The high risk payment processing mirage

[JohnnyDoe]

"Somewhat safe" - I don't know much about cloaking, but wouldn't the "kosher", presentable payment website get chargebacks which can lead to an account suspension as well? I can see it being a solution for the adult entertainment business, but I don't see how it gets around an unsatisfied customer in other fields.

It doesn't, it's just a way to get accepted.
It's essential that you process refunds immediately, without any question asked, in order to minimize disputes. Despite all the care that you will put into the processing side of the business, eventually something will go wrong and you will have to start from scratch. Which is why you should always have 1-2 backups ready.

 

[chicharito]

I’m heading to an affiliates conference soon, and I’ve already received messages from payment processors, usually the larger companies. These guys have such nice websites, and it almost appears like they are somehow different from the small PSP operator that OffshoreCorpTalk is full of.

I don’t see how any of them have resolved the issues stated in this post, even though they argue that their solution “is perfectly compliant when it comes to the VAMP and SMMP debacle with Visa and Mastercard payments”. High-risk is still high-risk even if you add lipstick to a pig.

Ex: I got a message from payabl. They hire a goofy “compliance officer” to make posts about the exact problem this forum mentions:

Unmasking the Threat: Understanding Transaction Laundering and Safeguarding the Financial Ecosystem | payabl.com

And yet, I have a feeling that they’re just the cleanest shirt in the dirty laundry. All I see is the same business model that relies on a strong acquirer bank relationship, and an army of lawyers and a “compliance team” to jump through all the bank’s hoops, just to keep their customer onboarding.

Will they be the last shoe to fall? Kinda like the offshore banking sector dried up… and only the big players ended up surviving long enough until they too were closed down. I have a gut feeling that they’re now all trying to sell to the larger players in the industry, and the SMEs will need to work through fiat-to-crypto solutions.

 

[jafo]

I’m heading to an affiliates conference soon, and I’ve already received messages from payment processors, usually the larger companies. These guys have such nice websites, and it almost appears like they are somehow different from the small PSP operator that OffshoreCorpTalk is full of.

I don’t see how any of them have resolved the issues stated in this post, even though they argue that their solution “is perfectly compliant when it comes to the VAMP and SMMP debacle with Visa and Mastercard payments”. High-risk is still high-risk even if you add lipstick to a pig.

Ex: I got a message from payabl. They hire a goofy “compliance officer” to make posts about the exact problem this forum mentions:

Unmasking the Threat: Understanding Transaction Laundering and Safeguarding the Financial Ecosystem | payabl.com

And yet, I have a feeling that they’re just the cleanest shirt in the dirty laundry. All I see is the same business model that relies on a strong acquirer bank relationship, and an army of lawyers and a “compliance team” to jump through all the bank’s hoops, just to keep their customer onboarding.

Will they be the last shoe to fall? Kinda like the offshore banking sector dried up… and only the big players ended up surviving long enough until they too were closed down. I have a gut feeling that they’re now all trying to sell to the larger players in the industry, and the SMEs will need to work through fiat-to-crypto solutions.

After you attend your affiliate conference, can you then share which one it was and tell us how it went? I, for one, would truly appreciate this.

Thank you for sharing!

PS. Ask them, if you have the opportunity, what they think of crypto payments. Right now, most (+95%) of my non-wholesale clients pay with crypto. They WANT to pay with crypto. I wonder how the industry is dealing with this new "threat/competitor" now.

 

[Filda]

I’m heading to an affiliates conference soon, and I’ve already received messages from payment processors, usually the larger companies. These guys have such nice websites, and it almost appears like they are somehow different from the small PSP operator that OffshoreCorpTalk is full of.

I don’t see how any of them have resolved the issues stated in this post, even though they argue that their solution “is perfectly compliant when it comes to the VAMP and SMMP debacle with Visa and Mastercard payments”. High-risk is still high-risk even if you add lipstick to a pig.

Ex: I got a message from payabl. They hire a goofy “compliance officer” to make posts about the exact problem this forum mentions:

Unmasking the Threat: Understanding Transaction Laundering and Safeguarding the Financial Ecosystem | payabl.com

And yet, I have a feeling that they’re just the cleanest shirt in the dirty laundry. All I see is the same business model that relies on a strong acquirer bank relationship, and an army of lawyers and a “compliance team” to jump through all the bank’s hoops, just to keep their customer onboarding.

Will they be the last shoe to fall? Kinda like the offshore banking sector dried up… and only the big players ended up surviving long enough until they too were closed down. I have a gut feeling that they’re now all trying to sell to the larger players in the industry, and the SMEs will need to work through fiat-to-crypto solutions.

Payabl is Dietmar and Rudiger continuation of Wirecard-style payment processing (of course they wouldn't want to hear that comparison). The client books are cleaner than Wirecard and it does not need any fraud in terms of numbers inflation because it's not public. I also wouldn't expect safeguarding issues.

But as you catch, the compliance style is quite performative.

 

[chicharito]

Small rant from my research:

I think the major issue with the “naive operator” that you mentioned @JohnnyDoe , is that they fail to recognize one basic fact: the system is skewed toward the consumer rather than the merchant.

I.e. The customer gets the power to reverse the payment, while the merchant gets the burden of proving that the transaction was legitimate.​

That’s not how free trade is supposed to work. High-risk merchants are basically presumed guilty of fraud - or presumed liable for future chargebacks - until they prove their innocence.

And these PSPs keep swallowing the bank’s/ acquirer’s propaganda that somehow this is the merchant’s fault. They don’t want to admit that it’s a big club, and you Mr. New Kid on the Block ain’t in it.

The “chosen ones” by the mafia cartel will always get the red carpet to keep banking rails (the OnlyFans, Las Vegas, FDA cartel etc.). The average Joe needs to literally give a scan of their ass just to be “considered worthy” by an acquirer, and I shit you not, I’ve watched podcasts where PSPs immediately reach for words like “shady” and “fraud” if a merchant doesn’t instantly cough up 30 pages of KYC documents…

I compare it to the mentality of an abused wife trying to justify her husband’s abuse. The PSPs obviously don’t want to mention anything resembling “divorce” like… hey, how about we develop some more card-to-crypto options?.... because their whole business relies on charging a fee for “introducing” merchants to the abuser’s payment rails.

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Granted, I personally haven’t come across many good options for immediate card-to-crypto conversion (I’m all ears for them). Paybis Business is the closest thing I’ve found. I have zero experience with them, folks on Trustpilot say the fees are high and transactions are slow. I guess it helps with chargebacks, but I don’t understand how their slogan - “No more chargeback worries because we handle it all” actually works in practice.

The customer can still fraudulently dispute the card transaction. So what happens then? Does Paybis simply eat the cost?​

Anyway, from what I understand, cloaking through Stripe is a pain in the ass, but it is still probably the easiest guerrilla method for most newbies to implement. Seems time-consuming though, I guess instead of wasting time with a KYC anal-probe from a PSP, you’ll be screwing around trying to keep your site A from getting detected by crawlers.

Kinda reminds me of Yemeni houthis firing makeshift missiles at a US carrier (Stripe)…. cheap but time-consuming to build, and not a long-term strategy whatsoever.

 

[JohnnyDoe]

That’s not how free trade is supposed to work. High-risk merchants are basically presumed guilty of fraud - or presumed liable for future chargebacks - until they prove their innocence.

The so called high risk merchants sell illegal goods or services (replicas, substances, unlicensed fx etc) or run a business that is plagued by chargebacks. They are not “presumed” nothing, it’s just facts and statistics. Both sides would love to make money, but V/MC dictate the rules.

And these PSPs keep swallowing the bank’s/ acquirer’s propaganda that somehow this is the merchant’s fault. They don’t want to admit that it’s a big club, and you Mr. New Kid on the Block ain’t in it.

The “chosen ones” by the mafia cartel will always get the red carpet to keep banking rails (the OnlyFans, Las Vegas, FDA cartel etc.).

It’s not a conspiracy. Nothing prevents anyone from joining the cartel.

The average Joe needs to literally give a scan of their ass just to be “considered worthy” by an acquirer, and I shit you not, I’ve watched podcasts where PSPs immediately reach for words like “shady” and “fraud” if a merchant doesn’t instantly cough up 30 pages of KYC documents…

That’s a monkey problem, same as with banks.

Anyway, from what I understand, cloaking through Stripe is a pain in the ass, but it is still probably the easiest guerrilla method for most newbies to implement. Seems time-consuming though, I guess instead of wasting time with a KYC anal-probe from a PSP, you’ll be screwing around trying to keep your site A from getting detected by crawlers.

This workaround is soon going to end through implementation of AI for inspection.

Kinda reminds me of Yemeni houthis firing makeshift missiles at a US carrier (Stripe)…. cheap but time-consuming to build, and not a long-term strategy whatsoever.

It’s a problem with a very simple solution: crypto.
The day high risk merchants stop accepting credit cards and move entirely to crypto, customers will adapt. They always do when there is no alternative.
Bitcart implementation is easy, and XMR is the ideal payment currency.