[melonie_charm]

I just received the following from my website's online credit card processing service, IBill

MasterCard Compliance Initiatives

Dear Merchant,

In an effort to remain in compliance with MasterCard regulations regarding aggregate transaction processing, iBill, as well as all other processors, will be required to initiate changes in the way aggregated clients (iBill Catalog Complete clients) accept and process MasterCard payments. These new MasterCard regulations will result in changes to iBill processing operations. Consequently, due to the nature of your business, your iBill Catalog Complete account does not qualify for any of the alternatives that we are able to offer in regards to the new regulations. iBill regrets to announce that in order to continue processing for your account, MasterCard will need to be disabled on your account so that you will not continue to process transactions utilizing MasterCard effective August 22, 2003.

Well, there goes about 50% of my remaining website membership!  It appears that MasterCard has gone the same way as PayPal, in effectively declaring that they will no longer accept online transactions involving adult businesses after next month.  Well, I guess that leaves IFriends video chats and live club appearances ...  

 

[Dick_Woods]

We are so sorry, darlin'.....we just don't know what to say....

Love and Light -D&J    

[Chronicler]

WHAT THE HELL? How ludicrous! Is this just the policy of that service, or is this a global phenom, so to speak? Meaning, would you be able to change services and still operate? OMG. I know there is probably another topic about this somewhere but I have been out of the adult site loop for a while now.
 
 

[melonie_charm]

as I read it, this was a decision made by MasterCard regarding the implementation of new policies and requirements in order to comply with the Patriot Act.  MasterCard has obviously decided to set a new policy which takes this one step farther, and simply stop processing transactions for smaller adult businesses.  Adult businesses which have a conventional business property, like strip clubs, multi-girl "corporate" websites etc. are able to obtain "credit card merchant accounts" from commercial banks, and MasterCard will still allow the processing of charges by these adult businesses.  But single girl adult websites or any other adult businesses which are online-only and which do not own and operate a physical place of business are being left out in the cold.  MasterCard's policies and regulations apply to ALL processing services, so there's simply no way around it.  I certainly can't afford to buy a strip club in order to operate an adult business with a brick and mortar facility so that commercial banks will allow me to open a "merchant account" such that I could process both strip club and website transactions on MasterCards.

The alternatives this does leave open are "partnership" arrangements where the girl does not actually operate or control the website herself, i.e. PhotoClubs, IFriends, (fill in the blank)'s World, and other big boobs supersites.  However, this means the girl must typically give up 50% of her website section's earnings to the actual website owners, or simply work for a one time modeling fee and giving up 100% of her website earnings to the actual website owners.  This also means that a girl must typically give up decision making power in regard to the features/content her website section offers.

I guess the girls who have been avoiding the internet and instead concentrating on those $750+ an hour "private sessions" with fans in hotel rooms had a pretty good idea where the economic future of this industry lies. I'm not going to follow in that direction, so I don't know which direction my own future will take.    

[Zasha]

 

Quote:
  It appears that MasterCard has gone the same way as PayPal, in effectively declaring that they will no longer accept online transactions involving adult businesses after next month.

I don't think it's that, as much as Mastercard dragging their feet about reporting customers as per the Patriot Act.

iBill must be running scared about it at the moment - I think it'll change after a short time, when MC figures out that they won't be able to be processed anywhere.

You might look at Christine's thread about it...GloBill has completely been shut down by the government for not reporting anyone.

Still, it's certainly a bummer.

>EDIT:  I was writing this as Melonie was posting the above...

[melonie_charm]

GloBill was not shut down by the government - GloBill was shut down by the credit card companies because they did not follow the policies and procedures set down by the credit card companies in regard to transaction processing for adult businesses (which in turn put the credit card companies in a position of being in violation of the Patriot Act's investigation and transaction reporting provisions).  MasterCard has essentially just done the same thing to IBill, CCBill and every other processing service where non-brick and mortar adult business are concerned, presumeably to cover their own butt with the government in regard to potential Patriot Act violations caused by processing services but for which the credit card companies themselves will be held responsible.

In point of fact, the non brick and mortar adult business segment has always been a pain in the ass to credit card companies.  Many fly-by-night websites would appear, often offering pirated material and/or very poor customer service.  Then a month later members would cancel but the fly-by-night websites would continue automatically rebilling them anyhow.  This would eventually result in MasterCard having to issue refunds to fly-by-night website members and Mastercard attempting to enact chargebacks to the fly-by-night websites in an attempt to recover the money which they were forced to refund (often with little success, leaving the credit card companies to eat the loss).  As such, the credit card companies in general had more problems and less profits from the non brick and mortar adult business sector than with any other sector.

The credit card companies are simply using the Patriot Act as a sort of excuse to do away with this relatively troublesome and unprofitable business sector.  Unfortunately, my own website and the websites of many independent girls, which have always tried to provide members with their money's worth and which have bent over backwards to personally resolve member's problems and complaints, have simply been lumped together with the fly-by-night operations and thrown overboard.  Considering that a site like Danni's Hard Drive or ScoreLand or PhotoClubs each have 100 or 1000 times more members than I do, and considering that all of these sites have brick and mortar businesses such that they will still be able to process MasterCard charges, MasterCard will not miss any lost business from my website or the websites of other independent girls.  The money they will lose from our websites probably won't even equal the amount of losses they will no longer have to eat as the result of refunding improper charges by the fly-by-night websites and not being able to recover the money.    

[Zasha]

Ah...I see...Obviously I was running on a little too much inference and speculation...

I stand corrected!

Thanks Melonie...And I really do hope that things come together a little better...

So who's left to process besides CCBill?  Can you use non-states based processors?  Or does that not pencil out, due to flaky exchange rates?

>EDIT Again, written while Melonie was posting the above!

[BazBear]

Mel,

Before you lose all hope, try contacting Subgirlie (who has moved into the world of web consultant and seminar speaking). I seem to recall her mentioning that she knew how to get a merchant account without being a brick-and-mortar enterprise. It's worth a shot anyway.

Best of luck to you!

~Baz~  

[melonie_charm]

good thought, but unfortunately commercial bank based "merchant accounts" fall into the same category as "Swiss bank accounts".  If you managed to open one under the old rules, you can keep using it.  But if you are seeking one now, you must comply with the NEW rules as well as arbitrary commercial bank policies.  In my area, this basically translates into having an actual brick and mortar storefront of some kind plus paying a four figure fee for the required personal and financial investigations.  I began checking out this angle when Visa processing services started charging non brick and mortar adult businesses a $750 annual fee for investigation and transaction reporting.  I certainly don't know everything there is to know on the subject, though, so thanks for the lead.

I could probably go through all of this bulls#!t if I had a mind to (like renting a tiny out-of-the-way storefront for 3 months to sell my videos to the general public).  My point is that it's simply reaching the point where it's not worth the effort and expense based on what were already disappointing net earnings from my website compared to the time and effort it requires to maintain.  

PS offshore credit card transactions are prime territory for terrorist investigations.  I seriously don't need the CIA, NSA, FBI, IRS or anybody else poking around in my panties uninvited!

[Zasha]

 

Quote:
 PS offshore credit card transactions are prime territory for terrorist investigations.  I seriously don't need the CIA, NSA, FBI, IRS or anybody else poking around in my panties uninvited!

NOT arguing at all with that, but how's this for a (probably naive) thought:

Process offshore, attract their attention, be investigated, get cleared, and then forgotten.

It seems to me like it might be a serious pain, but it would be more attractive (to me) than being constantly updated in a permanent database...They'd look and say, "Oh, yes, we investigated her, she's just getting naked for money.  Move along...Move along..."

If it worked out that way...

 

[melonie_charm]

I appreciate the input and encouragement, but A. there's no guarantee that an offshore credit card processing services would still be able to process MasterCard charges to cardmembers residing in the USA even if the "business" were located offshore (Patriot Act still applies unless MasterCard moves its own headquarters offshore I assume), B. this would also require moving to an offshore web host creating tons of extra work and potentially impacting the expenses side of operating my website, and C. I would not be able to bring back the money collected from those credit card charges to the USA without raising yet another red flag for large cross-border electronic funds transfers. With my mom's health problems, there is no way that I could move offshore myself right now, which is what really needs to be done to sidestep this problem (although with the way things are going in this country it's probably something to keep in mind regarding future possibilities).

Like any investment, one has to be cognisant of the risk vs. reward equation.  This one appears to have a great deal of risk in return for zero actual reward (negative if you count  the required investment of additional time and money, the likely higher web hosting costs, funds transfer fees etc).  A much smarter investment would simply be to shut down my member site and apply that effort to IFriends or live club appearances instead, which is the direction I am leaning in at the moment.

[MunchWolf]

Quote:
 I seriously don't need the CIA, NSA, FBI, IRS or anybody else poking around in my panties uninvited!  

There are invites to poke around your panties???

-Munch "Where do we sign up?" Wolf

[jaytas]

Erm. So doing the VISA thingie and paying US$750 a year is still an option? That is without a physical store front?

And what is this partior act anyways? Does the USA governemtn think it is unpatriotic to look at nude women?

Also I am not sure how I subscribed to your site but is was not mastercard as I cannot get a new card as they don't issue them to unemployed people. So I must have done it through VISA. Or failing that some other way.

[shadowcom]

MC>I just received the following from my website's online credit card processing service, IBill

Single solution is to become again a member of "www.photoclubs.com". The lost for commissions, will be less than 50% of your current business.

[Cutter]

This is distressing that apparently all of these or probably most of the sites like yours, (Vixen, Kiesha, etc) will be shut down because no one can get charges or money for membership.  

To bad that no one can set up a brick and mortar location to provide specific server space and hence shelter for all the loviles out there.

This I think is what the government wanted to appease the religious right wing goosesteppers in regards to adult entertainment.  They could not leagaly shut anyone down so they find and end run to accomplish their useless desires.  These sites hurt no one.  They may offend someones sensibilities, but you don't like don't look.

I am sorry Milady,  

Cutter