Visa and Foreign Webmasters

Listen up all you foreign Webmasters (this means any of you outside of the United States of America); you could be in for rude awakening if you are not completely familiar with Visa’s new policies. If you just fell off the turnip truck and you have no clue of what I am talking about, please read my last article on the Visa situation. For those of you foreign webmasters that are in the loop and are aware of the new regulations that Visa is imposing, do you have a firm grasp on how these will affect you? 

In order to analyze the consequences of the regulations, let’s first look at the position that some of the various third-party processors, or IPSP’s, have taken regarding foreign webmasters. Please remember that these statements reflect the position of the company at the time this article was written and since then, their position may have changed.

CCBill: In a statement released on October 16th, 2002, the CEO of CCBill clarified that to be a Sponsored Merchant with VISA, a webmaster must use a processor that is located in the same region or country. They expect to be able to offer a solution for webmasters in the EU and Asia Pacific regions. They will release more details regarding this on October 28th, when registration for foreign webmasters will begin. CCBill also believes that there is a 50/50 chance that they will be able to process Canadian webmasters and they will release more information regarding this later in the week.

Epoch: According to a statement released by Epoch on October 10th, a Sponsored Merchant must settle their transactions with an IPSP that is located in the same region as their business. Therefore, if you are a U.S. Company, a U.S. IPSP must settle your transactions. Sending a denied transaction from one billing company to another could be dangerous if that transaction ends up being settled outside of your region and your are not registered with Visa to do business there. If you are not a U.S. company and wish to do business with an U.S. IPSP, you must have a presence in the U.S.. Incorporating in the U.S protects you from these problems. Nothing has been released from Epoch as of yet regarding their presence in any foreign countries or regions. 

iBill: iBill retains the same position as Epoch and CCBill, and they have stated that at this time they only have a presence in the United States, but they are working on setting up merchant accounts in other regions. They did however say that this process could take several months to complete.

Update (Oct 18, 2002): iBill has finalized arrangements to create an iBill presence in the EU. At this time Visa is not asking for a fee from iBills EU customers. Customers will still be asked to fill out a form for IBill internal systems but will no longer be required to pay the $750 fee.

Jettis: According to the information provided for Webmasters processing with Jettis, they are still working to address the concerns of foreign webmasters and will announce additional details in the future. As of now, they maintain that the rules indicate that IPSP’s can only register Sponsored Merchants in countries where the IPSP has a presence.

Glo-bill: In a recent statement, the Vice President of Global Operations for Glo-bill indicated that Glo-Bill had moved its processing to an offshore bank. They maintain that they will not be charging set-up, monthly or annual fees and that websites from foreign countries will be welcome without special requirements.

Paypal: The latest information from Paypal reveals that International members can open a US bank account with them but the branch where your account was opened must be located in the United States. 

WebSiteBilling: According to UK based company WebSiteBilling, Sponsored Merchants must be located in the region of the IPSP or face fines for breaking cross border regulations. For instance, a European IPSP cannot do processing for a US based Sponsored Merchant. On the positive side, Sponsored Merchants outside of the United States will not be required to pay the registration fees levied from VISA.

Now that we have taken a look at what the various processing companies or IPSP’s (according to the new VISA lingo), have to say regarding the issues of foreign webmasters, I will now translate the jargon into what this means for webmasters operating outside of the United States. All of the major IPSP’s with the exception of Glo-bill ascertain that according to the new VISA regulations, in order to maintain Sponsored Merchant status with them you must have your transactions processed by an IPSP located in the same country as your business. So, hypothetically speaking, if you are a Webmaster from France, you must use an IPSP that has a presence in France. Sponsored Merchants that are found in violation of these new cross border regulations will be subject to heavy fines as well as subsequent termination of their Sponsored Merchant status. 

While the new regulations are looking fairly rosy, aside from the fees, for webmasters located in the United States, they are looking rather bleak for webmasters located elsewhere. Foreign webmasters of course can switch to an IPSP located in their region, but they will lose all of their rebills with their current IPSP. And for some foreign webmasters, especially those located in Canada, there seems to be a lack of IPSP’s or large processors with a presence in the region due to the strict banking laws. And, what makes it even tougher for webmasters located in Canada and similar countries is that it is also next to impossible to attain merchant account status as well, due to these same banking laws.

For webmasters in the predicament of having no regional IPSP presence or for those who just cannot afford to lose their rebills, there seems to be only one viable option and that is to become a registered corporation in the United States. The new VISA regulations are still fairly sketchy regarding the issue, but it looks like you also have to have a US bank account, a US tax ID number and perhaps even a staff, although no clarification has been made yet on this issue. There are many companies that can help you set up a US corporation fairly quickly and for a reasonable price. If you contact your IPSP regarding this issue, they should be able to put you in contact with a company that can assist you in your US incorporation efforts.

Reader Comments: (1 posts)

Starly says:
I atcaully found this more entertaining than James Joyce.
April 14th, 2013
at 9:45pm EST
Rating StarRating Star


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