posted on November 21, 2000 10:48:36 AM new
I know many members on AW have found ExchangePath to be the right payment service for them and I'm suggesting you exercise a degree of caution. You don't put all your eggs in one basket. I've watched CMGI's performance for awhile and there may be some cause for concern. Year to date CMGI's value has dropped 90%, plumetted is a more accurate word. From a high of 163 1/2 to 11 3/8 and they seem to be on the verge of a bad week, a recent article in the WSJ hasn't helped them. Last week CMGI sold its entertainment Web site iCast and free Internet access company 1stUp.com. This comes on the heels of the previously announced closing of MotherNature.com and Furniture.com.
This is not meant to be a 'chicken little' post, only an encouragement to do a bit of reading on the web from news services (not message boards) on CMGI's present status and to use your own judgement.
posted on November 22, 2000 08:10:47 AM new
Drat and I just signed up for ExchangePath to use in place of paypal. Any idea on who would be a good choice for on-line payments?
posted on November 22, 2000 10:17:32 AM newAny idea on who would be a good choice for on-line payments?
This world is in disarray, due to what one might summarize as the PayPal fiasco.
Expectations are set way off course.
For one thing, credit card processing is not free, and never will be free. Expect to pay 4%.
Secondly, with regards to chargebacks, sellers cannot expect immunity. Ain't gonna happen. What sellers can expect is some tools to make an informed decision, address verification in particular.
Those are the two absolutes.
More flexible: should buyer be paying all or part of that 4%? Logically, yes, but maybe not.
A good payment sevice will look like the above. I don't think there are any as yet, but PayPal did blaze a trail which will eventually be turned into a highway by some real financial institution.
Efficiency wise, there is a layer to be eliminated. A bank which offers merchant accounts can do this job far more efficiently than can one of its customers, and as a side effect, such a bank can pass chargebacks directly to the seller, unlike PayPal or any of the current services.
Such a service would be a radical departure from the status quo by an institutiion not noted for inovation. But it will happen.
posted on November 22, 2000 09:53:48 PM new
Is CMGI still talking about spinning off parts of their operation? I know they changed their accounting a few months ago to facilitate this.
I really think Yahoo Paydirect is the best bet for payment services. Granted, Yahoo has taken a beating this year, too, but I think they are likely to be fully behind Paydirect. Plus, they can leverage the service in so many ways that Exchangepath can't even approach. Of course, all of these companies will start charging before too long.
And now you have Citibank getting into the game, and again, you've got lots of opportunities for leverage there.
I really don't see how Exchangepath can compete. And these companies can afford to operate the services at a loss for far longer than Exchangepath can.
I like Exchangepath, but I would be quite surprised if it were still around in six months.
posted on November 23, 2000 07:18:40 AM new
For those folks who are gung ho on Exchangepath (and until yesterday, I was one of them) I just received an email from them that shows there are extremely serious problems with this service. Basically, they told me that they do not record the cardholder's address at all. This leaves a giant loophole where any charge back will almost automatically go through and there is nothing anyone can do about it. Read about it here and feel free to email or post comments.
posted on November 23, 2000 09:32:50 AM new
Well Charge back when you Accept Credit card payments area fact of life no matter where you go it will be as well as any company that will servive will charge the fees.
I signed up for exchangepath but no one used it I dont like the way exchangepath works not sure how long they will be around but please not this is not going to be a free service.
They are offering all to try it free only.
I still beleave that the services that will survive are the ones that dont requirer the buyer to be a member. propay, billpoint so on . I find there is so much confusion with paypal right now that in the near future they are going to go this way to seller sends invoice buyer Wont need to sign up to use credit card only just if they want to pay with a bank account or hold incomeing money.
I Beleave also as soon as dec 1 rolls here you will find paypal offering the debit card and paypal will offer most the services xcom did just non FDIC insured I beleave though in time they will find to survive that they closed the wrong service.
FDIC checking and payment service will have a far better chance then the non bank type service paypal is trying to offer.
as well they could make more money offering personal online merchant accounts.and third party credit card services and far easyer to make it all international with less hastle better verification.
posted on November 23, 2000 11:02:53 AM newBasically, they told me that they do not record the cardholder's address at all. This leaves a giant loophole where any charge back will almost automatically go through and there is nothing anyone can do about it
There are three addresses in the equation.
1. The address buyer gives to seller
2. The address that buyer gives the payment service
3. The address that buyer receives credit card bill at
#2 isn't directly important. What we want is to verify that #1 matches #3. Now it does seem that the obvious way to do that is to verify #2 against #3 at payment time, and then allow #1 to be verified against #2 at shipment time, but there are other ways to get to the desired goal.
It does seem unlikely however that this payment service is taking the address verification requirement seriously.
posted on November 23, 2000 11:56:52 AM new
To clarify, I asked EP why they don't send the card holder's billing address to the seller with an instruction to ship to that address only. They replied that until last week when they upgraded their software, they were not recording the billing address. This boggles the mind. We have poked fun at Paypal for starting a business without understanding how it worked and making it up as they went along. But how can anyone go into the credit card business without learning rule one: always verify card holder's address? Can anyone who finds or has access to a CC just go to EP and open an account without even knowing the card holder's address? According to EP, that's possible. I've emailed them back for verification because this just makes no sense.
posted on November 23, 2000 03:31:40 PM newIt does seem unlikely however that this payment service is taking the address verification requirement seriously.
Why should any of these payment services take address verification seriously when it's so easy for them to handle fraud and chargebacks by freezing users' accounts and/or dipping into their checking accounts? (Excuse me, I mean "reversing deposits."
posted on November 23, 2000 05:15:27 PM new
>>Why should any of these payment services take address verification seriously when it's so easy for them to handle fraud and chargebacks by freezing users' accounts and/or dipping into their checking accounts? (Excuse me, I mean "reversing deposits." <<
That's rather a naive question. First of all, it is not guaranteed that the payment service can get the money. What if the seller used a free bank account with no money in it? Remember Romanian George? He took Paypal for about $20,000 and all they could recover was about $3000 from jshumko and then they had to return some of it. They took a big hit.
In addition to the charges themselves, there are charge back fees. The first few times there is a charge back, the bank takes a $10 or $15 penalty. As the number of charge backs grow, the size of the penalty grows. At some point, they can even be hit with tens of thousands and a requirement to post a hundred thousand or more for collateral. If it gets too much, their merchant account can even be cancelled entirely. Wouldn't you be curious to hear the the screams at Paypal or Exchangepath each time a new charge back comes along? And it is even worse when the charge back is the result of accepting a stolen CC because the merchant (PP or EP) is warned against this.
There are reasons why some banks refuse to have anything to do with Paypal and won't accept their ach transfers.
posted on November 24, 2000 06:34:38 AM new
Vargas: I'm sure it was, but there are a lot of folks out there who can't recognize sarcasm. There are still folks who think that when you make an Exchangepath transaction, you are giving them business and if you don't do so, they are losing business. The fact is that since they are currently losing money on each transaction, it doesn't work that way. There are folks who still think that they are making money on the float. I believe I have already proven that this is not the case. So when you use sarcasm to make a point, add a <g> at the end so folks know you're kidding.
posted on November 24, 2000 06:39:36 AM new
Just received a reply from Exchangepath. They state "The requirement for automated verification is a billing zip code. We
have recently upgraded our system and are verifying the full billing address. "
As someone who accepted credit cards, the procedure was to verify the ENTIRE address. If everything matched, I got back authorization. If the zip code matched but not the rest I got back a code which warned me and it was up to me to decide if I wanted to continue. After all, it is quite possible that the thief who stole the card lives in the same zip code. According to EP, ALL they check is the zip code. Pretty poor security. How long will these payment services leave such hugh security holes for the crooks to exploit?
My recommended free CC payment service list is down to Moneyzap. I hope I am not being naive in thinking that Western Union will do a better job of validating CC.
posted on November 24, 2000 07:42:33 AM new
There will alway be security lope holes on line when you dont ask for two or more forms of ID .
Paypal now does this but every one is against it so all cry security but refuse to give the personal info.
The best verification is from the company that requiers you to send a copy of a void check and copy of a bill with your address on it .
The day will come when you not only need to verify checking account and credit card address but also drivers licence this will make more people upset since not all have all three.
posted on November 24, 2000 08:45:49 AM new
>>The best verification is from the company that requiers you to send a copy of a void check and copy of a bill with your address on it . <<
Actually, the best form of verification is so simple and requires nothing more than already being collected - the card holder's billing address. If the receiver got the address with a note to ship to this address only, it would immediately reduce fraud by well over 90%. That is why I don't understand all the opposition to it or Paypal's stupid insistence that this is "priviledged information" and their recent stupidity of having the sender enter the address. If you are ordering something mail order, you should expect the seller to get your billing address. If you dont want this, go shop at a store.
Personally, if someone used my credit card to order something, I would feel a lot more secure if the vendor got my address and an instruction to ship there only. Kind of defeats the purpose of credit card theft.
posted on November 24, 2000 08:58:25 AM new
<i>such a bank can pass chargebacks directly to the seller, unlike PayPal or any of the current services</i>
I know of one service who gives you a free merchant account. I use ProPay for my small business but also use if for auctions for people who just want to pay with a credit card. Granted, they are 3.5%, but they do true credit card processing and Visa/Mastercard pass the chargebacks directly to the seller.
posted on November 25, 2000 02:34:44 AM new
The only problem with the ship to credit card billing address only theory is that what if I bought a refrigerator? I really don't think that is going to ship to my PO Box. This leaves people with PO Box addresses completely out of the loop to buy anything too big to ship through the postal service.
posted on November 25, 2000 10:37:54 AM new
Everyone SAYS "shipping only to billing address", but very few merchants actually mean it. If a customer presents a reasonable story of what's going on, and supplies the billing address for verification, they'll ship somewhere else.
What they want to head off is someone with just a number, someone else's number, trying to buy stuff.
posted on November 25, 2000 10:42:31 AM new
I was going to say the credit card billing address is great verification for sure but the companies have trouble with this since many billing addresses are PO boxes.
To be honest as a seller I have some question about shipping to PO boxes as some POs will accept packages to them and some will not they will just return to sender this gets costly.
we have had packages returned because of this from some Towns then other have no trouble with this at all. http://www.Dman-N-Company.com
