Visa Puts Clamp on Cross Sales

SAN FRANCISCO — Visa on Tuesday tightened the screws on companies involved in cross sales.

Online companies will no longer be able to allow third parties to charge a customer's card without the card owner re-entering credit card information, Visa said Tuesday.

Visa says that such marketing can result in "high levels of consumer disputes and degrades the efficiency, reliability and security of the payment system." It said that 35 million consumers have paid $1.4 billion for such marketing offers.

Visa's new requirement is designed to send a "clear signal to cardholders that a second purchase is being initiated and protects them from questionable marketing practices," the company said in a statement.

A source close to Visa told XBIZ that the new policy goes into effect May 1. The source said Visa could impose fines against merchant banks that continue to work with sites that flout the new policy. The merchant banks also could face a loss in the ability to accept Visa payments.

Reaction from adult billing companies was tempered by that the fact that most were predicting a clampdown on cross sales.

"The card associations have been putting a squeeze on cross sales and other forms of data sharing for some time between third parties — anything outside of the same merchant account," Mitch Farber, NETbilling's president, told XBIZ. "They are stopping deception sales practices and are working hard to protect consumers and keep their brand names strong to boost consumer confidence."

Sam of Global Exchange Billing told XBIZ that Visa's policy change was "bound to happen."

"It sounds like cross sales will now be limited to the same merchant /company. In other words the internal cross sale game would remain the same," he said.

Sam, however, said that questions remain with Visa's announcement.

"How will this affect the dominant third-party processors, like CCBill and Epoch? Does this apply to U.S. Visa or E.U. region as well?

"It will also be interesting to see when these new regs are clarified how people try to get around them," Sam said. "We'll just have to wait and see exactly what it all means and how it plays out."

Commercegate CEO Bjorn Skarlen told XBIZ that Tuesday's announcement "indicates yet again the concern that the card associations have with the many unclear business models and offers out there."

"MasterCard came out with this rule over a year ago; Visa is now following suit," he said. "I think it is important to clarify that this does not prohibit upsells or repeat sales for merchants that would like to provide this for their customers.

"What Visa is prohibiting is the passing of data from one merchant owner to another, also known as external cross sales. Commercegate has never encouraged this business model and we understand and support the action from Visa to protect its cardholders."

San Francisco-based Visa's decision to ban the practice is in the wake of a probe last year by the U.S. Senate Committee on Commerce, Science and Transportation, which investigated the issue and merchants who use this practice.

"The Senate Commerce Committee's investigation showed that this aggressive marketing practice enabled unscrupulous e-commerce companies to scam millions of American consumers out of more than a billion dollars," said Sen. John D. Rockefeller IV, a panel member of the committee.

MasterCard began levying substantial fines on cross sales as early as 2008.

Visa released a press release Tuesday on the new policy. It is available here.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Adult Industry Educational, Networking Platform 'Imperfectly You' Launches

Imperfectly You, an educational and networking platform for adult industry workers, has officially launched.

Segpay to Launch News Network for High-Risk Merchants

Segpay has announced that it will launch the Segpay News Network (SNN) on April 15.

Age Verification Watch: Patching the Holes

This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Pineapple Support to Host Autism Spectrum Support Group

Pineapple Support is hosting a free online support group for performers and creators who are, or suspect they may be, on the autism spectrum.

ImLive Launches Revamped Member Loyalty Program

Cam platform ImLive has revamped its member loyalty program.

GoFundMe Set Up for Danny Ferretti's Medical Expenses

A GoFundMe campaign has been set up for Fangear founder Danny Ferretti, who requires extensive lung surgery.

Byborg Acquires Cuties AI

Byborg Enterprises has acquired adult artificial intelligence startup Cuties AI.

Irish Government Releases Report on Sex Work Decriminalization Legislation

The Irish government has released a report reviewing a 2017 law that decriminalized sex work across the country.

Texas Bill Would Require Age Verification for Online Sex Toy Sales

A new bill in the Texas state legislature would require online retailers to implement age verification of purchasers before selling “obscene devices” to anyone in that state.

New York Assemblyman Proposes Banning the Term 'Sex Work'

Republican New York Assembly Member Brian Maher has introduced a bill to prohibit the use of the term "sex work" in government documents.

Show More