They say that April’s showers bring May’s flowers, so I hope things are blooming nicely around you — or that you are at least thawed out by now.
This month I am going to discuss relationships and how important they are. While there is no question that relationships are important to your personal well-being, they are also important to your business’ well-being. As you can probably guess, I am going to concentrate on your business relationships, and specifically your relationship with your credit card processor — whether you have one processor, or you utilize cascading processors to help minimize denied transactions.
Arguably, the person or department you should be most familiar with is the risk/compliance department, and they should know you and the product you are selling.
These days, more than ever, it is important that you know your processor, and I do not mean that you should merely know the name of your processor. You should know the name of your contact and hopefully, they know yours. Arguably, the person or department you should be most familiar with is the risk/compliance department, and they should know you and the product you are selling. If you don’t know them yet, I would urge you to do some research to find their name and reach out to them.
So, why do I stress the importance of developing a relationship with your processor? Hopefully, you have read my past articles, and if you have, you should have noticed a pattern; I will always stress the importance of heeding the 12 Payment Card Industry Data Security Standard requirements for a merchant to become PCI-compliant. You are bound contractually to follow these 12 requirements, and your processor’s risk/compliance department should be there to help ensure that you are doing it properly.
If you read my article in April’s XBIZ World, page 44, you will recall that I briefly touched upon the rules for any business that offers subscription or other digital goods with a negative option billing/recurring billing model after a trial period. Be advised that the current rules will tighten up next month, as of June 8, 2022.
Speaking of relationships, I will presume that you, a responsible merchant of adult content, are aware that in October of last year Mastercard issued its “AN 5196 Revised Standards for New Specialty Merchant Registration Requirements for Adult Content Merchants.”
These new requirements were put in place to help prevent the distribution of illegal adult content across Mastercard’s network, and they target the age verification process of content producers, content pre-screening and verification, and the process of content removal. A few of these requirements include your having a written agreement with each content provider; they require the content provider to verify the identity and age of all persons depicted in the content and ensure that all persons depicted are adults — and you, the merchant, must be able to provide these supporting documents upon request.
The content provider must also obtain consent from all persons depicted in the content and keep records of such. Additional requirements include the merchant only allowing content uploads from verified content providers and having a robust process for verifying the age and identity of the content provider as well as a review process prior to publication of the content to ensure it is not illegal and does not otherwise violate Mastercard’s standards. Naturally, you cannot imply through your marketing that the content contains non-consensual activities or material that could be construed as exploitation of a minor.
The merchant must also provide and support a complaint process for the reporting of possibly illegal content, as well as a method for any person depicted in said content to appeal to have the content removed.
What does all this have to do with relationships? Since the October Mastercard enhancement, scrutiny by Mastercard, sponsor banks and processors has increased dramatically, especially for user-generated content; so know who you are working with, and maintain meticulous records.
If you were paying attention, you noticed I specified that the new requirements were put in place to help prevent the distribution of illegal adult content across Mastercard’s network. I think it is safe to say that while a public relations person may claim the company is acting for the best interests of society, the reality is Mastercard is protecting its own network. This is evident when you look at the company’s Business Risk Assessment and Mitigation program.
Mastercard states unapologetically that the BRAM program is in place to protect its brand; this means that the company is going to do its best to keep its credit cards from being used for anything illegal, or even giving the hint of impropriety. Mastercard cooperates closely with law enforcement, and requires you as a merchant to be aware of any and all applicable laws as well as Mastercard’s rules and standards. My personal recommendation is that if you are in doubt, leave it out.
Be cognizant of BRAM guidelines and pay particular attention to prohibited content and words. When it comes down to it, it is the merchant’s responsibility to stay informed of Visa and Mastercard regulations. I am sure you have heard the phrase “Ignorance of the law is no excuse.” Well, that is definitely applicable when it comes to Mastercard, and fines in excess of $25,000 can be assessed.
So, be sure to get to know the people whom you and your internet business are counting on. We in the payment processing industry are here to help support and protect your business, and the best way to make sure that happens is to maintain clear and open communication. That’s the kind of relationship you can rely on.
Jonathan Corona has two decades of experience in the electronic payments processing industry. As chief operating officer of MobiusPay, Corona is primarily responsible for day-to-day operations as well as reviewing and advising merchants on a multitude of compliance standards mandated by the card associations, including, but not limited to, maintaining a working knowledge of BRAM guidelines and chargeback compliance rules defined in both Visa and Mastercard operating regulations.
