I help run an online business called MamaMikes (www.mamamikes.com) our
service has for the last 4 years made it possible for African
immigrants (mainly from Kenya) living in North America and Europe to
buy grocery vouchers for their family at home. The families receiving
these vouchers use them at specific grocery stores spread out in
Kenya. These vouchers go along way in helping their family meet their
daily needs like food, household requirements, etc. The vouchers
cannot be converted into cash.

After 3 years of processing credit card transactions, our merchant
provider CardReady (www.cardready.com) decided to suddenly terminate
our relationship, stating that our ?Business type (is) deemed
Prohibited under current Bank underwriting criterion?

They have not provided any more information. 

I want to legally challenge their reason for terminating our business.
To do this, I need to know if the reason they have given us for
termination is valid. Is there a list of types of business that are
not allowed to accept credit cards online? (I know for example online
casinos are not allowed to accept credit cards) Does the business we
operate, qualify to accept credit cards?

If you need any more help to research this question, please ask.

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Request for Question Clarification by czh-ga on 30 Jun 2005 20:15 PDT

Hello swali-ga,

I?m wondering if your credit card company terminated the relationship
because of some change in the banking regulations following 9/11. I
know I?ve read lots of articles in the paper about charitable
organizations who were sending overseas being accused of being a front
for terrorist organizations. I?m not saying that anyone is accusing
you of anything like this but you might have been caught because of
some laws created to solve this kind of a problem.

Please tell us more about your company and what kind of account you
had set up with the credit card company. The exact wording of the
correspondence when they cut you off would be helpful. The more
information you can share, the more likely we will be able to help.
Thanks.

~ czh ~

---

Clarification of Question by swali-ga on 01 Jul 2005 09:07 PDT

Hello Czh,

Thanks for your insights, I too have read much about charity
organizations that were closed down after the events of 9/11 changed
the law. I however do not think this is what prompted CardReadys
decision. As I write, they have not explained their reasons, they have
only stated them. (I am very sure; none of their reasons are valid,
although I want to be certain)

Below are two different letters they have sent me, 20 days after
suspending our account.

--- 1st Letter ---
MAMA MIKES LLC,  

Pursuant to our rights under the acknowledged and signed merchant
agreement, CardReady International, Inc. terminated the above
referenced merchant account effective June 20, 2005.

Reason:

- Violation of the merchant agreement 

- Business type deemed Prohibited under current Bank underwriting criterion. 
 
All current and future action is sanctioned by our rights under of the
 acknowledged and signed Merchant Bank Card Agreement.

CardReady International, Inc. is obligated to recognize the chargeback
periods set forth by the card issuing banks, Visa and MasterCard. They
are 180 days for domestic issuers and potentially 360 days for
non-domestic issuers.

Our merchant agreement provides for a (7 months) deposit retention period.

Inasmuch as you processed transactions through June 20, 2005, we are
justified in recognizing the chargeback period, which will expire
December 15, 2005

Assuming there are no open valid chargeback claims, we will consider
release of any remaining retained deposit funds at that time.

I trust this information will serve to clarify our position in this matter.

Thank you.


Respectfully,

[name omitted]
Vice President,
CardReady International, Inc.


---2nd Letter---
MAMA MIKES LLC,

We have recently conducted a review of your account, evaluating such
elements as the type of services rendered and sales patterns.  After
careful consideration, we have elected to exercise our right to cancel
our merchant agreement with your company, MAMA MIKES LLC.

This letter will serve as CardReady International and National Data
Payment Systems? notification of its election to terminate the
merchant agreement, effective July 1, 2005.  Please be advised that
upon the effective date of termination, you will not be authorized to
process Visa, MasterCard, or other credit card transactions through
CardReady International and National Data Payment Systems.

This termination in no way affects your obligations, as detailed in
the merchant agreement, which survives the termination.


Sincerely,


[Name omitted]
Director of Risk Management
CardReady International

---

Clarification of Question by swali-ga on 01 Jul 2005 09:42 PDT

Czh,

The answer to your first questions is very simple. Our online service
makes it possible for Kenyan Diaspora with family and friends at home
to buy their family practical gifts such as ?grocery vouchers? (their
recipients at home use these vouchers for their grocery shopping at
one of the 3 grocery stores we have partnered with in Kenya),
?airtime? (airtime is a popular pre-paid calling card, the majority of
Kenyans use to make phone calls with from their mobile phones) and
other gifts like ?roses?, ?cards? and ?shopping mall gift vouchers?.
To understand our business more, visit our website on
http://www.mamamikes.com or google the words ?Mama Mikes?.

On your second question about the type of merchant account we have, we
opened a normal credit card merchant account with CardReady. This
merchant account has been effective since December of 2002 (this was
suddenly terminated in June of 2005) The merchant account allowed us
to process credit card transactions, thorough an online gateway
(Authorize.Net) Our merchant provider (CardReady, the company that
terminated our account), processes the transaction, remitting the
value of the transaction to our bank account, in the process charging
a fee for every credit-card they processed and charging us a monthly
fee for the transaction). In the course of 5 years, we have only had 5
charge back transactions (we currently process close to 100 orders a
month)

---

Request for Question Clarification by czh-ga on 01 Jul 2005 10:34 PDT

Hello again swali-ga,

Thank you for the detailed clarification. With all you've added I can
see that I'm out of my range of expertise. I hope that another
researcher more familiar with banking and credit card issues will be
able to help.

All the best.

~ czh ~

Hi Mama Mike,

We will do a research on Card ready, Marchant Bank and give you a feed back.

Mau

Hi Mama Mike, a friend told me about your website and I was going to
use it to credit my daughters phone account only to come up against
all this. More's the pity for you, it's an excellent idea. Now, just a
thought. Wouldn't you be able to do all this through PayPal or
WorldPay, like they do on Ebay? What if you actually set up your
business on Ebay? Is that viable? Just my two cents. Also, a few years
ago there was a similar service called something.....basket (can't
remember the full name) That however, was just for vouchers (Sarit)
and flowers. I used it briefly in the past. Was that anything to do
with you? Best of luck in resolving all this.

Mimi

YES you can. You can go to sites that offer a full list of credit card
processing services like http://www.merchantdigital.com. There you
will be able to aquire an online merchant account at no cost as well
as any software you will need to tie in your shopping cart. You will
also have the ability to bill credit cards through their online
payment gateway called WonderPay. You can see a demo of this
nationally recognized gateway at
http://www.merchantdigital.com/html/free_demo.html

Try 2Checkout service .I use them for my  on-line business. or you can
consinder to use e-currency .

check this web site <url>http://giexc.com</url>