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Mastercard Cuts Off Third Party Transactions
strredwolf writes "Mastercard has cut out third parties from charging on behalf of merchants. This affects folks paying their auctions and goods via Paypal, Yahoo! Paydirect, and potentially ebay's Billpoint. It may also affect Paypal's Mastercard-backed Debit Card, but there's no word from Paypal as far as I can tell." Word has it paypal is trying to negotiate a side deal with Mastercard.
The nice part about paypal is it lets you collect money without becoming a "merchant". Essentially, if someone wants to send $100 through paypal, they can use a mastercard and you won't have to sign a contract with various merchant services agencies to collect that money.
What I see: Mastercard could make a killing by cutting out the middleman (PayPal) and starting a new "personal merchant" program of sorts. Now, you can use your Mastercard Auctionman account to collect money from anyone around the world!
Makes sense....
Hmm?
What do you mean the system has to be overhauled?
One of the chief reasons the system is as big as it is is because the risk is shifted away from the client!
It has always been heavily on the merchant to make sure things are valid, to ensure that the credit card is valid, that it's being used by the right person, etcetera, becuase the merchant is the one that loses if it's not.
These companies cater to merchants by making sure they have a huge customer base who wants to USE their credit cards to buy things, and they reduce the amount of actual cash the merchant has to handle. THe onus has always been heavily on the merchant to keep things in order.
Since internet transactions don't have a signature, yes, it IS easy for the merchant to get screwed. But it's their choice.. they know the temrs.
I went and listened to what Mastercard had to say on the subject at the ETA conference in Orlando last week.
There is a very blurry line here for what they call aggregators. On the one hand they do not consider Ticket Master and Amazon aggregators but they do consider us to be. When asked why, it was basically no comment. At some point they may have to choose.
What they did make very clear is that they want to retain competitiveness with Visa. The adult industry, between top players mentioned in a previous post, process in excess of $1.2b every year not including Paypal. That kind of money can produce a lot of pursuading I can assure you.
What I can also tell you is that Mastercard is being very cooperative in finding a solution with all these players and we are confident of finding a solution. Certainly nothing drastic is happening for quite a while.
Robert
WebsiteBilling.com
This has been prohibited for as long as I've had my merchant account (over 12 years). It's called "factoring", and it's there to prevent account kiting schemes among other nasty types of merchant fraud.
About time the CC companies started enforcing the policies they make every other merchant abide by, yet turn a blind eye when it comes to online transactions.
And thus alienate the millions of banks and financial services companies that rely on selling (expensive) merchant accounts for their very livelihood.
This business is multi-tiered, just like the alcohol-distribution business. You've got the Big Four at the top (Visa, Mastercard, Amex, Discover), the merchant account companies, the banks (who sometimes double as the merchant account company), and finally the merchant. You scratch my back, I'll scratch yours.
Intercarve Networks, LLC