Alyon Technologies this week made good on a promise it made to the adult industry in November. Just after the New Jersey-based gateway billing processor settled a civil suit brought against it by the Federal Trade Commission, chief executive Stephane Touboul assured adult webmasters that a new, “federally approved” billing mechanism would be available to them by early April.
Today Alyon unveiled ChargeMeLater.com, a third-party billing solution that does not require consumers to use credit cards or online checks to pay for their adult content fixes. Instead, ChargeMeLater.com employs a patented, trademarked system called Express Verifiable Authorization to determine a user’s identity and extend him or her a virtual line of credit. EVA comprises an intricate series of algorithms that match bits and pieces of identifiable personal information–primarily telephone number and the last four digitsof the user’s Social Security number–with data contained in respected consumer databases like those maintained by credit bureaus and telephone companies. Touboul said the system is foolproof for identity and age verification, and was “federally endorsed” by the courts and the federal government when Alyon and the FTC settled.
The FTC brought a civil suit against Alyon, Touboul, and a subcontracting collection agency in May 2003, alleging the companies had unfairly billed and attempted to collect from consumers in violation of several U.S. trade statutes. The case was settled in November 2004 without Alyon admitting any wrongdoing, after the court threatened to sanction the FTC for misconduct in its representation of previous court decisions to consumers. In signing the Stipulated Final Judgment and Agreed Order, the FTC offered tacit agreement that Alyon’s Express Verifiable Authorization stands a good chance of not pinning bills on the innocent and keeping minors away from pay-to-play adult content.
Consumers can sign up for the ChargeMeLater service at any time and be ready to enter membership-based sites that accept ChargeMeLater’s form of payment within two clicks, or they can join on-the-fly by clicking a link on a participating website. ChargeMeLater bills are mailed to users within two to five days of the incurrence of debt, and are due about 20 days later. Touboul says he expects the incidence of chargebacks and consumer fraud to be virtually nonexistent. In addition, because of the Social Security number component, it is highly unlikely that minors will be able to wiggle through any cracks in the system. “This gives our merchants peace of mind and to the consumers the knowledge that their underage children cannot access material which is not designed for them,” Touboul says.
Touboul also said conversion ratios with the new payment system are astounding. “Typically, among the clients we are now working with, nine out of every 10 credit cards are declined,” Touboul says. “With ChargeMeLater, the additional conversion rates are unbelievable. We see an additional 3-to-17 percent convert, depending on the quality of the traffic.”
Moreover, the company and the three mainstream collection agencies with which it has contracted for debt collection feel so strongly that the “paper trail” generated by EVA are ultimately collectible that ChargeMeLater guarantees webmasters will be paid for every sale, even before the money is collected from consumers. “We are so confident about our process that we guarantee payments to our clients regardless of collection,” Touboul says. “Our clients know that once paid, the money is there to stay in their pocket, and that they need not fear chargeback reports to skew their business plans and projections. The ChargeMeLater process is clear to the consumer and extremely easy to integrate for the webmaster. ”
ChargeMeLater was integrated into E-Group’s Nocreditcard.com payment structure several months ago, and E-Group is happy with the performance of the product. “We are endorsing this process because we believe that it is the only available solution today in the U.S., outside of the credit card and ACH, which will allow us to keep on making money for our webmasters for years to come,” says Pascal Pegaz, founder and chief executive officer of E-Group.
According to Touboul, any E-Group-affiliated webmaster or broker with U.S. traffic automatically qualifies for a ChargeMeLater merchant account. In addition, he said his company and payment processor Electracash are working on integrating ChargeMeLater’s system into Electracash’s structure. Webmasters who don’t use either of those processors may sign up for a ChargeMeLater merchant account at http://www.chargemelater.com/merchant.
