Interesting lawsuit coming up

[MichelH]

PSW Internet Billing has started a lawsuit against Visa/MasterCard. To read the full complaint, visit http://pswbilling.com/press/lawsuit-081604.pdf

For a brief summary, go to:
http://www-1.officialspin.com/main.p...ecent&rid=1740

I'm very curious to see how this will develop. My vote goes to PSW as I am familiar with the ever changing Visa/MasterCard requirements.

Just curious to see how anyone else feels about this...PSW is going for a trial by jury (I'm from the Netherlands, so I don't know if that is common for such trials.) If I was in that jury, I would definitely vote for 'Guilty as charged'!

[jestep]

I find this a humorous lawsuit that is going to cost PSW a lot of money and will probably end in their termination. PSW processes for adult websites, because adult websites are too high risk to process on their own.

To sum all of this up, PSW is a 3rd party processor, who is complaining much like Walmart did that they should be cut a deal and shouldn't have to pay the same price as the rest of the world, because they are somehow better or more deserving than the rest of the world.

To me this is a case of a company that is already bending the rules who is now complaining that they are being treated unfairly. If they win, we will see a similar occurrence to the walmart lawsuit, where they will get a better deal, and everyone else in the world will have to pay more.

This is also the reason that I now boycott walmart. Since their lawsuit, they have cost everyone else in the world billions of dollars in processing fees. Gotta love that superstore.

[Netbilling]

Originally Posted by jestep

I find this a humorous lawsuit that is going to cost PSW a lot of money and will probably end in their termination. PSW processes for adult websites, because adult websites are too high risk to process on their own.

To sum all of this up, PSW is a 3rd party processor, who is complaining much like Walmart did that they should be cut a deal and shouldn't have to pay the same price as the rest of the world, because they are somehow better or more deserving than the rest of the world.

To me this is a case of a company that is already bending the rules who is now complaining that they are being treated unfairly. If they win, we will see a similar occurrence to the walmart lawsuit, where they will get a better deal, and everyone else in the world will have to pay more.

This is also the reason that I now boycott walmart. Since their lawsuit, they have cost everyone else in the world billions of dollars in processing fees. Gotta love that superstore.

Actually, PSW is already out of business and that is one reson they are suing. It is too long to go into detail here but they were certainly wronged by the card associations and FDC.

Mitch / Netbilling

[MichelH]

I agree. The problem here was not the processing for Adult businesses. Every processing company will experience or already has experienced the same problems. Look at MyPaysystems, one of the bigger players in the market.

In the past, we have been processing for adult and gambling sites and that was no longer allowed. Okay, after that they had a requirement that the processor and the merchant needed to be in the same country, after that didn't work they put a hold on aggragating. We came with a retail model (just like 2CheckOut) and now they are changing the rules again. Our retail model is under review (meaning that anything they don't like about that model will eventually mean that they will tweak their requirements again so we have to make changes again.)

The big problem with Visa/MasterCard is that they tell you about new rules and give you a week to be in compliance or else they will fine you big time. Than, you have two options: Or disconnect Visa/MasterCard for a while untill you have made the changes technically, which makes your customers run away.
Continue to process Visa/MasterCard and get fined 2,500 USD per day, which will get you bankrupt eventually.

And I don't even want to consider MasterCard's chargeback policy here...it's ridiculous.

[jestep]

And I don't even want to consider MasterCard's chargeback policy here...it's ridiculous.

I have to agree with you on this. The chargeback policy, or lack therof is one area that Visa/MC really need to address. Essentially there aren't any set standards, because card issueing Banks have their own policies, and processing banks have their own policies, and then there is Visa and Mastercard policies.

I am working with a merchant right now, that has been charged back 2 times from the same order, has won both, and now a third chargeback has been issued, and the issue is now in arbitration. The sale took place over a year ago, so there shouldn't be any problem, but someone found a loophole.

A lot of the time it is the consumer who is wrong, or is unable to read their credit card statement, and the merchant has to pay for it.

The truly rediculous thing is that there is no penalty for making a chargeback and loosing. If a consumer makes a wrongfull chargeback and looses, they should have to pay a fee for it. The merchant has to pay whether they win or loose. The laws only protect the consumer, so the merchant always gets a bad deal.

[MichelH]

I know, especially with credit card orders, the customer is always right. Even if there is a signature for receiving the product, the customer can always say: I didn't know what it was, so I accepted the package. There are plenty people out there who abuse this system and commit fraud this way and the merchant has shipped the product and ALWAYS looses. People that do these chargebacks can apply for a new credit card without any problems, even if they have made tens of retrieval requests.

The other way around: Only one bad merchant can cause severe problems. We have had a travel agency from the U.K. (Harlequin Travel Limited). We always paid him on time and all of a sudden, chargebacks are flying in. The merchant is gone. We have filed a complaint to the Birmingham Police, but will probably never see that money again and guess who has to pay the money back to the customers?

I hope that merchants will finally understand why they have to wait for their money. They don't seem to understand the risks involved for credit card processing companies.