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Paypal Under Fire, Heavy Hitters Take Aim
In the past 6 months Paypal has made no less than 4 updates to their policies page and AUP (Acceptable Use Policy). The most significant changes however were at the end of 2007 and a most recent update early Feb. 2008. These changes have many long time Paypal customers up in arms and ready to seek payment processing services elsewhere. The most recent policy update allows Paypal the authority to place a freeze on any account that Paypal determines the vendors products or services to be high risk. The most common vendors affected by this new policy update are the Internet and Affliliate marketers and the Ptc/Ptr (Paid to Click/Paid to Read) advertising website owners. Of course any flavor of MLM (Multi-Level Marketing) has always drawn an unacceptable card with Paypal. It seems now that Paypal has extended their scope of targeting high risk products and vendor services by placing smaller 21 day freezes on their parent corporation eBay customers. This has many long time eBay customers ready to jump ship with eBay as well and seek other auction venues. Paypal has been the only authorized payment processor for eBay for years. In the last quarter of 2007 Paypal's competition saw major spikes in the vendor account signups, Montreal based AlertPay being the biggest competitor to see significant rise in payment processing. AlertPay founder Firoz Patel says, "PayPal and other payment processing companies catered well to mainstream merchants, but fell behind when it came to less serviceable markets." He went on to say, "We saw this particularly with multi-level marketing," he says. "Some clients simply need more time and attention when it comes to payments." However AlertPay isn't the only company to take note of Paypal's recent shortcomings. A new corporate backed payment processor is gearing up to take a huge chunk of the wind out Paypal's sails. Enter "Revolution Money". A very large group of financial heavy hitters headed by former AOL chairman Ted Leonsis have poised themselves to launch a major strike at Paypal's merchant services. This group of financial heavy hitters include some major players with extensive financial experience under their belts. The core Board of Directors is made up of Lawrence Summers, former U.S. Treasury Secretary; Russell Hogg, former President and CEO of MasterCard International, Inc.; Franklin Raines, former CEO of Fannie Mae and former director of the Office of Management and Budget; David Pottruck, former CEO of Charles Schwab and David Golden, CFO of Revolution LLC and former Vice Chairman of JPMorgan. A staggering array of talent to say the least. Revolution Money this past fall announced $50 million of funding has already been acquired from sources like Citi, Morgan Stanley, Deutsche Bank and others. This kind of backing could well propel Revolution Money into the lime light quickly. Revolution Money spokes person, Ted Leonsis, says "The company will charge transaction fees as low as 25% of the industry average and will allow those transfers to be carried out through existing Points of Sale, an anonymous PIN protected credit card and a variety of online methods, including social networking sites and AOL's AIM instant messenger." Their current two offereings include a payment processing gateway for merchants and a money exchange processor, similar to Paypal and AlertPay services, called "Revolution Money Exchange". Late Feb 2008 the company launched it's initial campaign for merchants and vendors by offering a one time $25 bonus deposit for personal referrals from their beta tester account owners. The general public offered affiliate incentive is a $10 bonus referral fee, of which each account is allowed to make up to $600 through this incentive plan. This is reminiscent of Paypal's referral bonuses offered back in 2000 and 2001. So what will be the future for online payment processing? It's anyone guess right now. AlertPay is gaining major steam early in 2008 and Revolution Money is ready to fire the big guns. Paypal stands to be humbled for sure this year even if its just for a short time. Personally I'd like to see Paypal become more customer oriented and not so dictator like in their new policy changes. I do recognize there are obvious infractions to their policies that deserve swift judgement, but there are gray areas that the 800 pound gorilla Paypal uses the adage "guilty until proven innocent" way too often on. One this is for sure payment processing for Internet Marketers will either be feast or famine this year, which it will be more of it's too soon to tell. For more information on AlertPay and Revolution Money visit their respective websites at these links: AlertPay - Revolution Money Exchange Currently both AlertPay and Revolution Money Exchange are offering referral incentives for opening accounts with each ($5 for AlertPay and $10 for Revolution Money Exchange). To get the bonus for AlertPay just click the link. To get the bonus for Revolution Money Exchange you must be invited via an email.
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Contributor's Note
This post is from one of the posts on my main blog website - http://DAElectronics.com
Be sure to visit my main website for more articles and information about online Internet Marketing and consumer elctronics.
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