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Is The Sky Falling? Part 2

Is The Sky Falling? Part 2

July 2, 2003
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" As was stated by Craig Tant (Sex Key) “…we believe is that every site will have to be registered, and pay the $750.” "

After a long and tedious few months of speculation, rumors and facts being presented to those of us in the adult industry working on AEN (formerly known as AVS) sites, it seems that VISA has put a strain on AEN companies to start re-working and renaming their sites to fall under the 'Adult Entertainment Network' name. What does this mean to us as webmasters, and more importantly to the industry as a whole? This is what we shall address in today’s article.

A Little VISA History Lesson
This whole mess started in October of 2002, when CCBill, Epoch, and iBill jointly issued a new set of operating guidelines that had been passed onto them by VISA. In effect, this meant that 3rd party credit card processors had to be re-classified as 'IPSPs' or 'Internet Payment Service Providers' which also in turn meant that webmasters needed to start paying 'fees' to VISA (via their IPSP) in order to continue charging their surfers for access to products and services by using VISA issued credit and / or debit cards.

In addition to the initial $750 fee, however, there is also a need to pay an ongoing fee of $375, with two thirds of this fee going directly to VISA, and the remaining balance going to the issuing banks and IPSP's for administrative charges.

Shortly after this announcement was made, the industry got dealt another blow by the processing companies; this time in the form of Paypal announcing that they would no longer accept any adult orientated payment through their system. This went into effect on May 12th 2003 and, after initial speculations as to what could and could not be charged to Paypal accounts, it seemed to be the final nail in the coffin for some of the smaller webmasters.

However, the adult industry is strong, and rallied together getting as much information as possible about alternates to both of the above situations, and companies such as Stormpay, and off-shore IPSP's, started to see an increase in revenues from adult payments.

As The Waves Settled - The Next Blow
Given all of the financial troubles of the previous 10 months in respect to online adult payments, the industry as a whole started to settle itself again – of course there was the usual posting about conversion ratios and shaving discussions happening on the main forums as there always was, but in addition to these conversations more rumors started, this time regarding the AVS business model.

Almost as quickly as these rumors started however, they seemed to have fizzled out into nothing but a distant memory, but two months later, after the first round of initial conversations on the industry message forums, the same AVS business model was dealt another devastating blow.

It seems VISA has its sights set on AVS (Age Verification Services / Systems) with a press release being issued first by Sex Key, then by Free Age Card, which was followed by similar announcements from Global Male Pass and Gay Passport, informing adult webmasters that they had 2 days to make their current AVS sites conform to the new requirements set down by VISA. These requirements were:

1) Adult webmasters can no longer use the term 'AVS' on their sites.
2) Adult webmasters can no longer use the term 'Adult Verification Service' or 'Age Verification Service' on their sites.
3) Adult webmasters can no longer state that surfers joining up to their AVS will have 'Access to thousands of other AVS protected sites'.

As usual, Adult Webmasters started to question the reasons behind this sudden and apparent change of AVS rules on almost every forum – and whilst most questions went unanswered, the one thing that was answered (honestly) was that these new rules had been set down by current AVS IPSP's, who had these rules issued to them by VISA.

So, webmasters started to change out their tour page’s text to conform to these new rules, and for the most part, it seemed like that was all that was needed to be 'safe' working the AVS business model. Little did they know...

One Last Blow To The AVS Webmaster
Several days after the initial press releases from some of the top AEN (Formerly AVS) companies was made, it seemed that in between all of the posting on the boards that yet another issues comes to light - That VISA is aiming to have AVS webmasters now pay a $750 fee for the benefit of being able to keep using this business model. As was stated by Craig Tant (Sex Key) “…we believe is that every site will have to be registered, and pay the $750.”

This belief, although somewhat vague, tends to draw conclusions, that through no fault of their own, the AVS / AEN business model in the adult industry as we currently know it is changing, and changing for the worse. If webmasters are forced to pay VISA a $750 registration fee per AEN system or per AEN site, then a lot of today’s industry leaders are going to come unstuck, especially those that focus solely on the AVS / AEN model for the primary source of income.

Adult Entertainment Networks - What’s Next?
This is the question that is currently being asked by many webmasters and, the truth of the matter is simply that nobody knows - Except for VISA. The next few days, weeks and months are going to be quite telling on the industry as a whole; from what happens to current sites inside the AVS / AEN company’s websites, to what happens when surfers start to propagate back onto the adult Internet looking for their fix of high quality porn.

Two things however are definitive throughout all of this: VISA is homing in on the adult industry, and every webmaster needs to be concerned about what will happen next…


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