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08-10-2004, 07:31 PM #1Web Hosting Master
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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....
ZakCEO of SingleHop
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08-10-2004, 07:33 PM #2Web Hosting Master
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Please post a link to said regulations may make it easier for some people(me included) who are unaware of the changes.
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08-10-2004, 07:47 PM #3Aspiring Evangelist
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Exactly, everyone talks about this new regulations but noone knows what they are ;-)
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08-10-2004, 07:58 PM #4Web Hosting Master
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Originally posted by Lorenz
Exactly, everyone talks about this new regulations but noone knows what they are ;-)
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?
ZakCEO of SingleHop
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08-10-2004, 08:03 PM #5Web Hosting Guru
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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?
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08-10-2004, 08:07 PM #6Aspiring Evangelist
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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
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08-10-2004, 08:20 PM #7Web Hosting Master
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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
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08-10-2004, 08:53 PM #8Aspiring Evangelist
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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.
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08-10-2004, 09:01 PM #9Blue, Furry and Comfortable
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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.
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08-10-2004, 10:02 PM #10The E-Commerce Answer Guy
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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.CDGcommerce.com - Trusted Merchant Account Solutions since 1998
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08-10-2004, 10:16 PM #11Web Hosting Resource Master
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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?
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