educational

IPSP Update: 08-08-03

One of the two biggest issues facing the adult Internet today, staying on top of the ever-changing transaction processing situation is not always an easy thing to do. With changes occurring daily, and sometimes hourly, having the right information to make important business decisions is vital for the financial health of your company – here’s the latest:

While much of the recent commotion has been focused on what VISA is doing within the marketplace, there is another major player that is dictating new terms for compliance and ongoing processing relationships – and that is MasterCard. While this brand does not account for as large a percentage of adult Web revenues as does VISA, they are certainly a force to be reckoned with, especially for those Webmasters who dropped VISA in favor of so-called ‘lite’ processing arrangements that focused on MasterCard as a way of avoiding the former processor’s newly instated fees.

This ‘hop scotching’ between merchant / processor relationships might provide some dubious short-term comforts for smaller players, but it is a naive approach that does not take into consideration the broader scheme of things, as if the goings on at VISA are occurring within a vacuum. The latest billing processor (IPSP) to address MasterCard’s concerns is iBill, who released a statement earlier this week:

"As you know, iBill has invested considerable effort in conjunction with our acquiring bank and MasterCard to submit a compliance plan for our clients that would meet the revised MasterCard processing regulations. As a result, iBill was the first merchant to gain approval from MasterCard for their compliance plan. Since approval of iBill's compliance plan, we have continued our discussions with MasterCard to lobby for approval of additional changes to the submitted plan, including the feedback we received from our clients. We are pleased to notify you that we have received approval on key changes to our compliance solution that result in a revised solution which is easier for our clients to implement…"

In an attempt to make the new MasterCard compliance process easier to understand, iBill is providing clients with a Flash demonstration of their revised solution. I’ll outline the basic steps that Webmasters will need to take in order to be compliant with MasterCard’s new demands for the purpose of illustrating the brand’s concerns, and as a window on the potential future of our relationship with them – and other banking entities:

The principal steps that Webmasters will need to take are simple, but telling, involving minor alterations to your sites that include the removal of all MasterCard trademarks and logos, and clearly identifying iBill as the "merchant of record." Once these steps are taken, your sites will be submitted to iBill for compliance review and approval – a process expected to be completed as soon as possible, since "Any client site not approved by iBill’s compliance team as of midnight on August 21, 2003 will result in the inability to process MasterCard transactions on that site." Once approved, Webmasters will merely be required to update the payment button codes on their sites.

While this process seems simple enough, it’s not too difficult to read one thing between the lines: MasterCard does not wish to have it’s brand tarnished by association with the adult industry. While they have not yet (publicly) decided to go the way of AMEX, discontinuing the processing of all adult related transactions, there is a clear distancing underway. This isn’t necessarily a bad thing however, since they will (for now) still allow us to process cardholder transactions, while taking steps to protect their brand in what is becoming an increasingly hostile legislative (and anti-porn activist) environment. MasterCard’s willingness to continue in this market in exchange for some minor adjustments in the status quo is a quite reasonable gesture on their part.

Another requirement is that Webmasters must submit a description of their sites and choose a suitable category for them. According to MasterCard, the description must "be sufficient for a reasonable person to ascertain what the underlying Website will provide to the cardholder based solely on the iBill description." Once a Webmaster has created their description and selected a category, their site will automatically be submitted to iBill’s compliance review team for approval.

Examining this requirement, it appears to be a content validation process for the purposes of charge back reduction – in other words, when the IPSP is certain that a participating Web site actually offers all of the advertised content, then there is one less argument that can be made by the consumer complaining that he "didn’t get what he paid for…" This seems to be all well and reasonable, and while I am sure that iBill’s legal team has gone over the particular wording of this requirement from MasterCard, I can’t help but feel that there is a potential vulnerability to liability here, and at the very least opens the door to IPSPs being forced into the role of ‘censor.’ This is a seed that once planted might yield an unexpected crop.

iBill should be acknowledged for their proactive role in smoothing their client’s transition into compliance with the new MasterCard regulations, and for heeding client feedback throughout this ongoing process. Hopefully, such two-way co-operation will help ensure the long term viability of the online adult industry. Stay flexible ~ Stephen

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

profile

WIA Profile: Leah Koons

If you’ve been to an industry event lately, odds are you’ve heard Leah Koons even before you’ve seen her. As Fansly’s director of marketing, Koons helps steer one of the fastest-growing creator platforms on the web.

Women in Adult ·
opinion

What France's New Law Means for Age Verification Worldwide

When France implemented its Security and Regulation of the Digital Space (SREN) law on April 11, it marked a pivotal moment in the ongoing global debate surrounding online safety and access to adult content.

Corey D. Silverstein ·
opinion

From Tariffs to Trends: Staying Resilient in a Shaky Online Adult Market

Whenever I check in with clients these days, I encounter the same concerns. For many, business has not quite bounced back after the typical post-holiday-season slowdown. Instead, consumers have been holding back due to the economic uncertainty around the Trump administration’s new tariffs and their impact on prices.

Cathy Beardsley ·
opinion

Optimizing Payment Strategies for High Ticket Sales

Payment processing for more expensive items, such as those exceeding $1,000 per order, can create unique challenges. For adult businesses, those challenges are magnified. Increased fraud risk, elevated chargeback ratios and heavier scrutiny from banks and processors are only the beginning.

Jonathan Corona ·
profile

WIA Profile: Lexi Morin

Lexi Morin’s journey into the adult industry began with a Craigslist ad and a leap of faith. In 2011, fresh-faced and ambitious, she was scrolling through job ads on Craigslist when she stumbled upon a listing for an assistant makeup artist.

Women In Adult ·
profile

Still Rocking: The Hun Celebrates 30 Years in the Game

In the ever-changing landscape of adult entertainment, The Hun’s Yellow Pages stands out for its endurance. As one of the internet’s original fixtures, literally nearly as old as the web itself, The Hun has functioned as a living archive for online adult content, quietly maintaining its relevance with an interface that feels more nostalgic than flashy.

Jackie Backman ·
opinion

Digital Desires: AI's Emerging Role in Adult Entertainment

The adult industry has always been ahead of the curve when it comes to embracing new technology. From the early days of dial-up internet and grainy video clips to today’s polished social media platforms and streaming services, our industry has never been afraid to innovate. But now, artificial intelligence (AI) is shaking things up in ways that are exciting but also daunting.

Steve Lightspeed ·
opinion

More Than Money: Why Donating Time Matters for Nonprofits

The adult industry faces constant legal battles, societal stigma and workplace challenges. Fortunately, a number of nonprofit organizations work tirelessly to protect the rights and well-being of adult performers, producers and industry workers. When folks in the industry think about supporting these groups, donating money is naturally the first solution that comes to mind.

Corey D. Silverstein ·
opinion

Consent Guardrails: How to Protect Your Content Platform

The adult industry takes a strong and definite stance against the creation or publication of nonconsensual materials. Adult industry creators, producers, processors, banks and hosts all share a vested interest in ensuring that the recording and publication of sexually explicit content is supported by informed consent.

Lawrence G. Walters ·
opinion

Payment Systems: Facilitator vs. Gateway Explained

Understanding and selecting the right payment platform can be confusing for anyone. Recently, Segpay launched its payment gateway. Since then, we’ve received numerous questions about the difference between a payment facilitator and a payment gateway. Most merchants want to know which type of platform best meets their business needs.

Cathy Beardsley ·
Show More