Hokey Pokey

Ever heard of the dance Hokey Pokey? Want to know why American and Canada are closing down payment processors are being closed down? The World will be follow soon.

The hokey pokey (United States, Canada, Ireland, and Australia), also known as the hokey tokey (New Zealand), the hokey cokey (United Kingdom) okey cokey, or cokey cokey, is a well known party dance and could well describe the activities of the money processors lately.

You put your [money processor] in,

Your [money processor] out:
In, out, in, out.
You shake it all about.
You do the hokey pokey,
And you turn yourself around.
What money processor is still about!

What if the hokey pokey is what it's pix

Who Uses Payza, Egopay and SolidTrustPay?

Many people online and in internet marketing around the world have to use ‘third party money processors’ such as AlertPay (now Payza), Liberty Reserve,  Perfect Money, Egopay – to pay for program subscriptions and to receive payments back to their home account. It’s a way for some one in one country, i.e. UK, to send or receive money to or from a person or business organization in another country, i.e. USA. Even PayPal comes on to the list as a money processor. There is a percentage cost, of course, to use these processors/exchanges. Not just the US and the UK is involved in this. Canada, Africa, Greece etc.. Many countries are using these money exchangers. This is a way that more countries and be involved in online businesses and programs.

What’s Been Going Wrong?

The payment processor industry has been hit with new licensing expectations as well as significant growth in the last quarter. This has caused delays with certain providers and changes with others. These situations are forcing fresh decisions for the business opportunities on how to move members money in and out – and also how to protect the programs and the members money.

First lets start with Liberty Reserve.

Liberty Reserve, a Costa Rica-based private currency exchange with its own digital currency, has shut down around the same time its founder has been arrested in connection with a money laundering investigation.

Arthur Budovsky, the exchange’s founder, was arrested in Spain, according to the Costa Rican newspaper The Tico Times. The paper reported that the money laundering investigation was a joint operation between authorities in the US and Costa Rica.

It added that US authorities are likely to seek to extradite Budovsky to the US.

Liberty Reserve used its own digital currency — also called the Liberty Reserve, or LR — to provide payment processing services to customers holding US dollars or euros.

In addition to enabling such transactions for a low fee — a flat 1 percent with a maximum of $2.99 — Liberty Reserve didn’t allow charge-backs. However, the LR exchange has experienced significant security problems several times in the past.

In April 2011, it was revealed that Liberty Reserve customer information was accessible to Amazon. And a reported script problem in August 2012 ended up locking many users out of their accounts, some of which had thousands to tens of thousands of dollars in them.

Liberty Reserve’s founder himself has had past run-ins with the law.  Budovsky and a partner — Vladimir Kats — were arrested in 2006 when US authorities determined their digital currency exchange, Gold Age, was conducting “money transmittal without a license”. The two were sentenced to five years of probation in 2007.

Budovsky later left the US for Costa Rica, where he founded Liberty Reserve.

Because Liberty Reserve enabled customers to set up accounts “using little more than a valid email address,” the exchange attracted a large number of users involved in cyber-crime.  In fact, the first signs of the latest troubles for Liberty Reserve, before Budovsky’s arrest, when the exchange’s website went down.

The outage set off increasingly anxious discussions on several major cyber-crime forums online, as many that work and ply their trade in malicious software and banking fraud found themselves unable to access their funds.

Around the same time Liberty Reserve’s website went offline, so did the sites for several other digital currency exchanges, Krebs added. They include asianagold.com, exchangezone.com, milenia-finance.com, moneycentralmarket.com and swiftexchanger.com.

LR for many years, alone with other payment processors and its demise is simply a logical outcome for any and all payment systems out there, which are ‘short’ of getting money transmitting licenses all over the world and in US in particular. I’ve seen many of them “come and go” (e-gold, e-bullion, INTGold, StormPay, altergold, ePassporte… ) and for LR it was only a matter of time. The most important conclusion one should make from all these closures of the past, is to NEVER keep excessive amounts of funds in any of such payment processor systems.”


Next  AlertPay.

AlertPay  had been going through a few problems and ended up losing their ability to process credit card transactions – pretty catastrophic in internet world when you are a company that specializes in making and accepting secure e-wallet and credit card payments. With over 8 million members, services in 197 countries and in 22 different currencies, more than 75,000 merchants used AlertPay as a one-stop-shop solution to accepting payments.

Eventually they were bought out early May 2012 by MH Pillars, a UK-based firm specializing in prepaid-card solutions purchased the Montreal, Canada-based online payment platform / online payment processor.

‘AlertPay’ became ‘Payza’ on the 14th of May specializing in e-commerce processing, corporate disbursements, and remittances for individuals and businesses around the world, pretty much AlertPay but still no credit card facilities. The best you can do is fund your Payza e-wallet by CC at 3.5% fee.

Payza is adopting some of thoughts of Paypal in that they only want to deal with regular program transactions.

Activities Not Allowed with Payza

Any indication or demonstration of a literal rate of return on a contribution, payment or investment, while not being licensed to sell or solicit. Selling of Unregistered/Unlicensed Stocks, bonds, securities, options, futures, or investments in any entity or property, including (but not limited to) corporations and partnerships or sole proprietorship, are prohibited:
Solicitation, marketing campaign, direct selling or any other comparative effort will be considered a violation of the User Agreement. If you are registered or licensed to take such action, you may be requested to present documentation demonstrating authority to do so from a Securities Exchange Commission, Commodities Futures Trading Commission or other equal and comparative agency.”

On Payza’s blog, they state in a comment response that all program owners whom this will affect, have been informed, predominantly the HYIP industry. So if your business or company that you work with hasn’t got in touch – you are probably OK.

Solid Trust Pay ~ Now Back On Track

Solid Trust Pay or STP as they are called have suffered from a series of ill fortunes over the last few months which thankfully as I speak towards the end of July – appear to have been resolved.
1. Program issues – programmer let go!
2. Server Company takeover with little warning resulting in up time dropping to just over 89% and getting DdoS attacks, outages, issues and basically the worst service imaginable.
3. After complaint, moved to a new mega server system that was supposed to cure all problems. It was a complete mess up. They neglected to move the database which resulted in members being told that their accounts did not exist as indeed..there was no database hooked up at all. They also did not move over all of the various scripting modules required so when they did hook up the database, 30% of all page links displayed a clean, fresh, white page containing absolutely nothing.

Fortunately all the pieces appear to be back together again and the site is back online again and looking to be working OK this last week in July.

On a more positive note, Solid Trust Pay is now fully compliant with the USA regulations requiring full licensing. They have partnered with a chartered bank in the USA and are therefore under their licensing, which is fully allowed under federal law.

That should resolved the threatened state licensing problem that was looming.

Solid Trust Pay is good to go – and they take Credit Card transactions!

Next EgoPay

EgoPay is in no way owned or operated by Payza, and from the information provided are in no way affiliated, all though many emails may suggest otherwise…

Whether you like it or not, if you decide to bypass some of the regulations being put in place in the USA to protect you and your money being exploited – then you have to understand there are increased risks!

EgoPay is registered in Belize (offshore) with the registry number 118260 but the domain was registered by a private firm in Arizona,
You must be 18 years old to use EgoPay.
One person can create multiple accounts with different email address.
EgoPay does not allow the following business types: gambling, child porn, pharmaceutical sales, replica, hate, bestiality and tobacco, alcohol sales.
EgoPay does not hold or take responsibility for wrong transfers, even if the instructions provided by a Merchant are incorrect. Once you send funds to another account then it cannot be reversed.
Unlike Payza or the former AlertPay, there is no option for creating a dispute at EgoPay.

Easy to deposit and withdraw simple transfers to and from your Payza account, plus other flexible options.

EgoPay charges 2% plus $0.25 per transaction for personal and exchanger account types. For business account the fess is 3% plus $0.50 per transaction. But for the first 3 months (that is till 5, October 2012) the ‘percentage’ fees is down to half rate. It means for personal and exchangers accounts the fee will be 1% plus $0.25 whereas for business accounts it will be 1.75% plus $0.50.

EgoPay also does not allow you to transfer to your bank account, they require you to use a non-guaranteed third party service to transfer your money to another payment processor which you can transfer out of. This whole EgoPay thing smells of the same scent as the Illegal Investment Programs that are supporting it.

As with all marketing and especially when using your money, due diligence is necessary, if the scam investment site you are using does not take your money, the scam payment processor that supports them likely will.

This probably has to do with the fact that there are going to be no exchangers left who provide services to US and Canadian citizens. From an operator point of view if accepting US and Canadian puts the whole system at risk, it’s better not to accept US and Canadian residents. This protects the non-US and Canada residents. It is also the big weakness of all systems that run on US dollar denominations/backings. The US dollar is controlled by US authorities. If a system is not US dollar backed, then there are fewer rules and regulations.

So we now know why these processors are closing down in the US then Canada and then the world. They have limited control.





About Debi

I am a retired nurse. Wife, mother of three and 2 wonderful grandchildren. “Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. Watch your character, for it becomes your destiny”
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