A Payment processor just killed all their IBA accounts

[Bubba Scruggs]

I just received an email from Paysystems.com stating that as of TODAY all Internet Billing Accounts (IBA) are TERMINATED and they are no longer processing transactions.

There was talk on this forum recently about Paysystems migrating these accounts to merchant ones, but as a Canadian that offer had not yet been made to me (nor had I heard anything previously about the whole situation with the exception of this board), and according to their email this applies to quite a few people as their migration process was cut short by whatever actions their parent processor, Pago eTransaction Services GmbH/Deutsche Bank, has taken on them to prevent 3rd party processing of Visa/MC.

In addition, all funds held by them will be held pending "risk review" of each account and no release schedule has been announced. They also state that all questions regarding this have to be made IN WRITING to their legal department. They even suggest to go to any search engine and search for "process credit cards online" to find an alternative, so they're obviously unable to continue business with those affected in any way.

As can be expected, this has left me scrambling to find another credit card processor for my business. Is anyone else here in this boat?

[moneymancn]

We have been with paysystems for 2 years + now.
We had an IBA account and were given nearly 2 months notice of the changes and found them to be very co-operative during the change up to TP Pro
They normally hold funds for 6 months(the risk period for a chargeback)In our case that only amounts to the rolling reserve which was at 5%

They may have used this as an opportunity to "clean house" and perhaps you are in a higher risk business than they would like.Who knows?

MM

[plumsauce]

No, this is the real deal.

There are 300+ post threads on other boards.

[Bubba Scruggs]

plum, could you direct me to another thread about this?

I was (am) a moderately small business (~$3k a month) with zero chargebacks in the 8 months I'd been with them. I'm not sure what criteria they used to select which accounts could "graduate" to their other plans, but I was never contacted nor informed of any problems at all. All I knew was what I read on here. I am in Canada, and even though they were based in Canada themselves, Canadians seemed to be offered less service (no direct deposits, for example).

Finding another processor is a challenge as I am a) Canadian, and b) need processing in both CAN and US $ and c) rates comperable to paysystems. If anyone has any suggestions for me, please PM me (or post if it's not against the TOS here).

[vibgyor79]

Yeah - got that mail from PaySystems.

What do they mean by "restrictions imposed by the VISA/MasterCard association on processing of Internet credit card transactions by third party billing companies"?

How is 2Checkout/others getting around these restrictions?

[Bubba Scruggs]

Your guess is as good as mine as to what it all means.

They've shut me out of seeing my statement reports, but there's a back-door way of seeing them by viewing your holdback fund and then clicking on the statement date link there. I've printed out hard copies of all monies owed to me just in case, both from transactions and hold back. I'm currently out $2400, not huge money, but I'm a small business and do this exclusively and that will be a tough pill to swallow if I lose it.

There's a thread about a class action lawsuit on another board since a lot of people are owed a lot more than what I am.

I've heard so many bad stories about 2CO, I can't see myself using them, even in a pinch like this. Right now I'm on Paypal exclusively, but Paypal still makes Canadian business' customers sign up for accounts before using their credit cards, so it's not the best solution and will certainly cost me sales.

This sucks!

[Shak]

did we not have a paysytems rep round here, maybe they can give feedback on the matter.

at present we dont use paysystems at our company.

shak

[Jesse_Smith]

Support says if you were not fully migrated to the new system, you've been dumped. Charges, holdbacks, and wires under the OLD system ARE effected. Accounts and charges under the NEW system are not affected.

So if you got dumped, you'll probably have to re-sign-up if you want to use them again.

They got all my documents, three or four times, but never fully migrated me over so they dumped me. Luckly I had just $65.70 that I havn't got paid, plus back holdings. For now I'm using PayPal since you don't have to have an account to place an order.

It's chaos just to get in to there live chat! When I finally got in they said I was migrated! Yet today I get

Processing Status: closed

when I log in.

There's a message board that's generated over 500 posts on this in just the last day, including a hopeful Class Action Lawsuit. If you want the URL, sticky me.

[Bubba Scruggs]

What's sickening to me about this is that even if everything Paysystems has said is true, the Public Relations part of this has been handled amazingly poorly. They've removed contact phone #s from their site to avoid getting impounded with concerned calls. The bios to their upper management have been removed as well so we don't have names. The server handling customer statements was taken offline. And apparently thousands of businesses have had a wrench thrown into their incomes while their sites are unable to process orders, even if Paysystems pays all that is owed previously.

I'm keeping my fingers crossed that they will pay out what is owed, since there's not much I can do about it, and it's still too premature to be throwing around the class action card. Some companies are offering waived sign up fees to Paysystems clients (like internetsecure for Canadians), so I wish everyone the best getting through the hump.

[lgn1]

Bubba, they are required to give you 30 days notice, unless their is fraudlent behaviour.

Since you have less than 3 chargebacks in 9 months, I would go with CIBC which uses Global Payment Systems.

If you join the Canadian Federation of Independent Business (about $300) bucks a year, they will give you
the CFIB rate of 2.25 percent and they don't differentiate between Retail and Ecomm. Your Visa, Mastercard and Amex will be deposited to your account overnight if you close your credit card machine before midnight.

The only problem with CIBC is that their regular business banking is based on a archaic batch
system, and if you miss the 3:00 PM cutoff for deposits and you have cheques written, your cheques will bounce even if you have the money in the account (posted for the next day), so its best to have overdraft protection.

[Corey Bryant]

If you read 2Co's webiste - it is all in the wording. But I predicted on Saturday that there were going to be a lot of changes.

I just did not think they would happen so fast. We have been pretty busy trying to help people & push them into the correct account depending on their location.

I also read that ikobo might be gone as well. Their website is not accessible - it might just be a problem or a coincidence. Who knows? But that was one company that I always suggested to stay away from.

-Corey

[blaze]

If you want to contact paysystems, you could try their whois registry. There's a phone number there.

[blaze]

I bet the merchant account for mypaysystems hasn't charged anyone's credit card for funds that paysystems hasn't
released yet.

So what happens is that buyers get product for free, no chargebacks, and the end merchant gets royally screwed.

Yaaa-ikes.

[hotcolin]

I am a UK paysystems merchant who has been screwed by these people for GBP 25,000 . I turned over GBP 15k on a good week, and they have shafted me. They are sitting on all my money, after I have supplied the goods.

Any movement I can join to go against them?

[edited by: DaveAtIFG at 7:39 pm (utc) on Aug. 12, 2004]

[Dan_Vendel]

A client of mine got screwed for severe money 9-10 months by their complete indifference and incompetence. He's running a small business and no time to find a new processor, so he stayed with them, and now got this.

As far as I could see, they don't say anything about this suspected bankruptcy at their website.

If you like to know who the guys behind this are (could be useful for future references), go here:
[web.archive.org...]

snipped

Where are digging reporters when you want them.....

D

[edited by: DaveAtIFG at 8:49 pm (utc) on Aug. 13, 2004]
[edit reason] Off topic [/edit]

[RubySlipperz]

Hi- I've been reading through the threads - as someone in the merchant service industry over 13 yrs- I can tell you International eCommerce is more complicated than US cc acceptance. There are V/MC cross border regulations in effect- which in recent mos has caused many companies- causing first gateways- like authorize.net- then linkpoint to "purge accounts' of high risk and now 'mypaysystems' has defaulted - or basically will file bankruptcy- and that may be why many merchants are not getting paid- because the banks - when a provider defaults- holds its funds- for min.6mos - maybe a year- against potential chargebacks of its business - this is so the bank does not go under. So all of the merchants here that are complaining about their funds not being settled - that is why- they are being held against potential chargebacks. snipped Wishing eveyone well - Ruby

[edited by: DaveAtIFG at 9:45 pm (utc) on Aug. 13, 2004]
[edit reason] Off topic [/edit]

[lgn1]

So if the banks hold the money, and the payment processor goes bankrupt, then I assume the money, is held in trust for the merchants, and not as part of the payment processor's assets to be liquidated. Sounds like a real can of worms to me.

[Essex_boy]

'So if the banks hold the money, and the payment processor goes bankrupt, then I assume the money, is held in trust for the merchants, and not as part of the payment processor's assets to be liquidated'

I think in the long run this would be teh best possible outcome, at least youd all get paid at some point.

My main concern is how many firms in the ecomm arena are they going to bankrupt in the mean time? Hotcolin - Im truly sorry to of your losses.

Thats a massive sum to swallow. are you going to make it through?

[andy_boyd]

Yep, confirmed Essex_boy

Just check and my account has been closed. No more orders coming through. This is bad, very very bad.

[saffroncomms]

we also have suffered as a result of this debacle. we have written to paysystems in canada ( we are based in UK) and have not yet replied. May pass this to a no win no fee debt collection agency. does anyone have the thread to more postings on this elsewhere?

thanks

[hotcolin]

Hi Everyone

I am now asking ALL of my clients to ask for a chargeback on the grounds that I will not be supplying against that payment, all of the card issuers seem to know about Paysytems, and the credit card issuers are starting to oblige. The clients are then sending me the money by seperate means, ie bank transfer or my new Barclays epdq account, got to wait 60 days, but at least I will get the money!

Good luck everyone, give this a try.

Best regards
Colin