educational

To Accept Visa or Not. . .

Stephen Yagielowicz

It is a question that surfaced late last year, but not one that has completely gone away. With the fairly recent changes in the way that VISA deals with domestic 3d party processors (IPSPs), and “high risk” merchants (such as those who run adult Websites) – including the imposition of a $750 annual fee, many small site operators, as well as newbies just venturing into the pay site game, are asking: “Is accepting VISA worth it?”

The debate started anew when ‘undermyspell’ asked the community “… for input from those of you that run sites that accept Visa (I’m mostly interested in pay site and sponsorship type programs): Did you pay the fee for VISA or not? And if you didn’t, did it hurt your signups by not accepting VISA and only going with MasterCard and online checks? This is something that I've been wondering about: If a sponsor does not accept VISA and only accepts other forms of payment, are their conversion rates a lot lower?”

While there are really two issues here: that of a pay site accepting VISA, and that of a “sponsor program” doing so. The latter is an easy question to answer, by posing another question: “Would you have any confidence in a ‘sponsor’ who could not afford a $750 fee, and trust that they CAN however afford to send you the payout that you earned?” Hmmm… Not someone that I would want to send my traffic to – and not someone that many other experienced Webmasters would likely trust, either!

The question of whether or not a pay site should accept VISA is also easily answered, but also poses a whole new set of circumstances and considerations. For the sake of this discussion, we will assume that the site owner asking this question is focusing on one pay site, and that this is likely their first attempt at doing so. Anyone attempting to run a network of multiple pay sites (like the ‘big boys’ do) really has no other choice than to accept VISA, as well as every other available (and realistic) form of payment.

But as to the root question of whether or not VISA should be accepted, the answer is of course, YES! While I can appreciate the noble sentiments of those who will forsake their profits to “take a stand against VISA” – the reality is that your boycott amounts to no more than a piss-hole in the snow – and that’s one hole that won’t pay your rent! There is simply too great of a percentage of your potential business at stake to not accept VISA cards. Having said this, the logical question then becomes not “if’ – but “How?”

The Root of All Evil
While paying the $750 VISA fee is a potentially insurmountable stumbling block for the smallest, newest, and most poorly capitalized sites (which is part of the idea behind the fee, as in "if you can't afford it, you have no business running a pay site!"), if you are determined to start your own pay site anyway, and do not have the minimal VISA fee, other options can and should be considered.

Folks like to point at 'off shore' processors and say "they don't charge it..." but I believe that's only a matter of time. This leaves the much talked about option of "start with them, and then switch over to your own merchant account or Epoch/ ibill/ CCbill etc. later once you make some money…" idea. Before you go this route, however, make damn sure of the processor's policies regarding the transfer of your recurring membership base, and the database behind it. It would really suck to build up a decent income stream, and then have to start all over from scratch, because you could not transfer your hard earned members!

I'm not saying that this can or does happen, just that you REALLY do need to examine the fine print before signing. I'd recommend that you have your own attorney look over the processing agreement for pitfalls before signing, but hey, if you could afford representation, you could afford to pay VISA...

Where does that leave you? How about starting with a premium-level recurring AVS site, while you build your traffic, content, experience, and income, then reinvest your profits into a more profitable billing solution? If you can't come up with $750 from running your site through an AVS, what makes you think you can legitimately profit from a pay site? (one of VISA's points I'm sure)

This idea becomes even more attractive when you consider that You don't need to scrap the AVS, just use it as a secondary doorway, and focus on promoting your pay site – in fact, you should retain your AVS gateway, and use it as a full-page exit console off of your pay site's 'join page' to capture surfers who didn't see the value in joining, but the incentives of an often lower cost, plus the added benefit of a million other sites, just might close a sale for you! Doing this of course may be against the AVS system’s policies (which often specify no pop-ups and the exclusive use of their system), but if they give you a bunch of grief (assuming they find out, and actually care), switch over to a different premium-level AVS – after all, they’re not hard to find.

Going this route allows you to accept VISA, right from the beginning, with no risk, no fees, and a raft of benefits that will help nurture you along until you reach a point where the $62.50 a month fee you will need to pay is simply a cost of doing business. Heck, it’s a write-off, and you should just be thankful they didn’t pull the plug like AMEX did… Good luck, and I’ll see you at the bank! ~ Stephen

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