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Visa Web-porn CC processing regs invite censors

Thin end of the wedge

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Porno paymasters CCBill, iBill and Epoch/Paycom have issued a set of strict credit-card-order handling regulations for adult Webmasters using their services, which they say have been handed down to them from Visa International. The billing service providers, also called processors or aggregators, will now be responsible for a good deal more monitoring and record-keeping related to their clients, which henceforth are to be known as "sponsored merchants". The implication here, obviously, is that the billing processors are the ones doing the sponsoring, and are therefore implicitly accountable for the massive amounts of fraud and chargebacks which the on-line adult entertainment industry contributes to our happy lives as consumers.

Among the innovations is a prohibition against taking business from an overseas Web operation. This is clearly intended to ensure that 'sponsored merchants' are having their transactions handled through financial institutions in their own countries, no doubt on numerous complaints from banks getting shorted by overseas transactions. So to keep the banks happy Visa is going to require Webmasters to prove to the billing service providers that they have a 'presence' in the country where the CC processing is to take place.

The CC processors are getting a new name too. They're to be called Internet Payment Service Providers (IPSPs). It will now be their responsibility to ensure that merchants are in compliance with Visa International's rules.

Adult sites will be required to register with Visa, not just the IPSP. And they will be subject to greater individual scrutiny. "IPSPs are required to provide VISA with monthly sales, chargeback, and credit data for VISA's review, by each Sponsored Merchant and down to the URL of each Sponsored Merchant site. Sponsored Merchants who are out of compliance on chargeback and/or credit ratios may be terminated at VISA's discretion. Your ratios at all IPSPs will be evaluated by Visa," a letter from the big three IPSPs warns.

Credit statements must now show the IPSP's name and the sponsored merchant's company code, most likely to reduce chargebacks. It's not unusual for Net-porn purchases to be challenged by cardholders when nosey spouses begin asking awkward questions about charges from 'DaddysLittleGirl.com.' If hubby is a quick thinker he'll immediately ring up the card association and loudly insist that the charge is fraudulent. In most such disputes the card association opts to appease the faithful consumer with a chargeback.

Conspiracy theory

According to some in the Web-porn industry as quoted in a detailed article from AVN Online, this all smacks of Congressional backroom horse trading. If there's one thing the credit card associations want it's tough bankruptcy legislation which holds deadbeats responsible for consumer debt. (One shudders to think of the trillions lost over the years to bankrupts and the effect this has on the interest and service charges we pay.)

Visa and MasterCard desperately want legislation which will enable them to go after bankrupts once they've recovered from their difficulties or been rehabilitated from their general state of irresponsibility. That's hardly in dispute.

Meanwhile, we have a vast number of Puritanical sadists in Congress whose entire mission in life is to deny pleasure to others. That's hardly in dispute. Now, suppose these creatures were inclined to lobby hard for the credit-association bankruptcy Holy grail in exchange for a weapon they could use in curtailing the lascivious pleasures of Internet porn. That's the conspiracy theory.

The concern is that by demanding and maintaing records of each porn site down to the URL and business location, the IPSP and credit association databases will become a gold mine for content-based prosecutions of the sort which Lord Protector John Ashcroft has indicated a keen desire to pursue. Now, admittedly, content-based prosecutions are a tricky business in a country where free speech is just about the only constitutional liberty left untrammeled by the federal government (chiefly because the Holy Sacrament of Commerce depends on it); but it is undeniably convenient that the IPSP and credit association alike will now gain some deniablilty for 'leaks' by shifting suspicion onto each other.

One could certainly explain this self-regulatory mandate with a backchannel quid-pro-quo in Congress, though proving it is another matter altogether. Perfectly reasonable desires to reduce chargebacks and appease foreign banks explain it just as well. Still, porno Webmasters are likely to show apprehension, at least until Visa fully clarifies this curious new development. ®

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