paysystems closed, or did they just drop their book of business that included international processing... and turned more towards being an ISO? Seems to me, they notified their clients of the change in business prior to shutting down the accounts. I think some mix up the loss of funds held on account, with the close of their international processing. To my knowledge, those were 2 separate events.

2CO is happy to not be a 3PP, and to have a good working relationship with the credit card association. We have worked very hard to ensure our business model is in compliance with association requirements, including PCI compliance.

Try us out, and leave your worries behind ;)

Has paysystems closed, or did they just drop their book of business that included international processing... and turned more towards being an ISO? Seems to me, they notified their clients of the change in business prior to shutting down the accounts. I think some mix up the loss of funds held on account, with the close of their international processing. To my knowledge, those were 2 separate events.
Don't know if they're "closed" now or not. They certainly did not send us any notification of a "change in business" (if you want to call it that) before they suddenly stopped processing our payments or paying us. :(


2CO is happy to not be a 3PP, and to have a good working relationship with the credit card association. We have worked very hard to ensure our business model is in compliance with association requirements, including PCI compliance.

Try us out, and leave your worries behind ;) What? No coupon for a discount off the setup fee? :)

It's also enlightening to see payzip has, as have many others, taken our work product (the prohibited products list) and reproduced it as their own.

But apparently, they stopped copying there as it seems that they allow many business on that list to continue doing business with them.

We manage 2CO accounts for our clients and I can say that 2CO is pro-active in monitoring compliance of their customers.

2CO is happy to not be a 3PP, and to have a good working relationship with the credit card association. We have worked very hard to ensure our business model is in compliance with association requirements, including PCI compliance.

Try us out, and leave your worries behind ;)

For our clients' sake, I hope that this statement is worth its weight in gold :peace:

What? No coupon for a discount off the setup fee? :)

If you want a 2checkout account you're free to have mine: as 2checkout is absolutely useless.

If you want a 2checkout account you're free to have mine: as 2checkout is absolutely useless.

Being outside of North America, 2CHECKOUT is the only viable solution available for us. I'm not sure what it is about 2CO that you don't like but for the rest of us, there seems to be no other choice.

If you want a 2checkout account you're free to have mine: as 2checkout is absolutely useless.
What, specifically, makes them absolutely useless?

What, specifically, makes them absolutely useless?

Very interested to find out the answer to that myself.

What sets 2CO apart from 3PPs is that we don't just 'talk the talk."

We truly take ownership of the products that we sell on behalf of our registered vendors -- that includes fraud and liability ownership.

PaySystems also aggressively marketed itself as a 3PP before changing their business model. That is something we have not done for a very, very long time because you could see the writing on the wall many years ago. We market to individuals seeking a 3PP but we clearly state we are an ALTERNATIVE and you get a lot more than you may have been seeking.

MC has always insisted that the CONSUMER understand the contract between suppliers such as you and 2CO.

It does not matter what you say you are or how much you try to copy from 2CO if the relationship isn't easily comprehensible to the cardholder. It is highly unlikely that there is a true duplicate of 2CO in the arena at this time and we do much, much more behind the scenes than anyone will probably every realize to ensure our compliance.

Kristin

What sets 2CO apart from 3PPs is that we don't just 'talk the talk."

We truly take ownership of the products that we sell on behalf of our registered vendors -- that includes fraud and liability ownership.

Should we start forwarding our technical support helpdesk requests to you, then?

:)

I fail to understand the logic behind your statement, when it comes to web hosting.

You are not providing the web hosting service that the customer is paying for. To me.. what you wrote is nothing more then semantics and a bit of mumbo jumbo.

The end-user web hosting customer is most likely unaware that their LEGAL CONTRACT for hosting services are with YOU. Otherwise, the terms of service on just about every web hosting client you have is incorrect and invalid. These web hosting company's can't have a contract with someone who isn't even their customer.

is akin to telecommunications and utilities. So are mortgages loans.

These products are sold and resold and resold yet again.

I've seen bad webhosts put out of business by dissatisfied customers going to their upstream providers and effectively having them shut down. Does your product originate with you? If so, you are in the minority.

2CO is the same in many ways. I can remember one infamous webhoster (who was the topic of many a thread here for months) several years ago. He went belly up in a most spectacular manner. 2CO didn't hesitate and made good on all of his contracts with his customers. Why? Because we did sell the product and made a bad decision about who we chose to deal with to supply that product.

There is nothing that prohibits 2CO from subcontracting out fulfillment of almost any product and I guarantee, if you stopped servicing your accounts tomorrow and you were a 2CO vendor, the customer would definitely remember to call that phone number that appears on their bill each month. It belongs to 2CO.

Kristin

Kristin,

With mortgages, there are contracts that define the relationship, in very fine detail. Nobody EVER signs mortgage papers and believes THEY own their home. They know 100% that the BANK owns the home. The contact is with the payer and the bank. The bank can reseller the loan on the open market, but they still have a contract with the bank. If the bank sells the loan to another bank, then there is a provision for this in the original contract.

Nobody is denying that 2checkout has their phone number on the cc statement or that the customer is paying YOU for their web hosting.

That isn't the point.

The point is that YOU are effectively charging the customer for a service that YOU are not providing.

Almost any customer who uses a web host who uses 2checkout would never imagine that their "contract" is actually with 2checkout and NOT with the actual web host that is providing the final service.

That's my point.

It's wonderful that you carry the liability and all that... but unless YOU are actually providing the end-user hosting service.. then I fail to see how you are any different then:

1) I set up a merchant account.

2) CrappoHost gets a customer.

3) CrappoHost sends "their" customer to me. I charge the customer's card.

4) Customer believes that their "contract" is with CrappoHost, even though MY name appears on their statement each month.

What is the difference? To me, it's the definition of 3rd Party Processing.

No?

I think you are intentionally missing the point.


Anything sold can be resold. Basic economics.

It is the terms under which it is resold that make the difference.

Utility companies "resell" electricity or long distance service. I can buy up a utility company's book of business, permit them to keep their "brand" but effectively own the product itself. Depending upon the contract I develop I either am or am not responsible for any outages or shortages that result from my upstream provider. Many hosting companies and long distance carriers state that they ARE NOT responsible for outages resulting from events outside of their immediate control.

This is the type of contract that companies prefer because it limits their liabilities. It is akin to the 3PP model.

Anything sold can be resold. Basic economics.

Third-party processors do not accept the same level of liability as 2CO. They basically permit the vendor or their processor to control the transactional processes. 2CO handles more than 70,000 telephone calls from CUSTOMERS every month. We do that because we contractually and ethically take ownership of what we sell. This is a valuable addition to our international merchants because the primary consumer base (US, UK, CAN, AUS) likes knowing there is a US-company effectively guaranteeing service, resolution or satisfaction.

Your argument is effectively proving the difference between 2CO and 3PPs. We have intentionally accepted additional liabilities and responsibilities and LIVED UP TO THEM. We are responsive, interactive and invested in the ecommerce community and discussion groups within the industry.

You agree to sell your product and/or fulfillment services to 2CO.
2CO agrees to pay you for the product.
The consumer agrees to buy the product from 2CO.
The consumer agrees to pay 2CO for the product.

There are also a great many timelines and nuances involved that would turn this into a lengthy discussion indeed. I could get into transactional batch error examples, for instance. But they are there and they may very well have made the difference between 2CO's surviving a compliance review and other companies not faring so very well at all.

Have a great weekend!

Kristin

I recently reported a site that was using 2CO and apparently selling products included in 2CO's prohibited list (they were selling wine and gift certificates).

After 2CO read and responded to the support ticket, the site I reported was immediately suspended by 2CO.

I just checked now and it seems that the site is up and running again and they have fully complied with 2CO's requirements.

That seems to be a huge difference from PayZip where it seems they have a whole bunch of customers selling products on their prohibited list and getting away with it.

My experience with 2co has not been positive. I found their support people to be rude and unhelpful, and trying to get them to pay you on time is an ordeal.

I think you are intentionally missing the point.

Anything sold can be resold. Basic economics.

It is the terms under which it is resold that make the difference.

You agree to sell your product and/or fulfillment services to 2CO.
2CO agrees to pay you for the product.
The consumer agrees to buy the product from 2CO.
The consumer agrees to pay 2CO for the product.


Lol. Here is a thread that proves my point:

http://www.webhostingtalk.com/showthread.php?t=513790

Apparently, here is one of your customers who didn't know he was your customer.

lol.

So are you still going to convince me that 2checkout isn't just another 3pp, or should I find yet more examples in these forums where your customers didn't know they were purchasing web hosting from you?

I use 2CO, too, and are fairly happy with them.

Being outside the U.S., it seems the only viable solution available for us.

However, I'm trying to find out what makes 2CO any different from PAYZIP.

Generally, our clients are very happy with 2CO and I just want to address their concerns and fears.

I've actually contacted 2CO already and will be waiting for their response.
Try Protx. You get a merchant account from your bank, then use their services for a small fee.

Try Protx. You get a merchant account from your bank, then use their services for a small fee.

Thanks. But that's of no use for me, being in the Philippines. It's good to know though that there are other options. However, for very small volume sales, even the GBP20 a month is a lot.

But I guess for anyone having a sales volume exceeding, let's say, $5,000 a month, they probably have a lot more options available to them. So it's mind-boggling why they use PAYZIP, 2CO, or other 3PPs.

Even in the Philippines, I can find something like Protx from our local banks. The only problem is their fees are way out of reach for start-ups (e.g. $10,000 hold out).