Switching Gears?

Stephen Yagielowicz

If you remember my series on using PayPal to process recurring adult site membership subscriptions, you will recall that I left off thinking that this was the best option – especially given the processor’s appeal to the non-adult sectors of my various marketplaces. Since completing that series, however, I have read several message board posts that *could* have changed my mind, but instead, have left me curious…

Problematic PayPal Posts
In my previous ‘Payment Options’ series, I stated that I was uncertain of how PayPal would respond to the recent VISA/MC changes, and while they had not yet posted any public notices about these policy changes, the various Webmaster message boards were rife with discussions about the dramatic ‘changes’ at PayPal.

These posts often stated that new fees and restrictions would be placed upon clients of this processor that exceeded those fees cited by the likes of Epoch, ibill, and others. Now I’ve been in this business long enough to understand that reading something on a message board does not make it factual. In fact, there is much more bullshit slung around the boards than at the Calgary Stampede – with this in mind, I take most posts with a grain of salt. Especially posts that claim a certain company is taking actions, actions that have not been ‘officially’ relayed to all of the participating merchants (like myself) that would be affected.

The problem is that several ‘Webmasters’ have claimed direct knowledge of some new fees and regulations, and since I haven’t been notified, it leaves me considering three possibilities: the simplest being that these posters were lying, for whatever reason - something that seems an unproductive waste of time, unless you enjoy conspiracy theories. The second possibility is that I have just not yet received official notification of these new ‘regulations’ - which strikes me as odd, since I opened my PayPal account well after the joint Epoch, ibill, CCBill announcement, and now, several days after the “November 1st Deadline” - there is still no mention of any VISA processing changes on the PayPal website. Business as usual, or so it appears…

The third possibility is that rather than “affecting all merchants who accept VISA / MC for recurring website memberships” these new ‘global’ regulations and fees only affect “all merchants who accept VISA / MC for recurring ADULT website memberships” - a distinction that has not been apparent in much of the hoopla surrounding this issue. If this is the case, then it leads to some very interesting questions regarding the way in which this whole revolution in merchant requirements has evolved, and been portrayed…

Regardless of the voracity of anyone’s assertions, reading message boards will give you a lot to think about, and can help you benefit from the thoughts and experiences of others. For instance, Rickyracer observed:

“As for Pay-Pal and Mastercard, the fee only applies to digital content (downloads & subscriptions). It does not affect merchandise sales (tangible items - tapes, CD's, etc). I only speak for me, but will share the fact the subscriptions with Pay-Pal make up less than 2% of our revenue, so giving it up is not a big deal for us. We can easily make up the $1,000 yearly Pay-Pal subscription loss by simply selling more tangibles... something that is becoming easier and easier to do everyday anyway and BTW, results in far less charge back issues to boot. IMHO, Pay-Pal is still the best way to move $$$ over the Net and with their new ability to accept and process the Euro and Pound, not offering Pay-Pal services is not a good biz decision. On the other hand, if digital products are the bulk of your products, you may be facing payment processing problems far beyond the current Visa / MC situation any way.”

What if it’s True?
While my first involvement with PayPal was to illustrate the ease with which smaller sites could still accept VISA / MC without having to pay any fees, I have to say at this juncture that regardless of any new fees that they may impose, I would still use them as my processor of choice, but that is just what is right for my own personal circumstances, and may not be what’s right for you. ...I would still use them as my processor of choice, but that is just what is right for my own personal circumstances, and may not be right for you.

Larger operations than mine are better off using the many services that Epoch or Net Billing, for example, provides, while smaller operations who want sophisticated reseller tools and member management services without having to pay any fees or obtain a merchant account may be better off with the next option that I will be examining in this series: AC Pay - Stay tuned!
~ Stephen