Visa USA no longer will allow its member banks to process transactions through CardSystems Solutions, effective October 31. The decision will not have a significant impact on the adult industry, though, according to the payment processing providers who serve it.
Visa made the announcement July 18. The decision goes into effect immediately, but Visa is allowing a transition period through the end of October.
The payment gateway company has been embattled since an unauthorized individual infiltrated its network and accessed the credit card data of approximately 40 million consumers in May.
While Visa’s decision is essentially a deathblow for CardSystems Solutions, the effect it has on the adult industry will be largely one of minor inconvenience, if any. CardSystems Solutions is a back-end, third-party processor between merchants, gateways, and Internet payment service providers (IPSPs) and the bank networks, much like First Data Resources (FDR).
“If any third-party processor or someone with their own merchant account was using CardSystems Solutions on the back end, it would affect them. However, most, if not all, banks utilize and offer more then one back end,” says Mitch Farber, president of Netbilling.
Although his company had merchants processing through CardSystems Solutions in the past, Farber says Netbilling hasn’t had any association with the company for several years and Visa’s decision would not affect Netbilling or its customers.
AVNOnline.com contacted each of the other companies processing credit cards for the adult industry and each echoed Farber’s statement. iBill president Gary Spaniak went as far to say he hoped the decision would help bring his company new clients.
Visa’s announcement comes days before the House Committee on Financial Services, Oversight and Investigation Subcommittee convenes hearings on the security of credit card processing. Visa, MasterCard, and CardSystems Solutions have been invited to testify before the committee on July 21.
