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MC Comments on Rules 'Clarification'
>> By Eric J. White
May 6, 2002
PURCHASE, NY - Since the announcement on December 21, 2000 that PayPal
would become a co-branded service of MasterCard International, Paypal
associates have had another payment option. With MasterCard's recent
statement that it would no longer honor some third-party processors or
“aggregators” such as Paypal, Billpoint, CCBill, and IBill, many in the
adult industry have became concerned that their future might be in
doubt.
It appeared MasterCard was attempting to limit those
merchants that might not qualify, for any number of reasons, for their
own merchant accounts. Many adult Websites have been denied merchant
account status simply because they fall into a "prohibited" category,
or because they are delivering an electronic product that can’t be
physically signed for. Despite cries for payment options for online
merchants, no answers were forthcoming from any of the major card
franchises. This resulted in most online adult merchants resorting to
third-party processors.
The recent announcement seemed to many
in the adult industry to be a way for MasterCard to limit adult
merchants once again. To most online adult merchants, credit cards are
their lifeblood. This move by MasterCard might result in the closing of
some of those businesses, it was assumed.
Julie Anderson, media
and investor relations representative for PayPal Inc., clarified
MasterCard's position further recently in an email commenting upon the
impact the recent announcement would have upon PayPal merchants.
"With
regard to MasterCard: The MC association's recent announcement of a
clarification of one of its rules is prompted by their desire to have
more information about companies which accept MasterCard payments
through aggregators like PayPal and other online payment services (like
Amazon, eBay, and others)," Anderson wrote. "The question is then, how
do these types of companies provide MasterCard with the level of detail
the association would like -- and that is exactly what PayPal has been
working with MasterCard to determine over the last several weeks. We do
not expect to be asked to stop enabling MasterCard transactions for
PayPal merchants."
While this is not a blanket assurance for
merchants, and specifically merchants in the adult sector, it appears
the May 1 deadline imposed by MasterCard may not be the end of
processing.
Eric J. White is the president and chief scientist of Virtual Reality Innovations Inc., manufacturers of cutting-edge, high-tech sex toys, and a frequent contributor to AVN Online. He may be reached at ejwhite@vrinnovations.com or (717) 417-3344.
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