SCOTTSDALE, Ariz. - Astral Financial Group now offers the Check 21 billing system, which it says enables better fraud protection and can help adult companies avoid the content restrictions of Visa and MasterCard.
"Continued tightening of Visa and MasterCard acquiring banks regarding content and business models in the online adult space makes any new method of billing potentially a welcome one," Astral Financial Group President Michael Sperber told AVN Online. "Check 21 may be one of the best of these new solutions, at least for the U.S. and Canadian traffic market."
Under the old Automated Clearing House system, Sperber said, a check written to a local merchant was deposited in the merchant's bank. The merchant then sent the check by plane to a Federal Reserve Automated Clearing House, which processed the check and sent it back to the client's bank, which canceled the check and transferred the funds to the merchant's bank.
Sperber said Check 21 was developed after the terrorist attacks in the United States on Sept. 11, 2001, grounded aircraft for several days. With Check 21, he said, an image of a check is electronically sent through the Federal Reserve, so checks clear and NSFs (non-sufficient funds) show within a day or so.
Under this system, a customer initiating a chargeback must go to his or her bank, fill out a form to stop payment on the check and pay a fee ranging from $20 to $30. Sperber said this goes a long way toward eliminating the "friendly fraud" problems associated with the easy chargeback process available through online Automated Clearing House transactions.
Sperber said Check 21 also allows Astral Financial Group to conduct more extensive "fraud scrubbing" in each transaction, ensuring that the account exists, has sufficient funds and that the customer is not a bad-check writer. The system does not require a reserve of 5-10 percent in addition to fees, Sperber added.
