Over the past few months, there has been a lot of speculation over the future of AVS systems and how they could be affected by the changing rules of the credit card processing game. Today, more fuel has been added to the speculative fires…
For those who are somewhat unfamiliar with the term AVS, it has traditionally been used as an acronym for “Age Verification Systems” – although with most credit card companies flatly stating that credit cards cannot be used as a method of age verification, some AVS’ are now positioning themselves as “Access Verification Systems.” While the use of credit cards for age verification purposes was acknowledged by Congress as a valid means of preventing a minor’s access to online pornographic materials, the credit card companies obviously don’t like the ‘burden’ – especially given their desire to inflict a growing level of debt upon society’s youngest members – as evidenced by the recent television campaign aimed at providing children with “Disney” emblazoned credit cards.
With this shift from providing ‘legitimate’ age verification towards simple ‘access verification’ services, AVS systems (in my not so humble opinion) will soon be formally classified as IPSPs – no different than the likes of Epoch, iBill, CCBill, et al. and as such, will face the same regulations, and fees, as those other IPSPs.
Unfortunately for many small site operators, this will remove yet another option for payment processing, further tightening the economic noose, and forcing more adult Webmasters to make the choice between “free” or “flee…” For those who decide to go the ‘free site’ route, rather than simply flee the business, the inrush of sites newly liberated from the restraints of AVS regulations and cost of access will further swamp the market with an increasing glut of free porn – making membership sales harder to come by for those remaining in the ‘pay for porn’ arena.
This tightening of regulations is evidenced in an announcement by AC Pay, a payment processor that bridged the traditional gap between AVS and IPSP, and only a few months ago assured Webmasters that they had banking arrangements that would allow their business model to remain unaffected by the recent VISA / MasterCard changes, at least for the foreseeable future – a future that has now arrived:
"In the interests of retaining the continued good relationship with merchant banks and providing our clients with the best possible service, AC Pay will be implementing some significant changes over the coming weeks."
"As of June 15, AC Pay will begin charging an annual registration fee to all clients. Clients outside of the United States and Canada will be subject to a $350 annual fee, while clients within the United States and Canada will be subject to a $750 fee. For clients doing business within the United States or Canada who have already registered with VISA through an IPSP, the $750 fee will be waived and they need only pay $350, with proper proof of registration. For clients with a certain transaction volume, AC Pay may, at it's discretion, waive some or all of the annual fees, on a per-case basis. Future clients will be required to pay fees to AC Pay before processing can begin. Existing clients will be sent a bill, as necessary."
"We will be providing more details over the next week, which should address many of your questions. If you have any questions in the interim, please email firstname.lastname@example.org. We expect a large number of questions, so our response times may be slower than average for a few days, but we will get back to you. To protect the privacy and security of our clients, we will not respond to posts on this or other boards. Sincerely, Cormac Foster Senior Product Manager, AC Pay"
While it may be too early to proclaim ‘The Death of AVS,’ change is coming and the handwriting is on the wall. While there will always be benefits to using ‘joint membership schemes’ – especially for smaller sites without large content bases – the future for many AVS systems who could lose a significant number of participating Webmasters if they’re forced to ‘pay to play’ is definitely in question. Only time will tell…
Stay flexible and re-evaluate your business and marketing plans ~ Stephen