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David Hoffman | dreamrecipe
When other services are locking you out or charging you fees, use the one without fees,no holdbacks,no chargebacks. www.pinpayecash.info
Confidential Analysis and Impact Review – New VISA Rule
Aug 4th 2010 at 4:32 AM
On March 31, 2010, Visa and the major credit card industry (“Visa”), issued a new rule which greatly and immediately impacts the risks that banks and credit card processors are exposed to when they offer an online merchant the right to accept credit cards for payment.
In reading the new rule, it seems like a good idea and only a very small number of “bad” merchant are being punished. However, to the leaned in the credit card payment industry, the new rule is a major change to the online payment industry.
As the industry becomes fully aware of the true implementation of this rule, over the next 2 to 3 billing cycles (60 to 90 days), it is likely that ten to fifteen percent (10% to 15%) on all of the online stores’ right to accept Visa and all major credit cards will be cancelled.
To validate this shocking development, I am personally aware of just one small credit card processor; who understands the true meaning of this new Visa rule…..and as a result has just cancelled credit card processing rights of 900 of their merchants that operate online stores.
These cancellations are from just one small processor. Of course, all 900 online merchants are now seeking a new processor. But the new Visa rule is going to make their search fruitless. They will find there are no credit card processors that will accept them; the processors and the sponsoring banks cannot afford the liability exposure risks that this new Visa rule imposes.
The logical reason for the new Visa rule is cover (the providing of a rational and legal excuse, including the added cover of an FTC blessing) for Visa to cancel these existing online store credit card processing agreements without claims of breach of contract or to be targeted for bad business practices by the regulatory agencies.
This is a well planned and executed “withdrawal” strategy, from a significant segment of the online store payment processing business.
Impact on PinPay
This Visa rule means that over the next few months, tens of thousands of online store merchants will be seeking a payment service for their website stores….and if they cannot find one, the merchant will go out of business.
Once credit cards are removed as a payment option, there are very few options available for the online merchant to offer their customers; PinPay is one of those options.
Over the last two days, PinPay has been contacted by a number of Visa merchant account sales agents who have merchants that need PinPay immediately. PinPay is operational and available to step into this online payment void which is being created by the new Visa rule.
One party said Visa has unknowingly strapped a rocket booster onto PinPay and lit the fuse. Clearly, the new Visa rule is having an immediate positive impact on merchant acceptance and future revenue growth of PinPay. Someone stated that timing is everything; and for PinPay the timing of the release of this new Visa rule could not be better.
Is PinPay going to step into the shoes of Visa, and facilitate these online merchants in performing miss-deeds on the consumer? The answer is NO. PinPay does not allow the taking of funds from any ones SoftCard account. The only way funds can be removed from a SoftCard account is if the SoftCard account holder specifically and directly instructs PinPay to make the payment. This is called a direct “push” payment order.
If the SoftCard holder gives a merchant in writing the right to withdraw funds from the customer’s SoftCard account, (called a “pull” payment order) PinPay will not honor the right to withdraw funds. Funds are only paid out of a SoftCard account by a “push” order; all “pull” orders are void.
That means that the tricks which some online merchants set-up which for example state that service is FREE, but the fine print states if you do not cancel in 9 days the merchant has the right to charge you credit card for a big purchase price. If the customer pays with a credit card the customer’s credit card company will pay the merchant submitted payment claim. If the customer pays with a PinPay SoftCard the merchant submittal will be rejected. One of the issues which the new Visa rule is attempting to eliminate does not exist when a consumer uses a SoftCard for payment.
For reference, a copy of the new Visa rule is attached. If you are interested in learning more, or need to understand the details of why this new Visa rule will cause these results; I am available to discuss.
Thank you for your support.
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