Over the past few months, I’ve received inquiries from merchants with concerns about what new card brand regulations are being developed for user-generated content and tube sites. Even though there is no answer to that yet, you can start preparing for what is likely ahead.
Since December, the card brands have been busy conducting audits of acquirers with adult in their portfolio. Many of our acquirers had senior management and board review of the adult space to determine if it is a market that they want to continue with. The compliance team bore the brunt of these acquirer audits and spent hours gathering information. Several put new oversight requirements in place that we need to now manage monthly.
Have your files organized so samples of model verification can be easily pulled. Acquirers are now asking for random samples of model verification.
We thought it would be a good idea to help others get ahead of potential reviews and questions that might be coming their way and this month, we share what to prepare for, how to protect your company and why having a solid foundation is so important.
THE FACT-FINDING MISSIONS
When Visa and our acquirers are on fact-finding missions, we typically have 24 hours to turn around requests. To make sure you are ready for those inquiries, below are key files or polices we were requested to submit for bank audit and review. It’s a good idea to have these in place. Be prepared for the following:
• Know Your Business/Know Your Customer File: The file should include full corporate documents, passports and utility bills for directors and UBOs, a current bank statement, Tax ID/VAT ID information, a utility bill or a lease agreement for the office.
• Affiliate Policy: What KYC do you do on your affiliates, what are your sources of marketing and what, if any, affiliation is there with tube sites?
• Model Age Verification: Have your files organized so samples of model verification can be easily pulled. Acquirers are now asking for random samples of model verification. Can you easily provide model age verification?
• User-generated Content Policy: If your site focuses on user-generated content, have a detailed policy outlining the content review process you have in place and any technology tools that help you monitor the content.
It’s a relief once you’re finished and once the process is completed, and we’ve satisfied the bank audits with the above, while acquirers remain committed to stay in the adult market. We hope this is the case for you too.
MASTERING THE ADULT MARKET
Visa isn’t alone in its hesitations; Mastercard is also conducting calls. We participated in some of them with the hope of helping Mastercard better understand the adult market, how tubes interact with paysites as well as sharing our policies with them.
Mastercard also reached out to several other payments companies in the adult market for feedback to help develop new guidelines related to user-generated content. They made it clear they wanted all businesses operating appropriately and following their current Business Risk Assessment and Mitigation (BRAM) guidelines to continue to prosper and utilize the card networks.
We feel it’s good news they’re asking for feedback and gaining a better understanding before rolling out new tube and user-generated guidelines. As you all know, guidelines that are too “gray” are a challenge to manage.
REGULATORY UPDATES ARE NOTHING NEW TO US
The thought of new rules is always scary but if you take a moment to think about it, we face new rules and regulations every year. At the time of rollout, they seem daunting, but somehow, we manage to get through them.
Just look back at all the chargeback and fraud threshold updates we have been through for example, Visa and MasterCard trial updates or maintaining compliance with GDPR; FOSTA legislation was also a challenge we all had to address. The good news is that we, as an industry, always rise to the challenge and meet new guidelines; in the end, we become better for it!
Having your files at your fingertips will protect your future. If you can present them to a bank, you can show you’re a well-organized operation. This will go a long way in giving them the comfort in taking your business.
Cathy Beardsley is president and CEO of Segpay, a global leader in merchant services offering a wide range of custom financial solutions including payment facilitator, direct merchant accounts and secure gateway services. Under her direction, Segpay has become one of four companies approved by Visa to operate as a high-risk internet payment services provider. Segpay offers secure turnkey solutions to accept online payments, with a guarantee that funds are always safe and protected with its proprietary Fraud Mitigation System and customer service and support. For any questions or help, contact sales@segpay.com or compliance@segpay.com.
