Whether it’s Webmasters ripping off customers or affiliate programs shaving the profits from program members, swindles have always been a part of the adult Web business. myVirtualCard (www.myvirtualcard.com) is looking to flip that paradigm and provide accountability and security for Webmasters. Maybe it’s a Herculean task, but these guys are pretty serious.
The 14-employee company was founded by Howard Cohen and Nortan Burah a year and a half ago, and in that short time, they have created a buzz around themselves in the mainstream and porn worlds, both through their very visible presence at industry conventions and events and through the usefulness and necessity of the service they offer.
“We decided that what was needed, especially in the adult industry, was a form of verification of the user prior to him or her making a transaction online,” explains Cohen. “The big problem was Visa and MasterCard coming down on the industry – lot of fraud, a lot of chargebacks, a lot of deception, people making transactions and denying them, and onward and onward. So we helped develop this technology, and we put it to use in the adult industry.”
The technology myVirtualCard offers is a simple: Customers interested in signing up for an adult Website give their phone number as well as their credit card number to myVirtualCard, then an automated service calls the user and prompts him or her to provide a PIN. If the PIN matches the card, the transaction goes through to Visa/MasterCard. If not, the transaction never hits the credit card company at all. So the ever-present threat of fraud from anonymous surfers is definitely lessened, if not eliminated.
“It deters a guy finding a credit card and using it every which way he can,” says Cohen “He needs to be at his house, so he needs to enter a phone number where he can be reached, so if it’s a fraudulent case, he’s burning a phone number where he is. Once that credit card number is in the system, it can never be duplicated again with a different name… so a guy can’t go find a credit card and go to 15 different pay sites using myVirtualCard and keep changing the username and phone number.”
According to Cohen, the advantages of the system are numerous and will become more obvious to Webmasters (and consumers) as more companies adopt the technology – something of a “critical mass” theory of security. “It’s just a matter of time,” Cohen said. “The more people who are comfortable with us – it’s a comfort level. People need see to see how long we’re going to be around, to see if people are going to be paid out.”
Achieving that level of comfort and familiarity with a new concept has proven a challenge for the fledgling Web company. According to Cohen, the most obvious hurdle between his company and widespread adoption is an issue familiar to everyone on the Internet: the desire for privacy.
“People say they want anonymity,” explains Cohen. “Anonymity is fine, but in 2004 we don’t live in the same world we lived in three years ago. There are much stricter rules, banking-wise, Visa-wise, and the feel in the industry is: know who your customer is.
“If a guy doesn’t want that phone call, if he doesn’t want to be verified, that’s the guy who’s going to charge back at the end of the month, that’s the first guy who’s going to create fraud.”
According to Cohen, it’s the Webmasters who have the most to gain from using myVirtualCard to verify their sales, and so far, Webmasters have been excited about the prospects of their service.
“We went to Internext Hollywood a year ago. We were nobody. We had an 8x10 booth, minimal size. We went down with an idea and a product, and the other [payment processors] were looking around, they were all looking at us and saying, ‘Who are these guys, myVirtualCard? Where did they come from? What do they have to offer?’ And we had over 800 people come visit our booth. Since we got our proper banking relationships out there and started processing, we’ve gotten over 15,000 verifications. We have only 20 chargebacks on 25,000 verifications.”
myVirtualCard’s presence at trade shows like Internext is no accident. The company strives to maintain a high profile in the industry in order to assure Webmasters that the company intends to be around for the long haul.
“You’ve got to be out there,” Cohen says. “We went to Amsterdam, we went to Vegas. You have to show a presence there, and let the people feel comfortable; and eventually, they’re going to come around and want to deal with you.
“We’re determined guys, and we’re going to be at this show, and we’re going to have every solution that every Webmaster would want out there. And we’re going in style.”
Another way of increasing stock when it comes to reliability and customer comfort levels is to partner with trusted companies. Cohen reports some close affiliations and business dealings with some of the bigger names in adult and mainstream. He didn’t want their names mentioned, but he says a giant electronics company and some major world banks and credit card companies are onboard.
Of course, this is the adult industry, heavy hitting partners or not, so myVirtualCard maintains a casual atmosphere at their offices. Cohen and Burah jokingly refer to themselves as “co-morons” as opposed to “co-founders,” and Cohen reports that the day-to-day operations are in line with that level of informality. “We don’t really believe in positions like CEO or president,” Cohen says. “It doesn’t make a difference, but Norton Burah is the president, and I’m the vice president. We’re team players… In all honesty, we’re referred to as ‘Batman and Robin,’ me being Batman. That’s who we are.”
