Blog Item

An Update Regarding Plimus

Plimus have suspended the accounts of Forex EA sellersMany of you reading this will already be aware that, as of a couple of days ago, Plimus decided to suspend accepting new orders for Forex related products.

Without prior warning, on the 10th January, Forex vendors selling their wares through the Plimus network received an email similar to the one below:

The credit card associations (including Visa and MasterCard) are increasing their scrutiny of merchants selling products within a number of online segments. Affected market segments include, but are not limited to, the following:

- Online auctions
- Foreign Exchange (FOREX)-related products
- Media
- Poker chips and other virtual currency

As you offer products that fit within one or more of these segments, Plimus must now undertake a detailed and exhaustive review of your account, and its compatibility with the Plimus platform. This review will take approximately 30 days; at its conclusion, we hope to be able to advise you that we can continue to provide e-commerce services to your business.

During the period of this review, we must undertake two steps. First, the payout scheduled for the 15th of this month will be suspended for a period not to exceed 30 days, pending our confirmation that all transactions will be honored by the card associations. Second, your account will be suspended as of Thursday, January 12th, which will mean that no further transactions can take place until further notice.

We recognize that this represents a significant business challenge, and apologize for the inconvenience. If you believe your account should not be considered to be within one of the stated market segments, or if you have any questions of concerns, please contact Vendor Support directly."


So, what does all this mean?

Well, first and foremost, the chargeback rate of Forex EAs is significantly higher than the industry average. Chargebacks occur when somebody buys something and pays using their credit card. Let's suppose the buyer subsequently asks for a refund, and gets an unsatisfactory response from the vendor. He then goes directly to his credit card company, tells them that the product is faulty and requests that the credit card company refund him directly themselves. The credit card companies automatically make the refund and then pursue the matter with Plimus. Given that the credit card companies pay in arrears, they are able to call the tune and simply withhold the disputed money from Plimus. Plimus then have to adjust their own accounts and claw the money back from the vendor which, often, they will have already paid out themselves.

It can all get a bit messy, to say the least.

Obviously a small level of chargeback is only to be expected. I don't know if it's true, but I have heard that between 0.25% and 0.5% of all sales is the typical industry chargeback level for software downloads, and that chargebacks within the Forex niche are many times higher than these levels.

The chargeback system is one which was designed to protect innocent victims who have had their credit card stolen and then used fraudulently. The system is also designed to protect purchasers who don't receive their goods. It's increasingly being used, however, as a means of obtaining a refund by buyers for no reason other than that they simply don't like what they've bought. Clearly, the dissatisfaction level amongst purchasers of Forex EAs is pretty damn high, and it's fair to say that the credit card companies have had enough!

Now I could write a 10,000 word essay about Plimus's actions and also about my personal opinions of this murky little industry in general but, fortunately, I won't bore you all with that.

In a nutshell, Plimus have been pressured to do something about the high level of chargebacks, by suspending the vendor accounts of Forex related products as per their circular which I pasted above. On MellyForex, around 70% or 80% of the EAs I have in forward test are sold by vendors using the Plimus network. As of today, my original affiliate links which take readers to a vendor's website via Plimus no longer work because Plimus has suspended all of those products.

I am in the process of editing all of my links so that the links take readers directly to the vendor's website via a non-affiliated route. The problem is that, when you get onto the vendor's website, you probably won't be able to buy anything because Plimus won't processs the sale.

UNLESS THEY ARE HAPPY TO WAIT 30 DAYS PENDING THE OUTCOME OF THE PLIMUS REVIEW, VENDORS ARE GOING TO NEED TO SET UP SALES ORDER PROCESSING WITH AN ALTERNATIVE NETWORK. THERE ARE ARE GOING TO BE INEVITABLE DELAYS WHILE THIS HAPPENS, AND THERE MAY BE SOME BUGS IN THE OPERATION. VENDORS OF SOME OLDER PRODUCTS MAY EVEN DECIDE TO WITHDRAW FROM THE MARKETPLACE COMPLETELY.

In the meantime, the EAs in forward test at MellyForex will continue to function and I hope that the vendors are able to implement their necessary changes as quickly as possible. It certainly strikes me that not all Forex EA vendors are rogues, and there are a lot of good guys being unfairly penalised here. I have to say that it would have been nice of Plimus to have given a bit more notice than they did for vendors to find alternative payment processing networks!

Discussion (0 comments)

Be the first to leave a comment!

Add a Comment

;-) :-) :-D :-( :-o :-O B-) :oops: :-[] :-P

To prevent automated Bots form spamming, please enter the text you see in the image below in the appropriate input box. Your comment will only be submitted if the strings match. Please ensure that your browser supports and accepts cookies, or your comment cannot be verified correctly.
»