Here’s a little equation. Take one extraordinary, unregulated medium, add the basest of human desires, mix in credit cards and ten of thousands of independent operators, tally the results and what do you get?
A big, fat mess.
As much as I would like to blame the troubles of the adult Internet on VISA, I can’t. This wacky web thing took off so damned fast. Before anyone was prepared millions of surfers were whipping out their CCs in order to pay for online porn. They were also buying books from Amazon and bidding on Ebay. This new way of buying was easy, private and cool. The problem was it was also easy to defraud on web purchases.
There’s a big difference between a credit card purchase from the mall and one from the Internet. When you go into a shop and buy something, it’s a lot harder to prove you weren’t the buyer. For one thing, you’ve usually got a tangible item and receipt in your sack when you leave the store. If you use a credit card, you’ve got to actually sign a document of sale. If you use a debit card, you have to manually enter you PIN number. If you write a check, you have to show your ID.
Additionally, it’s likely the store has security cameras with your visage on tape. The clerk will be able to remember and identify you as the payer. When you buy from brick-and-mortar, it’s much harder to make fraudulent claims.
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"All the organic defenses a merchant had in the real world evaporated in cyberspace." |
On the web it’s easy for credit card holders to claim credit card theft or fraud. It’s doubly easy when the purchase involves digital porn. Merchant-friendly credit card company American Express bailed out of online porn way back. That left us all with customer-friendly VISA and MasterCard. VISA/MC used the same policies for transaction disputes on the net as they did for such in the material world.
All the organic defenses a merchant had in the real world evaporated in cyberspace. As a result, VISA was overwhelmed with claims of theft and fraud from cardholders. Chargeback ratios zoomed and it didn’t help that those uppity porn mongers and hardware geeks cooked up the idea of third party processing. VISA is now trying to get control of Internet purchasing and it’s a hell of a task.
When VISA swept in last year and changed things up with the third-party processors it rattled the industry. Now third-party processors are called Internet Payment Service Providers. The IPSPs who process for adult are High Risk IPSPs. Adult operators were told they had to pay a $750.00 fee for each of their sites. They also instructed to find an IPSP in their physical country and stick with it.
That made it a hard time for adult site owners who had been using IPSPs from outside their countries. Adult webmasters knew that when it came to credit card payments on their pages, if they were done by an IPSP, they would have to comply with VISA’s regulations. It was a tough period but most adult webmasters came through the fire okay. After all, they still had PayPal.
Of course, now we don’t have PayPal. This payment provider allowed surfers and vendors to create virtual bank accounts where they could deposit/receive money. It wasn’t exactly an IPSP but surfers loved it and it worked well for a lot of adult webmasters. Not long after Ebay bought PayPal, they announced there would no longer be adult transactions made through the PayPal payment system. The iron hand of VISA was not evident in this move but it didn’t help online adult.
The VISA factor is quite visible in this newest addition to the adult porn equation. Adult Verification Systems are now in the VISA tractor beam.
AVS? You think. Why them? Isn’t the AVS model supposed to be the badge of honor for the adult Internet? AVS IDs were great. A surfer purchased one for three purposes: One was to gain access to an affiliate site, two was to prove the surfer was of legal age for viewing porn and three was that the surfer also gained access to all the other sites in the AVS provider’s database. Adult Verification Systems were just another way to sell a sponsor program. What did VISA find wrong with AVS?
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Here’s what VISA doesn’t like. They don’t like advertisers marketing their credit cards as a proof of age document. They also don’t want us to tell surfers that they’ll get access to all the sites in an AVS provider’s inventory. The first one I understand, the second point has yet to be explained to me.
Nevertheless, if your AVS sponsor hasn’t informed you, changes are a coming. If you’re thinking about hooking up with an AVS sponsor read their TOS thoroughly and look to see if they’re abiding by these new guidelines. If they’re not, be cautious because the changes haven’t taken effect with all AVS providers. But if this all goes like it did with VISA and the IPSPs, this new AVS model will probably become industry standard. We can’t call them AVS anymore. We can’t claim the service as proof of age verification. We can’t tell surfers they get access to other sites in our marketing text or graphics.
Killing the two greatest selling points about AVS is going to tax the creative minds of AVS webmasters but they’ll come through with something clever. No doubt.
What’s more disconcerting are the mysterious rumblings from VISA about the AVS model and its resemblance to the IPSP model. VISA thinks that an AVS is pretty much the same thing as an IPSP. They’re considering if each individual AVS site would be the same as it’s high- risk merchant/IPSP counterpart.
This brings up the possibility that a webmaster might have to pay a $750.00 fee for each one of their AVS pages. It’s too early to say if any of this unpleasantness will come to pass. I hope not. At present, the situation is unnerving but not dangerous. I’m sure AVS affiliates and sponsors will find a way.
As I stated, I can’t blame VISA. This e-commerce thing is new. Way new. It’s a big glitch in their status quo. Internet fraud and chargebacks are VISA’s new headache. Adult websites are a large source of VISA’s grief. We should be glad they process for us at all. Contrary to the myth, online porn is a miniscule addition to the profits of VISA. We make a lot of money but VISA makes so very much more from so very many other sources than cybersmut.
It would be easy to blame VISA. It would be easy to rant and rave. But then I think of the alternative if VISA were to drop us altogether. I won’t blame VISA. I’ll just pray things get better soon.