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  1. #1

    How will Visa/MC's regulations on 3rd party processors affect the industry?

    How do you feel this will affect the industry? The way I'm looking at it, it will make it difficult for international companies to be in business, and will create a barrier for entry into the business for start-ups., which seems like this would be a bad time to cater to hosting companies. (ev1, servermatrix, cpanel, reseller hosts, etc).

    Very sorry to hear about the ones hit by this.

    Share your thoughts....

    Zak
    CEO of SingleHop

  2. #2
    Join Date
    Nov 2003
    Posts
    933
    Please post a link to said regulations may make it easier for some people(me included) who are unaware of the changes.

  3. #3
    Join Date
    Jan 2004
    Location
    Germany
    Posts
    359
    Exactly, everyone talks about this new regulations but noone knows what they are ;-)

  4. #4
    Originally posted by Lorenz
    Exactly, everyone talks about this new regulations but noone knows what they are ;-)
    I heard that this may be a problem 6-8 months ago from a guy in that field (CC processing). All that he told me was that sheltering the merchants is against Visa and MC's policy.

    Nevertheless, it's quite obvious that the policy will affect 3rd party processors, so how do you feel it will change the industry, if at all?

    Zak
    CEO of SingleHop

  5. #5
    Originally posted by midPhase-Zak

    Nevertheless, it's quite obvious that the policy will affect 3rd party processors, so how do you feel it will change the industry, if at all?
    It's very difficult to speculate on this without actually seeing what these new policies/regulations are.

  6. #6
    Join Date
    Jul 2004
    Location
    NYC
    Posts
    380
    I am not sure how this will affect the hosting companies in the long run; however I can say that we've already started to feel the short term effects. I can't say for sure but considering the timing I think the reason our sales dropped in the last few days had something to do with the paysystems closing accounts for a lot of hosts. I hope the situation gets resolved asap

  7. #7
    Join Date
    Jan 2004
    Location
    Ontario, Canada
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    2,270
    I would say if everyone has to go to true merchant accounts to accept Creditcards then younger people running hosts will become difficult as I believe you have to have a business account and to have a business account you need to register your business and I believe many of the younger hosts don't tell their parents about what they are doing and it would be tough for them to go through all that without troubles. However if paypal is able to survive that may save them. Besides that I don't think anything drastic will change. Hopefully it will make the hosting industry stronger.
    Greg Lubbelinkhof

  8. #8
    Join Date
    Jul 2004
    Location
    NYC
    Posts
    380
    That's a possible long term effect. Right now it just slowed down sales of every company that caters to hosts, like ours. It's not too bad, but I would love for it to go away soon.

  9. #9
    Join Date
    Aug 2003
    Location
    Vancouver, BC
    Posts
    1,894
    Honestly I think it is good for the industry as a whole for everyone to have there own merchant accounts. It is to easy to set up a 2co or other payment processor and sell anything. One thing I think will be interesting is to see how this will affect resellers.
    Gary Jones

    BlueFur.com - Canada Web Hosting

  10. #10
    Join Date
    Aug 2003
    Location
    Chesapeake, VA
    Posts
    3,381
    Ok... on the rules & regs - a much asked question. Let's get specific here.

    Specifically, Visa recognizes Internet Payment Service Providers (IPSP) and their "sponsored merchants."

    An IPSP is a "third party processor" that has a contract with a Member Bank and which completes a registration process with Visa.

    An IPSP has "sponsored merchants" that it sets up under its merchant account.

    Visa holds Member Banks ultimately accountable for the actions and operations of all IPSP's as well as their sponsored merchants.

    The full guidelines, rules and regulations governing IPSP's and credit card processing in general are voluminous - I'm talking several-inch-thick volumes... not the kind of thing that can be explained adequately in a post.

    But in a very condensed version - there are rules on the type of accounts that can be approved, restrictions on unacceptable merchant types, guidelines on the mechanics on how things should be operated, specifics on the descriptors that need to be displayed on cardholder statements and Web site requirements.

    Failure to abide by all of these rules can subject a Member Bank - and subsequently the IPSP - to substantial fines and/or termination from the program.

    This can also have the natural trickle down effect to impact all merchants under the IPSP and terminate them from processing as well.

    Thus, if an IPSP doesn't effectively manage its risk or becomes non-compliant or otherwise in breach of its responsibilities to its Member Bank, merchant agreement or Visa policies - you could be looking at very bad news indeed.
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  11. #11
    Join Date
    May 2001
    Location
    Colorado, USA
    Posts
    814
    Is 2checkout doing something similar as Paysystems? How about PayPal? They seem to expand their services for merchants. Is this maybe just a Paysystems fluch?
    Web Hosting Resource Kit - Web Hosting Reviews & Hosting Tutorials

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