3d Party Processing: An Epoch Update

The Team at EPOCH

Many webmasters seem to be confused regarding the new Visa regulations. After seeing some of the questions being raised in correspondence and on the boards, we felt the best way to address some of these issues was to provide an FAQ and hopefully clear up most of the confusion.

First, let me say that this is an issue between contracted clients and billing companies. If you are a reseller/affiliate, you need to be with a sponsor program that is working within the rules in order to protect your interests. However, registration fees and reporting of URL's does not apply to those of you who sell traffic and are not under contract with an Internet Payment Service Provider (IPSP). Reseller/Affiliates should concentrate on working with reputable programs that in turn work with reputable billing companies. Discussion regarding the new rules is best left to those directly affected... the contracted clients and billing companies.

Second, speculation regarding the new rules has been rampant and bordering on insane. The new rules are designed to help Visa track those programs causing the greatest damage to the system and their brand. The fact that Visa is working with IPSP's at all proves that they are familiar with our model and are working with us to improve it. It is not the goal of Visa to eliminate adult transactions but to help insure longevity of this model before other factors prevail and cause devastating problems to the industry. Visa is the tool that has allowed you to be in business in the first place accounting for approximately 70% of all online U.S. transactions. Visa is not the enemy and they are working to insure our ability to continue to do what we do. A registration fee to maintain that integrity is not unreasonable.

Third, if you are a small company and feel that the fees are too exorbitant, perhaps you should reevaluate your business plan. However, Epoch will work with small programs to pay the registration fee over time if necessary.

The sky is not falling and the end is not near if you play by the rules. Understanding the rules is important and I hope the following will help clear up some of the confusion.

Here are a few answers to some commonly asked questions.

What are the main points of the new rules
There are two specific points that should be considered. First, all websites are now required to register with Visa and Visa will monitor all transactions more closely to find those programs that are exceeding the thresholds for credits and chargebacks. So, if your credits and cb's are in line and you are processing at Epoch you have nothing to worry about. All Epoch clients are within The reporting of data to Visa to the URL level will eliminate offenders trying to hide amongst multiple billing companies. Epoch has already been reporting this data for 18 months and is within all required credit/CB thresholds. You should look at your ratio's and determine what billing solutions offer your program the most protection from excessive credits and chargebacks.

The second point to consider is where you are registered to do business. If you are a U.S. company, your transactions should be settled by a U.S. IPSP. Sending a denied transaction from one billing company to another could be dangerous if that transaction ends up being settled outside of your region and your are not registered with Visa to do business there. If you are not a U.S. company and wish to do business with an U.S. IPSP, you must have a presence in the U.S.. Incorporating in the U.S protects you from these problems.

How do I register with Visa?
Epoch will be providing an online form for purposes of registration. The form will be available beginning Monday and discontinued on October 24. All clients must submit the registration form by that time.

The registration of your organization will be presented to Visa by Epoch by November 1st. Once your organization is registered, the information can not be changed or amended.

What if I don't register?
All clients who wish to continue billing using Visa as a payment method are required to register by October 24th. If you have not registered by that time, Epoch will cancel all recurring memberships billed with Visa and block all future Visa transactions and/or close your account.

How will the Visa Registration fee be collected?
Epoch will collect the fees by deducting them from payouts. Watch for Epoch News via email for more information as to when the fees will be deducted.

I started using third party processors because I lost my merchant account in the past. Will Visa terminate my ability to process with IPSP's once I register?
Visa is working with IPSP's to control credit and chargeback issues. If your ratios are acceptable and within guidelines, Visa has indicated that they will not terminate processing if registration of your organization takes place during the initial registration process.

Other processors are claiming to be exempt from the new Visa rules. Are there grandfather clauses or off-shore entities that are not affected by these new rules?
The new Visa regulations are world-wide. No one, no program, no processor is above the rules. Although the registration fees are only for U.S. companies, the rules are being enforced internationally. Sponsored merchants found to be in violation of the new rules after November 1, 2002, will be terminated in the Visa system for all future transactions. All IPSP's will be forced to decline indefinitely any processing for a sponsored merchant terminated by Visa.

What information will be required on the Visa registration form?
Epoch will post the registration form online behind a password protected area of reports. You will be required to submit the name of your company, the principals of the company, where you incorporated to do business, your account password, and your contact infor- mation including address and phone number. You will further be required to agree that all URL's, websites, and domains that do business with Epoch are submitted to Epoch currently and going forward. You will also be required to list all other billing companies that you are doing business with.

I am a foreign webmaster and want to incorporate in the United States. Can you tell me how to go about this?
Epoch has put together a list of 5 companies that can help clients incorporate or set up LLC's in the state of their choice. Although we can not be in a position of recommending one over the other or endorsing any outside services, we will make this list available to Epoch clients by request. Write to and include your company code to obtain the list.

Can I just stop accepting VISA transactions?
Visa is a payment method and you could block all Visa business from your account. However, this would also mean that all rebilling for Visa transactions would also have to be canceled and since Visa is roughly 70% of online credit card transactions, this would not make sense.

If someone uses EPOCH, CCBill and IBill they would have to pay $750.00 for each one or $750.00 for all?
The fee is IPSP (Internet Payment Service Provider) specific. Each IPSP is required to register all Sponsored Merchants for which they process. The fee is applicable to to each IPSP accepting Visa transactions. The registration fee is applied to each sub-merchant for each IPSP, therefore, you pay the fee for each processor you use.

Epoch clients are not required to pay the registration fees per company code, but by MasterCode.

What are the Visa Chargeback thresholds?

2.5% Foreign 1.0% CDC (Customer Disputed Chargebacks) 2.5% Overall

I have my own merchant account, am I affected by these new rules?
No. Your acquiring bank should notify you of any changes that would affect your business. The new Visa rules effective in November are designed for those sub- merchants that do not have their own merchant account.

I don't have a merchant account. Should I get one?
Processing high risk transactions through your own merchant account will become much more difficult after November 15th. 97% of all acquiring banks will no longer be allowed to accept or process high risk transactions once the new Visa rules are enforced next month.

Where can I find information regarding the new regulations on the web?
Visa does not post its reg's anywhere. Nor can you get a copy of them anywhere. The only entity with the reg's is the acquiring banks and Visa themselves. Epoch was provided this information by our banks.

Will one sponsored merchant be able to have more than one master account?
Yes. A master account is a contract. You may have more than one contract. This would only allow you to have alternative payment methods/locations however (one per contract). Each Master account must be registered separately.

Will it be possible to send payments for each master account with the same payee to different addresses?
The new Visa reg's have nothing to do with disbursement of funds. Payments may be sent to the address on the Master-Code (contract) level. They may not be sent to more than one address per contract.

Do payments need to be sent to addresses in the US?
No. Again, the reg's do not address payments. They only address settlement of transactions. The new regulations were indeed written by Visa International, not Visa USA. The new rules are global and affect all regions and all IPSP's.

Are the new rules applicable to Visa USA only, or are they also enforced by Visa International?
The new regulations were indeed written by Visa International, not Visa USA. The new rules are global and affect all regions and all IPSP's. The only difference in the U.S. and the International rules is the Visa International is not assessing the registration fee at this time.

If I am a foreign webmaster and I incorporate in the U.S. do I also need to open a U.S. bank account?

If I am a foreign webmaster and I incorporate in the U.S., does this mean I must pay U.S. taxes?
You must consult your corporate tax attorney.

Can I register to do business in more than one region?
Yes. You may do business wherever you are registered to do so. However, you can not process across region borders for the same business. This means if you register with processor A and send denied or alternating transactions to processor B, then processor B must also settle transactions in the U.S. Offshore settlement is not allowed if your site is registered to do business in the United States.

IMPORTANT: Websites must submit transactions in one region only.

Do the new rules apply to all retail sites or just adult sites?
The new rules apply to any sub-merchant using a third party processor for billing Visa cards online. If you have your own Merchant Account, the rules don't apply to you.

Are all IPSP's required to submit these fees?
No. So far only IPSP's in the United States are required to submit the registration fees. The rules regarding reporting and registration, however, are international.

Can I process foreign transactions through EpochSystems/, IBill, CCBill, WSB?
Yes. The new rules do not address where your customer is coming from. Only where the transactions are settled. You may send your foreign transactions to any billing company to whom you are properly registered with Visa that in turn can settle the transaction in the appropriate region.

I use a processor for recurring transactions that I no longer use for new business. Must I pay the registration fee to the processor who only does rebilling?
If you wish to maintain recurring transactions with an IPSP that you no longer use for new business, you will still need to pay the registration fee for that processor. The new rules are for all Visa transactions and do not distinguish between initial or recurring transactions. There are no grandfather clauses. Further, you can not continue recurring transactions with a non-U.S. based IPSP if you are going to register as a U.S. business. Violation of this rule, even for one transaction, will be $25,000 for an occurrence after October 31.

We are working to insure that everyone receives the information they are looking for and to eliminate as much confusion as possible. It should be noted that the major programs that we have spoken to are confident that this is a good move on the part of Visa and will ultimately help the industry's longevity. We value your business and will make every possible effort to insure that it is protected now and into the future.

If you have additional questions regarding the new regulations, please send them to Be sure to include your company code with all correspondence if you are an Epoch client.

-- The Team at EPOCH