Paysystems closes it's doors due to VISA/MC restrictions

[redcircle]

First heard it from my webhost who does billing for like 5,000+ customers with paysystems. Confirmed on the net

"Paysystems, a popular online third-party credit card processing company has suddenly closed all IBA accounts without prior notice to their customers affecting many online businesses."

Full article http://www.webhostgear.com/161.html

"This unfortunate situation is due in part to, restrictions imposed by the VISA/MasterCard association on processing of Internet credit card transactions by third party billing companies"

Does anyone know what these new restictions are. I know there is an approval process or something with VISA/Mastercard. What other 3rd parties would this effect?

[cyanide]

wow... that's going to hurt alot of people / businesses

[StevenAllen]

Redcircle,

Who is your webhost?

[redcircle]

100megswebhosting.com

[Corey Bryant]

Actually it is not new restrictions. Visa / Mastercard rules & regulations are always being re-interpreted by them. And Paysystems could not / would not keep up with it. As long as 2CO continues to morph into the new interpretations, 2CO will maintain their company.

It does not matter how well their business plan is written, no matter how you slice & dice it, 2Co will be a 3PP

[MichelH]

I won't say I told you so...
I have been warning about this several months ago. Even the 2checkout model is under review.
MasterCard compliance issues are as follows:
- The acquirer must directly enter into a written agreement with each merchant from which it acquires transactions
- All merchants that offer MasterCard as a payment method directly or indirectly must enter in a directly written agreement with an acquirer
- Merchants negotiates all terms of the transaction with the cardholder (size, color, style etc.)
- Merchant identifies himself to the cardholder at all points of interaction
- Merchant fulfills the terms of the transaction
- The cardholder generally initiates and completes the transaction with the same merchant at a single website.
- All merchants must have direct merchant agreements with acquirers

This technically means that a customer visiting a merchant using 2checkout may not be redirected to the 2checkout website/orderpage if the customer came in through the merchant's website.

The problems with Paysystems were caused by a continuous high chargeback ratio that they couldn't get under control.

[MichelH]

Even more interesting is that PSW, another payment processing company, started a lawsuit against Visa/MasterCard. The articles describes perfectly what payment processing companies have to cope with nowadays. If PSW wins this case, Visa and especially MasterCard will get more claims from other processing companies. You can read the full article here:

http://www-1.officialspin.com/main.p...ecent&rid=1740