This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk where each week we interview one of the movers and shakers of the adult industry and we give you a tip on buying and selling websites. This week we’ll be speaking with Rob Bast of Corpay. We’ve added an event section on our website. There you can find out about all the B2B events in our industry and there are discounts on selected shows. Go to adultsidebroker.com to find out more. Speaking of events, I’ll be at the X-Biz LA show January 13th through the 16th and I’m looking forward to seeing everyone there and talking some business. Contact me on our website to book a meeting at adultsidebroker.com. To register for the show, go to xbizla.com and I’m proud to announce I’ve been nominated for Community Figure of the Year at the X-Biz Executive Awards as part of X-Biz Honors January 15th. It should be an exciting night and I hope to see you there. Now time for our property of the week that’s for sale at Adult Site Broker. We’re proud to offer the largest escort site in South Africa. It’s the largest in terms of traffic and listings. The site is 14 years old and has grown in revenue every year. They’re more than 50% larger than their closest competitor with over a half million visits monthly. It’s a very stable business with consistent clientele and is the largest adult brand in South Africa. It has a full management system, an operations team and a call center. The site requires almost no owner management. The owner hasn’t been personally involved in the business for seven years. They have a very competent team that manages the company daily. The business generates a very high profit margin of over 70%. They have about 4,500 escort listings a month. All the traffic is either direct or organic. The products have been well priced, a bit on the conservative side, so there are opportunities for price increases boosting revenue without affecting the business. The escorts have nowhere else to go. There’s also a great opportunity to build a fan section on the site as well as expand the classified section to generate additional revenue. It’s an amazing business to invest in requiring very little owner input due to the established business model and procedures. Only $3.75 million. Now time for this week’s interview. My guest today on Adult Site Broker Talk is Rob Bast of Corpay. Rob, thanks for being with us on Adult Site Broker Talk. Hey Bruce, thanks for the invite. Looking forward to it. Hey, it’s nice to finally have you. Rob has an MBA, an executive MBA and was a Welsh scholar. He’s won numerous awards. Rob has solidified his expertise in navigating the high-risk payment landscape with tours of duty at some major payment platforms. He’s brought growth to all of the companies he’s worked at. Rob has been in the merchant services industry for close to 20 years. He got into the industry because his mentor, the late Jack Welsh, recommended that he work for a Fortune 100 company to get the experience. Before joining American Express, he had run startup companies on the East and West Coasts. After American Express, Gary Jackson at CC Bill recruited him to run their sales team. This was his first exposure to adult and he’s never been the same since. After almost five years running CC Bill, he was recruited by Humboldt Merchant Services to be vice president of sales. After nearly five years there, he joined Corpay as chief sales officer. At Corpay, their team specializes in providing comprehensive payment service solutions, catering to a wide range of risk profiles across the US, the UK and the EU. His role as chief sales officer hinges on pioneering merchant services and leveraging their proprietary payment gateway, NetValve, to ensure secure and efficient online transactions. His focus is on optimizing recurring payments and fostering robust financial ecosystems. For almost a decade, Corpay has specialized as a full service payment service provider in the high-risk payment processing space. Providing e-commerce merchants, credit card processing and alternative payment solutions tailored to their businesses needs. How do you like your commercial, Rob? Man, I’m going to have to hire you. Do you do LinkedIn also? There you go. I do parties. I do parties. I do everything. Fantastic. Rob, besides what I mentioned, tell me a bit about your background. Obviously, I didn’t just get into the payment space right away as you indicated. I grew up a Navy brat, graduated a college with the aspirations to play professional hockey. That didn’t happen. I played minor league hockey and kept the dream going for a while, about 10 years as a goalie. But it was time to kind of be a big boy and grow up. That’s when I went ahead and started with some startup companies on the East Coast. Then I had the opportunity to come out to Arizona and work with some startup companies in the San Francisco Bay area. I went ahead and did that in the tech area. Like you said, Jack Welsh was a mentor of mine. He asked me, "Rob, you’ve never done a Fortune 500 or even a 100. Because I do it." With his Graspy Boston/New York accent, he said, "Do it and get the hell out." I went ahead and joined American Express and kind of ran their Canadian and Op Blue program for about two years. As you indicated, Gary Jackson recruited me and brought me over to the dark side. I’ve loved it ever since. It’s been incredible. Yeah, yeah. We’re a nice group once you get to know us. Yeah, absolutely. Absolutely. Very embraced and welcomed by far. Indeed. Indeed. We’ll talk about that later. You’ve been both in mainstream payments and high risk. Which do you like better and why? Great question, Bruce. I know I asked it. I probably have worked for the most conservative company in the world, American Express. Their computers were so locked down that if a merchant gave you a website to look at and it was like a gentleman’s club, your computer wouldn’t work. Obviously, it was a great opportunity to understand credit cards, merchant services, assist the growth of merchants. But I have to say, there’s nothing like working in the high risk verticals. Both CCBill and ECSuite, they’re really focused on 5967 or what we call adult and also 7273, what we call dating. That’s really the bread and butter that they focused on. That gave me a great opportunity to just really focus on the two big opportunities. When I went over to a Humboldt Merchant Services, they have a little bit more of a high risk vertical that they were good at. Obviously adult dating, but they also did other things like CBD, Nutra and gadgets. It gave me, again, another opportunity to learn a little bit more high risk outside of adult dating. Another fun fact that I had was CCBill was a global, but it was like a pay fax. We may or may not go into that later on, where Humboldt Merchant Services was just a merchant account. In Corp. Pay, I get the best of everything because they work in the low, the mid, and the high risk globally. I get everything that I want with Corp. To answer your question, that’s what I like. The variety that Corp. Pay offers, we in essence can assist really any legal merchant. Obviously, we’re experts in both adult and dating, but we’re also very solid with all the other verticals globally. It really keeps you fresh on your toes. It sounds like CCBill, Humboldt, and now Corp. Pay really became an extension of your education and payments. I think so. I think that’s a great way to put it. I had some incredible people to learn from at CCBill. Gary Jackson, as we all know and love, he was an OG. He really taught me a couple of things. One, not to just look at a merchant and a website and stuff like that, but really how to engage and interact with our industry. Once you knew Gary and once you were trusted, then they embraced you. That was fantastic. Humboldt Merchant Services, Adam McDonald, was more or less like an OG also. That gave me a great opportunity to reemphasize what I did at CCBill and now with Humboldt. Then Jonathan Corp. He’s been in the industry close to 20 years and has been incredible. It’s been fantastic. That’s great. When you first started dealing with people in the adult industry, what was your take on us as a group and how did you look at us before? Give me the comparison. I know you. You’re a pretty conservative family man. I look at someone like you and my first thought is they would come in with some preconceptions. I remember during my interview with Gary Jackson and Gary was just hammering me and hammering. Maybe he thought the same thing. He’s like, "Can you tolerate? Can you handle this? This is different than American Express." I came in with basically just open, embracing the challenge and seeing what would happen. Like I said, what really was a 180 for me or whichever way you want to say it was how the industry embraced me. Everyone in our industry is so ready to just reach out. I’m the name drop like Brad Mitchell. Brad would just, first time at a conference, I don’t know anyone. I see this guy in a funky looking shirt and he comes up and says, "Hey, I’m Brad. How are you?" He’s a great guy to know and network and introduce you to people, but the industry is incredible. The ironic thing is the mainstream is really opposite of that. You go to conferences and everyone’s snooty and won’t take the time to talk with you. This is why I really love this industry. People come into this industry and even if they leave, they come back because it gets in your blood. I always like to say it’s a family. Once you join the family, you’re in the family. Absolutely, absolutely. 100%. It’s funny you say that because we all experienced COVID and that was the weirdest situation because we travel a lot as you know with the different conferences and not to have travel for what was it, 18 months or so, that was weird. Yes, we had the ability to do the Zoom conferences and catch up with people, but there’s nothing like seeing the people in person and just catching up because like you said, it’s like seeing your cousins and uncles that you haven’t seen in a while. It’s really truly a family. I had the same experience, man. I really felt a sense of loss that I couldn’t see people in going to the shows. It was just like so strange. And then when we had the first show, it was like, wow, this is great. Of course I caught COVID at the first show, but you know, there you go. Of course she did Bruce. Yeah, yeah. That was the only time I had COVID. But also you know what I would say is our industry, regardless if you’re a tech person, a cam model, a first time website, developer, one of the OGs, we’re professional. Everyone is a professional. I know people outside the industry think we’re probably running around naked and doing anything and everything. No, we’re really, we are true professionals. I think it’s a great group to work with. Like I said, I can’t emphasize enough. Love being around them. So happy to help their businesses grow globally. And again, I think the stereotypes outside of the world are really unfairly labeled. In the bottom line, people in adult space are no different from any other business person, entrepreneur, tech person, or salesperson. They just do something that some people may consider is okay and some people look out and frown, but they’re business people bottom line. Oh yeah. And I wouldn’t say we’re all professionals. There are some who aren’t too professional, but no, we all are working. So in that sense, we’re all professionals. And I’ve worked in mainstream. I was in radio for 25 years. And the people in this industry are much nicer than the people in radio, just like you talked about, used to go to these meetings and conferences, like at the end of the year, Christmas time, they’d have a big party. And people were kind of standoffish, you know, for the most part. And in an adult, it’s hugs and kisses. So that’s how I got COVID. So anyway, what is Corpay? And how is it different from its competitors? Well, I mean, Corpay was founded a little over seven years ago as a full service, a free-spoke payment processing solution. You know, originally it was tailored for hard to board, card present, and also card not present merchants. The cool thing with Corpay is our management team brings over 50 years of experience in the payment industry. Most of that is in the high risk verticals. So we know, again, adult and dating. The nice thing about Corpay, again, is we have a deep understanding of, you know, the industry trends. We’re committed on staying informed about, you know, potential new challenges and regulations that, you know, elevated risk, things that really can impact the bottom line merchant. We consider ourselves almost like a boutique shop. We pride ourselves being accessible so people actually get our cell number and, you know, can text us and call us first, you know, some of the other shops out there that it’s going to go to a voice box and or, you know, it might go to an AI tool that, you know, good luck. Yeah, exactly. You know, we really do take pride in ensuring we provide the service that, you know, our merchants really deserve. We also provide in-house underwriting. We effectively manage risk. We try to proactively prevent fraud. And we try to ensure transaction security because that’s, you know, what everyone wants. And another cool factor about us that’s really a little bit different than our competitors, in late 2023, we launched our full-stack gateway. You kind of hit that at the very beginning, a net valve. And this establishes Corpay as a unique value add-on service in a very competitive market. And like I said, there’s not many merchant services providers or ISOs that actually own their own technology. Some of them will say they own them, but it’s really just white-labeled. And the cool thing too is, since it’s fairly fresh, we have a lot of new technology that other ones don’t because, you know, maybe they built it 25 years ago and it’s like, why the hell change it? It’s working fine. Another cool factor is we’re a global company. I mean, our team’s high-risk payment processing experience, it expands over three offices. In the United States, we’re based in Florida, though we do have people all across the United States. We’re based also in London and also Dubai. So that’s kind of cool. They’re pretty adult-friendly there. Then one of the things that, you know, Jonathan Cole really believes is staying on a forefront of evolving the payment technology. You know, he’s great on that. Then also, Corpay, we serve companies across the United States, EU, UK, and Canada. And ultimately, you know, we try to be like a one-stop shop for payment solutions. And also, I forgot to say, in addition to our gateway NetBow, we also offer our Charge Back Management tool, CB Alert. So again, we really can help you out with anything and everything on a one-stop shop. So they don’t have to go to an external Charge Back service? No, we should be able to help them out. And the cool thing is, as you know, I love our competitors in our space, especially the ones that work in the 5967. We’re friendly competitors. You know, and I always say that you’ve heard me speak on expiz and different panels and stuff like that. We’re always trying to help. So hypothetically, if shop number one can’t help you, maybe shop number two can. And the cool thing about that is, these guys are going to say, "Hey, call Rob." Or maybe I’ll say, "Hey, call someone such." And maybe they can help you. Or better yet, as you know, sometimes you need the redundancy. So maybe you are working with brand, maybe you are working with the CC Bill or a Humboldt Merchant Services. But you need that redundancy because the last thing you want to do is get that email or call saying, "We’re shutting you down and you’re going the old shit moment. Now if you have redundancy, it’s really going to help you out." So, but yeah, that’s kind of, I mean, in a nutshell, that’s what Corpay is. And I think that’s what’s really the differences between us and everyone else out in the space that can do, you know, low, medium and high risk. That’s great. I always tell people have redundancy because if you lose your payments, you’re out of business. And I’ll tell you a story. I had a client who owned a cam site. And because of this gal that lied and said that he had a C-scamp on his site, he got banned by his processor. His processor kicked him out. And I had to list this site without processing, which wasn’t easy. But he got processing back somewhere in the process, but obviously he was harmed greatly and it affected the price. But God, don’t get in that situation. And I’ve known many other people, you know, in my position as a broker, I hear everything and I have a lot of people come to me and they show me financials and I go, "Well, what happened in August? Oh, we lost our processing. It happens all the time." And then the other thing is another little piece of advice, which I’m sure you’ll agree with, make sure you’re using an adult friendly processor. Is it going to cost more money? Yes, the discount rate is going to be higher, but it’s well worth it. Don’t try to get by with a mainstream solution because guess what? It’s only a matter of when, not a matter of if they’re going to ban you. And when they ban you, you’re out of business. 100% and you know, you hit it right on. And I don’t know how many times in my career that the phone will ring or the email and the sales teams will say, "Hey, we got someone from Stripe that just got shut down." Or you know, "Stripe’s the classic one." Yeah, yeah. Right. Well, because a lot of times, and this is where for all the listeners, if you are a web designer or a tech person or if you are currently processing or getting ready to, don’t go to Stripe to save a couple basis points because sooner or later they will shut you down because Stripe is not adult friendly. And then you get the people that, you know, "Hey, I’m up and running for a month, they’re two months." And then Stripe will do their audit. They will do their quarterly audits and you’ll get kicked out. And then the problem is, you know, let’s say that you built up your business and you’re killing it. These customers will not wait for you. They’re going to go somewhere else that’s, you know, providing, you know, processing the right way. Or the bastard is, maybe you get put on match because you lied and now you’re out of business and you will never be able to process again. You’re done. Tell people what match is because some people wouldn’t know. I do, but yeah. Match is the naughty list that you get put on for Visa and MasterCard. And if you’re put on that, it basically not only copies your legal name and your social security or, you know, your findings, but it also will do your EIN number and you can never get back into business unless you fight it. And that is a tough fight. And then, you know, it’s, you’re dead. It’s a death sentence just because you thought you were smarter. And guess what? That’s why risk and compliance, you know, uses all the bells and whistles and tools. They’re always one step ahead. Yes. And some people you’re using Patreon now, that’s, that’s pretty common with the AI sites. And they actually have a no adult policy. So I’ve seen some people lose their processing on Patreon too. So you know, I’ve got a consulting company too and I talk to people and I say, don’t use those mainstream processors. You will get kicked off. It’s going to happen. So no, 100%. And the only other thing I’ll say to the listeners is, you know, whoever you choose, I mean, yeah, obviously selfishly, I’d love for you guys to call a portee and blow up, you know, our emails and hotlines and everything. But whoever you choose, tell the truth, tell them what exactly you do and don’t think, well, I’m just going to go ahead and make the website compliant today. And then as soon as risk gives me the AOK, I’m going to change everything. Again, you will get caught because we, you know, have to monitor your websites and we use all these different tools and we’re going to catch it. And once we get it caught, it’s going to be like you’re out of business. Yeah, you have to because your business is at risk. Oh, yes. I mean, the last thing we want to do is not, you know, have Visa and MasterCard say you no longer can process, then, you know, we’re now in the death penalty. So we definitely don’t want to do that. Exactly. Corp is obviously adult friendly. Are there other verticals you specialize in? You alluded to some. And which ones do you avoid? Great question again. And this is great for the time. I mean, 2024 is, I’m going to go ahead and start there. Which ones do we try to avoid? Dora and gadgets. The reason being is there’s so much fraud that you find in those. Okay. Don’t get me wrong. There are some good ones out there. And if they’re clean, great. Okay. But there’s a lot of ones out there that basically do it as fast as they can and then shut the sites down. And it’s a nightmare. Give me an idea of what, what do you mean by gadgets? You remember the radar detectors? Yeah. Yeah. And gadgets. They’ll sell the electronic gadgets for $59.99 and some other stuff that you and I wouldn’t spend $10 on. But you know, they’re using that. And then what you do find out is a lot of these then will go ahead and be reverted over to like sweepstakes and illegal gambling and other aspects. So it just goes down a rabbit’s hole that, you know, a lot of the card brands don’t like and we stay out of it. I mean, I know in 2024 and 2023, the nutrient gadgets have been getting hammered left and right. And you know, if you go to like these affiliate shows, you’re basically seeing rats on the ship. They’re trying to find somewhere to go because they’ve done it for 20 years. They made a lot of money and it’s just harder and harder to go ahead and do that. So with that said, we more or less stay away from that, but you know, you know, a fantastic new job, big, you know, blue box, you know, the blue pill and it’s actually that. Yeah, we would definitely consider a name brand. But for these carbon copies, no, I’m not too excited about that. I get it. It’s okay. No dick pills. Okay. There you go. Adult and dating, obviously, as you hit on is something that we, you know, are really good with. The bottom line, Bruce, if it’s a business that is basically a legal business and supported by Visa MasterCard at Corpay, we can do it. So if you’re a pizza shop, we can help you out. If you’re a gentleman’s club, we can help you out. If you’re an e-commerce that might sell, let’s say, encyclopedias, you know, something very mainstream, yeah, we can definitely do that for you up to, you know, telehealth, telemedicine, CBD, firearms, you know. Something that’s really, you need the experience because of the high risk. We can definitely help that out. And you know, with that said, we tend to be very, you know, I should say more selective than some other shops out there because we do really believe in building, this is a keyword, long-term relationships. I don’t want, and you may have heard this terminology, then MIDS, you know, they basically come and go. Three months, they burn them. And you know, we’re not looking for these quick wins that are basically going to get on Visa and MasterCards radar. And you know, we want to go ahead and build partnerships and, you know, help merchants on the long journey ahead. That’s our biggest goal. Big time. Does Corpay only accept adult merchants of a certain size or in particular niches? No. I mean, you know, obviously in regards to operating legal adult-oriented businesses, so obviously they’re going to have to be Visa and MasterCard compliant. And our risk team is going to look at that and make sure, you know, the usual suspects, you know, no rape, no force, no blood, that type of deal. Yeah. You know, none of this stuff that, you know, some people say, "No, I can do that." No, you’re a freaking idiot. No kids, no animals. Yeah. Yeah. Exactly. You know, adult AI models are obviously a huge trend. I spoke at that at XPiz in January. But to be brutally honest, and my opinion has not changed since I spoke in January earlier, very few are truly compliant. And that’s the real challenge. I mean, in theory, Visa and MasterCard for the adult AI, they have to be like closed loop. And unfortunately, these merchants are, you know, are being, and will be more scrutinized in common months because it’s something that the card brands don’t quite understand today. And let’s face it, the last thing you want to do is do an AI, have something fake, have a celebrity’s, you know, face on something. And then could you see the lawsuit that could come out of that? I mean, it could destroy, you know, our industry. But again, I mean, Corpay provides direct, you know, direct merchant accounts. But again, in our experience, we don’t have the size, but we’re going to ask the questions, you know, the questions are going to be like, you know, what do you have? And, you know, how long have you been in business? Let’s say it’s brand new. Okay, great. What do you have in place to kind of protect yourself, you know, customer service and stuff like that? And if they get to the point, they’re like, well, that’s a great question. I never thought about it. We’re willing to then go ahead and say, you know what, I don’t think you’re ready for a direct merchant account because the direct merchant account, you’re responsible for everything. You have the alphabet soup. What I would then do is reach out to one of our pay fax partners and say, hey, can you help these guys out? And what I would like to do is, you know, maybe bring them to brand A over here, brand B. Or maybe CC Bill or Epic or somebody like that. Right. I mean, I have a great relationship with all those people and I would say, yes, you know, 100%, reach out to these guys. They can help you out. And then once you understand, then maybe what we can do is migrate them over from a pay fax because let’s face it, when they’re out of pay fax, they’re going to be paying premium rates. We know that. By pay fax, you mean third party, right? A third party, exactly. So let’s say. I never heard that term. Yeah. So hypothetically, let’s say, you know, we’re able to get someone, you know, at a lower rate, you know, let’s just say 5%, you know, just for shits and giggles. Okay. A pay fax, you’re going to probably pay 10 to 12%. So it is or more. I mean, back when I was there, it was 15. So you know, it’s, it’s definitely going to be more that. So you know, what we would do is say, hey, invest your time there. Make sure this isn’t a hobby, but this is going to be, you know, a long term play for you. So once you understand, you know, let’s talk again, it will be more than happy to reduce your rates, get you a mid because I think that’s going to help them out. And you know, again, you know, having, you know, we have strategic partners with several pay fax, then, you know, leverage their technology and support. And that way it’s going to be a better experience. Right. And just again, to translate, I know what a mid is, it’s a direct merchant account. So for those who are fairly new in the industry, you need to know that you’ve got third party like CC Bill and Epic and you’ve got direct merchant accounts like Rob’s company, Humboldt and others. By the way, how important with the AI is moderation? I would imagine pretty important. Oh, incredible, incredible. I mean, it’s, it’s nonstop in regards to that. And it’s something so new that the banks really don’t understand it. In between us, I wouldn’t be surprised if you see a halt in some regards to AI for the adult aspects until they have a better understanding. But I mean, that’s just my opinion. I hope not. A lot of people would be hurt by that. Absolutely. But you know, let’s, you know, let’s face it, you know, Visa, Mastercard or King of the Hill. So if they decide that it’s, you know, in the banks don’t feel comfortable, you know, ultimately it’s the banks deciding on the risk. And Visa, Mastercard, putting that the, you know, the regulations in and, you know, people that know me are probably going to laugh. It’s going to, you know, really should be, I guess I would say a crawl phase, you know, crawl, walk, run. This is a crawl phase. And anyone that wants to start running on that, it’s going to be suicide. And, you know, the AI, in my opinion. Yeah. Well, if Mastercard and Visa isn’t a solution anymore, then they’re probably going to have to use crypto, which some already have. So it is what it is. What payment methods does Corp. Accept and does Corp. Offer payout solutions? I mean, in general, we offer all the major credit cards, Visa, Mastercard, American Express, Discover. Obviously, you know, American Express doesn’t do anything in the five, nine, six, seven. Plus we also do APMs. And for your listeners, that’s alternative payment methods, such as like, you know, the buy now pay later aspects. And you know, that’s, you know, kind of what we do. How about crypto? Crypto right now, we do not have a solution with as of today. We do also offer Google, Apple Pay and Samsung Pay for the verticals that that is allowed. But again, you know, like I said, five, nine, six, seven or adult American Express, Google, Apple Pay, Samsung Pay. That’s against the acceptable list or use of their policies of the provider. So they’re not supported on the adult. But you know, let’s say that you have a novelty shop, then you know, that’s stuff that we could definitely do. And then in regards to payout solutions, you know, Corp. We have direct integrated partners that we can assist with this solution. So people that are very close to us that we can go ahead and make the introduction and they’re integrated with our systems. And that can help in regards to the payout solutions. Okay. Which platforms, CRM’s and gateways does Corp. pay integrate with? Okay. In regards to CRM’s gateways, we’re agnostic. So that’s great. That’s what, you know, one of the things that you do want to hear with that said, as you know, I’ve said a few times during the podcast, if our clients have a gateway of choice, we’re happy to integrate it. But if not, we’re more than happy to go ahead and get them set up with our own, you know, gateway net valve. The cool thing is our gateway net valve, it integrates with all the acquiring partners, processors, and includes a host of payment functionalities. So that’s fantastic. You know, an advantage, you know, to bundle with Corp. pay and net valve, it’s our ecosystem. You know, we’ll have you cover type of deal. In other words, you know, plug it into this one and, you know, doing for that one, it’s one thing. So it’s a little bit easier for stream on efficiency. Awesome. What’s going on? And you just made me aware of this with the visa and the VIP or the visa integrity risk program. Maybe you can give us a summary because it sounds pretty important. It is, it is. You know, for the listeners, the visa integrity risk program, you’ll also hear as a BERT, you know, visas uses this to kind of detect and kind of really prevent illegal activity from entering the visa payment system. And you know, BERT kind of categorizes high risk merchants based on a, I guess, like a criteria like transaction patterns, chargeback rates, the type of business that you use. High risk merchants, you know, also must comply with BERT to avoid increased fees that the bank will go and pass through. And unfortunately, potential account termination. I mean, in summary, these changes really intensify the scrutiny on the bad actors. And that’s not a bad thing. You know, we don’t, we really don’t want the bad actors playing on our space. Well, it hurts everybody. Absolutely. I mean, let’s face it in the high risk space, you know, it’s a challenge as it is. So, you know, this is really going to really push the bad actors out. Also BERT has significantly tightened regulations in both the United States and also in Europe. And with that, all, you know, if you’re in the adult or, you know, some of the higher risk industries, the high risk registration fees increased the beginning of this year from 500 to $950. Ouch. Yeah. But, you know, that money doesn’t go to us. That goes directly to Visa. You know, that’s part of playing in their game. I mean, you know, what was it? Mel Brooks, it’s good to be the king. I love that. For MasterCard and Visa, it’s good to be the king. So, you know, these are fees that, you know, you need to pay. So hypothetically, if you’re a brand new company that’s getting into the adult space, you have to be registered high risk and you have to pay that fee of $950 towards Visa. Okay. Let’s talk about VAMP or the Visa Acquiring Monitoring Program. Those are long ones. Again, give us some details on why that’s important for adult merchants. Okay. So, this is something new. It hasn’t gone in effect in the United States yet. This actually goes in effects. I believe it rolls out of all days, April 1st, 2025. Goody. April Fool’s Day. Love it. Yeah. Exactly, exactly. So, VAMP has multiple thresholds that merchants and acquires must meet to avoid being enrolled into this program. You know, VAMP is going to be designed to monitor acquirers and also the agents who exceed acceptable disputes and fraud thresholds. Non-compliance in this is not good. I mean, it can result in penalties, fees, and then obviously even closures of merchant accounts. Essentially, for mitigating the risk that’s associated with high chargeback ratios, assuring that the payment system remains secure and efficient, it’s also, in a nutshell, it’s going to be eliminating the chargeback monitoring programs a lot because they’re really going to be focusing and this is going to be replacing more like a more robust customer focused on fraud. I mean, let’s face it. I mean, fraud can range from fake businesses, selling counterfeit goods, stolen credit cards, account takeovers. So, the bottom line is, I mean, merchants really need to ask the questions to their agents or their banks. What type of businesses do you accept? And this kind of goes back, Bruce, when you ask me, which ones do I kind of avoid? We avoid the, you know, the nutrients and gadgets because that’s going to be part of the playing field. It’s no longer just your business. It’s going to be the entire of everything. So if you’re at a bank or working with an agent that does all this shady stuff or questionable, you know, verticals, this really could impact a clean, healthy merchant that might just have a point side or adult side up. So, you know, ask the questions and, you know, it’s going to be a growing, to be brutally honest, it’s going to be, you know, something that’s new to us as everyone else because again, this is going to be something that, you know, rolls out on April 1st. Okay. What if fees typically look like for an adult merchant at Corpac? It really depends on a few things and I’m not going to, you know, give you a political answer so I will, you know, politicians, you know, and avoid the question. I feel that we’re very competitive and I’m going to use the adults, for example. We’re very competitive in the adult brands. It’s going to come down to a couple of things. You know, do you have previous process in history? What’s your volume? How long have you been in business? Currently, how’s your charge back ratios? So if you have a business that’s, you know, killing it, yeah, we probably can, you know, match your, you know, be lower than whoever you’re currently with. The five, nine, six, seven and other high-risk verticals, they’re more expensive than, you know, pizza place or a coffee shop because the banks push the fees to us. It’s more expensive bottom line because of all the additional fees that you don’t see when you just have straight interchange for a coffee shop. So to your listeners, I mean, in a range, you know, I think we already said like pay taxes can run, you know, 10 to 15%. I think if you’re looking, depending on your volume, you might be, you know, on the high end of maybe six or seven and all the way down to maybe three, depending on your, you know, the business and, you know, the volume, clean history. The cool thing is, is let’s say that, you know, Bruce, you started up a site, we get you on, let’s say it’s, you know, 5%, just hypothetically. We’re more than happy to review that site, maybe a 90 or 120 days or six months. And if you’re, you know, if things are good, it’s clean volume, we’ll be happy to try to reduce the fees because then we have a case with the bank. But what we can’t do is out of the gate, someone that’s processing $10,000, never been in the industry that doesn’t have any history, you’re going to be more expensive. I mean, it is what it is. Sure. And that’s why sometimes it’s better to start out with third party because then you’re going to get all the benefits that they give you with the customer service and everything else. And that’ll get them ready and get, help them get their volume up so they can go to a direct merchant account like Corp. Absolutely, 100%. I always tell people, new sites, don’t get a direct merchant account, get it, go to a third party and then we’ll build your volume up and go from there. That’s what I tell people with my consulting firm. No, that’s great. Unless you have, you know, if you’re going to hire experts that have been in the industry, okay, now you’re basically no longer a startup, you know, you have the history. But if not 100%, the pay faxes will definitely benefit you. Okay. Does Corp have any application or set up fees? Now you talked about, obviously, MasterCard and Visa, but what about you guys? Yeah, there’s really, I mean, there’s no hidden fees with us. It is what it is. And it’s basically going to be the rates and stuff. Now, obviously, if you come in and you’re like, hey, I want these additional services, maybe through NetValve, you know, I’ll go through CV Alert, you know, you’re going to pay those anyways. It’s not like, you know, these are hidden fees or, you know, things that we’re just pulling out, but no application fees, nothing like that. Okay. So, Rob, what’s your take on the recent FTC rules on recurring payments and how will Corp aid deal with this to help adult merchants? To us, I think this is a, yeah, to us, this is another positive item to kind of weed out the bad actors. Let’s face it, avoid the subscription traps. You know, I think back to so many people, you know, not knowing that they’re, you know, what do you mean? I thought I just signed up one time and now I’m getting, you know, billed, you know, for six months and let’s face it, not everyone checks your credit cards. So that’s kind of a bad thing when you go back and you find out that you’re losing, you know, be it one, you know, $39.99 or $399. Ultimately, I think this will increase customer satisfaction with larger brands who are not trying to keep their customers against their will. I always scratch my head when people are like, you know, back in the wild, wild west earlier, you know, before a lot of this where the fonts were, you know, negative three and you couldn’t see everything. I mean, obviously, who wants to really make a quick money dash? I’d rather have a customer for life than a customer for three months. And you know what’s great about that is that I think the people in our industry now, as opposed to the people who were in our industry before, I mean, I’m reading, I posted this this article on Xbiz and I’m looking at the responses and I expected to get a lot of negative. And really it’s almost all positive. The people in our industry now are doing things the right way. Yes, because I think the jokers that were in it during the wild, wild west are either out of it, out of business or dead or maybe they have conformed. Maybe they understood that I can’t do this. I mean, one of the things that we continue to do, you know, through our websites, social medias, whenever I’m out talking, you know, any conventions, whatever it might be, I mean, we’re always there to educate merchants on updating their terms and their conditions. I mean, that’s what a risk and compliance team does. We want to make sure that the websites, you know, for anyone offering subscriptions, they comply. That’s the key. And also worth pointing out, this has already kind of been a requirement for many European countries for several years. So it’s not new to us for Corp. We’re a global company. So again, you know, we embrace it. And if your listeners are saying, okay, I still don’t get this, bottom line, what does this mean? It means that now you’re going to have like a little click button to cancel on the website. Bottom line, that’s what it is. It’s got to be obvious to find that and it can’t be hidden. And it’s got to be, they said it needs to be as easy to cancel as it was to sign up. Exactly. And as you and I both know, a lot of places that was not the key. Don’t we know, how do you think this affects cross sales, by the way? Well, with merchant accounts, you can’t do that. They do. I’m just saying because you can’t do that. Pay faxes, you can do that because the pay faxes have agreements. So on the merchant side, it’s not going to have any effect because legally, yeah, legally they can’t do that. Oh, okay. Okay. So with direct merchant accounts, that’s just a complete no-no. Exactly. Interesting. I wasn’t aware of that. And you can with third party. Yes, because the difference is, let’s say that you own a business and I own a business. The relationship was with my business, not your business type of deal. So it’s not compliant to our merchant account because I don’t work for you. You might be selling a good that’s not in compliance. So in theory, you can’t do it with merchant accounts. That’s why pay fax, you can because they have agreements that allow them to do that. Sounds good. Rob, I would like to thank you for being our guest today on Adult Site Broker Talk. And I hope we get a chance to do this again soon. I really appreciate it. And like I said, Bruce, always love chatting with you at these conferences. We will see each other in Los Angeles at the beginning of the year for expiz. And anytime you want me or anyone from the core pay team would love to be back and address any questions that you have or your listeners have. Thank you again. We’ll have you back on for sure. My broker tip today is part five of what to do to make your site more valuable for when you decide to sell it later. Last week we talked about new ways to monetize your site. Next, eliminate unneeded expenses. Constantly make sure you’re not spending money you don’t need to. Make sure there isn’t duplication in your staffing. From time to time, check services you pay for like hosting and see if there are better and less expensive options. Take it from me. I’ve done this and saved a bunch, plus got higher quality hosting in the process. Again, ask us for recommendations. Along with this, make your profit and loss statement show more profit. Increasing sales and reducing expenses obviously does just that. Make sure your P&L statement accurately reflects your company’s actual costs. Not a bunch of personal expenses you put in. This will cost you money when you sell. It may help you with the tax man to put that stuff on your tax return, but it hurts you if you show that stuff on your profit and loss statement when you sell. However, every dollar in profit increases the value of your website as much as three to four times. This is why you need a good experience broker to help lead you through the process. We’ve gotten people thousands of dollars more on their sale just by adjusting the P&L statement to reflect actual business expenses as opposed to a bunch of BS. We’ll talk about this subject more next week. And next week we’ll be speaking with Robert Warren of Robert Warren SEO. And that’s it for this week’s Adult Site Broker Talk. And once again, I’d like to thank my guest, Rob Bast of Corepay. Talk to you again next week on Adult Site Broker Talk. I’m Bruce Friedman. [MUSIC PLAYING] [MUSIC PLAYING] [MUSIC PLAYING] [BLANK_AUDIO]
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