Hi, guys! I’d like to talk today about payment processors. Do you know how important they are for this industry? I’m sure you do. Otherwise why were so many programs affected by the LR outage that lasted for 7 days and finished just a week ago. The latest victim was UltimateHYIP that probably couldn’t have survived such a long downtime period anyway. First the admin Chris announced that they started to accept AlterGold which many programs did in an attempt to survive but I think it was too little too late and the damage was already done. Even though he paid all the debts amassed by this week long outage, the investors didn’t support his efforts. I can’t be 100% sure about it but it’s the way I see things. Anyway, Chris didn’t answer my email and I think the game is over in UltimateHYIP. I was in a small profit from this program so I can’t complain. But I hate when they disappear without saying a word.

Anyway, as you can see a payment processor can make or break any online program, especially if it involves the most popular payment processor like LibertyReserve. For example, how many of you have noticed that AlterGold was also offline due to enormous DDoS-attack recently? Almost nobody. Well, many of us already opened their accounts in AlterGold as really you shouldn’t trust any payment processor and should always diversify your funds like in case with HYIPs. Those of you who haven’t opened their AlterGold accounts yet are welcome to read my interview with one of the support staff of AlterGold that was published here in my new “Payment Processors” section of my site. For the last few days I can see that AlterGold increased their anti-DDoS protection and it’s surely a good sign indicating their willingness to survive this undeclared war between payment processors.

Yes, I think there is war between them with DDoSing and blackmailing and the like, and especially it concerns AlterGold and LibertyReserve. The prize in this war is the investors’ (our) money. Who will win the prize and be ready to serve (or rob) us? I think we will see soon. Otherwise, maybe they will be able to make a deal and stop their war, at least temporarily. The second option is very possible and will be beneficial for all online investors. But will it be beneficial for us in the long run?

Who knows what purpose these payment processors have in mind? Maybe they want to close up shop when there’s enough money for them? Maybe they will start a policy of blocking or freezing the users’ accounts and obtaining the money in a more legal way like e-gold did? There were many criminal payment processors in the past and I doubt there will be none in the future. The processors come and go like many HYIPs and autosurfs. The only difference is that their lifespan is much longer as they can last for years before failing. This doesn’t make them less dangerous and members’ distrust in relatively new payment processors is completely understandable.

Don’t you think that it’s because of this deep distrust LibertyReserve tried very hard to save face after the long downtime by publishing this update a week ago?

“Dear friends, Here are some new and exciting updated that are coming up shortly:

From all of us at LibertyReserve – best of luck and a special thank you goes to our members, exchangers, merchants and everyone else who stood by our side.”

It’s a great update in my opinion. But then one fair question rears it’s head: why did LibertyReserve consider it ok to work without proper phone support, offline offices and other things greatly increasing their transparency in the past? Why did they only think about it now right after a long DDoS attack that shook members confidence in them and gave life to a new wave of distrust that endangered their business to its core?

I’ll tell you why they did so. Of course it’s only my own speculation but I got used to not trust anything being said online for so many years. Anyway, plans will remain just plans unless they are actively pursued and implemented. Did you notice that there are several deadlines which are dated for July and August this year? The plans are huge but I don’t have any confidence that they will be accomplished by this time. A great amount of work needs to be done but how can we expect this from a company that even didn’t bother about installing top-notch DDoS-protection till the last minute?

Well, in my opinion this update was published with one aim in mind: not to lose any members after this recent failure. The plans can be easily forgotten by July but at the same time LR will keep face and investors by building impossible expectations. Could it be part of a plan to run away soon? I would like to be mistaken about this and will gladly withdraw this in case their plans become reality. But in my opinion it’s really better to be on guard than have a false feeling of safety especially when it concerns to your virtual wallet with the real money. Anyway, I urge you to exercise caution with LibertyReserve processor, don’t keep big amounts there and follow their progress for accomplishing their plans by July-August 2008.

I will keep you updated about LibertyReserve issues and other payment processors. In fact, I already opened another section on my site, “Payment Processors“, where I will publish some interesting articles about payment processors that are vital to know about if you’re in this industry. The first articles have been published already and you can read them here. The section will be updated frequently and soon I will publish more articles on the payment processors topic.

In addition I would like to say that the competition is fierce among payment processors and surely many of them will take the chance to replace LibertyReserve or at least gtt a piece of the juicy pie made from investors’ money. Such possible rivals appear very frequently now and many of them deserve our close attention. For example, recently I was contacted by one payment processor that has big plans to develop its business and become one of the big players in this industry. I would not name it yet before making some further research and sending some questions for an interview but soon you will be able to read about it on my blog.

In the end of my post I would like to add that the admin of Invest4FastMoney Rick agreed to answer my questions for an interview which I hope to publish here tomorrow. Stay tuned and I’ll see you tomorrow on my blog!