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Will Losing Paypal Kill the Traffic Exchange Industry?

Paypal has suddenly limited, closed, or restricted the accounts of major traffic exchange, mailer, and advertising space owners.  While not entirely unexpected in some ways, this comprehensive effort by Paypal to vacate the traffic industry space is certain to throw both major and minor program owners “for a loop”, as they say.  After briefly touching on the issue back in June, I have spent the last two weeks watching as nearly every major player in the incentivized traffic niche has moved quickly to respond to the industry-wide Paypal account closures.  Some owners have had accounts limited already, some are being proactive and pulling Paypal in advance, and a few are fighting it out on the front lines with the world’s leading payment processor.  In the midst of this furious flurry of activity, I’ve been asked one all-important question…

Will the loss of Paypal kill the traffic exchange, viral mailer, and incentivized traffic industry?

Of course not.

If you’re asking me

Over the last decade (or so) those of us in the industry have collectively watched as “purges” have played out with payment processors.  Although this may be the final purge by Paypal for the traffic niche, it definitely doesn’t mean the end of paying people to view your ads.  Nor is it “The first rodeo” for the best and brightest in the business.  Already leading prgoram owners like John Bell, Steve Ayling, Paul Kinder, the Legacy Team, Matthew Graves, Maryanne Myers, Kenneth Koh and Darren Olander have made bold moves to implement alternate payment processors – all while still (apparently) making good on commissions currently owed to members.  By no means is that short list of names a complete tally of owners that have been hit – but you can be sure if those folks are switching away from Paypal, then the deal is done.

So what does this mean for the future?

First things first – folks are quickly setting up alternate payment options for their businesses.  Both Payza and Solid Trust Pay are solid alternatives for affiliates, and the more savvy owners are also ensuring that Bitcoin payments can be accepted as well.  Is any of these an ideal solution?  In terms of matching exactly to Paypal’s formerly provided services, no.  Insofar as moving money for purchases and payouts, yes.  Plus, the current paradigm shift for us all also means opportunity…

An opportunity for Paypal’s biggest competitors to seize market share.

As tens (hundreds?) of thousands of online affiliates flee Paypal to create Payza and STP accounts, you can bet that both of these companies will work hard to provide positive experiences and reliable service for both program owners and their affiliates alike.  The transition to these alternate payment processors likely won’t be seamless, nor will every owner out there make the switch succcessfully.  I am certain, though, that both payment processors will be doing all they can to snare this “fresh slice of the pie”, as it were.  It’s my belief that the end result of the traffic industry’s Paypal limitations will be a more streamlined, less-anxious industry as we approach the New Year.

Or maybe I’m just a dreamer. 😉

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11 comments

  1. te owners should request payaza to reduce their fees as they will get more volume hence thsy would not lose.

  2. While Payza seems to be the best alternative based from Canada, a lot of people relate to it as the more costly option, but I don’t see why it is. for the service they give for being a very small company. I’m sure this will really help Payza stand out and give the PayPal Giant a run for their money and most of all make them realize what they are doing in 100% unethical. What PayPal do not realize is that its the online entrepreneur and the internet marketer that runs things on www. Calling the industry scandalous and barging out hurting everybody is not the way to go at it. Have a look at the banking industry if you want to see how scams run.,, I wonder when will PayPal realize that buyer protection is NOT something a payment gateway can provide or should..

    • “Barging out” is a great way to describe it – as though they suddenly decided the entire matter over a dinner party that went wrong. Thanks for the feedback!

  3. People will adapt who want to continue in the biz… However it would naive to think it hasn’t already ruined owners cash flow. I personally spend more through TE’s,mailers,etc promoting my own stuff and my 75% of my money is in PayPal (linked to my bank and credit card) I use PayPal to pay for everything because they give you cashback for using it as credit. Someone sends a offer that is good, I buy it using PayPal. Not to say I don’t have some programs that pay me commissions monthly but already in the last 2 months the commissions sent to Payza (I absolutely Despise, but it is what is) The fees are ridiculous to transfer to bank or to add money. I still want the commissions that I’ve worked years for but to continue to promote and get new referrals, I don’t see the ROI after all the fees. The owners will move on and the dedicated members will too….. It will just take some time for the them to adjust to the new processors and make up for the losses they surely have endured. A wildly popular program owner and well known owner flat out told me it was bad, very bad. I asked how many people resubscribed with a new payment processor, He sent a laughing/crying emoji.

    • Definitely a cash flow hit, for members and owners alike – and I’m sure more than a few owners are trading sad emojis behind the scenes. One upside in terms of luring buyers to resubscribe will be a focus on the current value of each advertising program, as owners work extra hard to get those new subscriptions. Might be good for us as buyers in the long run…or maybe not. We’ll see, eh? Thanks for the insight!

  4. Another aspect of this issue is the loss of income for owners from upgraded members who aren’t able to fund those upgrades from the replacement processors because in the main they may be waiting for commission payments from sites in order to pay those upgrades, though this may only be a short term issue for some, and loss of those upgrades will usually mean less commissions from downlines, and thus less available to cover upgrades etc.. spiralling ever downwards.

    • Hi Steve, you’ve hit on a great point. Surely many folks in the biz promote “A” for commissions, while paying for “B” and “C” from that source of revenue. Hopefully the transition pain will be short term – I know I’ve already seen my monthly residuals hit a bump in the road!

  5. The ‘opportunity’ is ripe for a new and honest processor to clean up on all the ones currently being offered. None of them have a clean past, the main one everyone is running to, has a court issue hanging over their heads as investigations continue.

    What is needed is a processor that does not virtually steal commissions by hidden fees. For example monthly fees for inactivity. There are more.

    The point is as things stand, owners and affiliates have very little choice. Been there before, if anyone has been around when PayPal got its start.

    What goes round comes round thus I foresee another run for another processor yet.

    When the panic stops and users think then we might see a whole new approach to an ongoing and unfortunate happening.

    • Hi Fran! You’re spot on – the range of alternates is narrow, to be sure. While I’m anxious about relying on processing options with which I haven’t worked much recently, I am excited to see if/how they’ll step up to serve the thousands of incoming affiliates from our niche that are creating accounts for the first time. Opportunity is ripe, indeed. Cheers!

      PS: the link to your blog rendered incorrectly for some reason. If anyone hasn’t read Fran’s recent articles on the matter, you should. Here’s a good read: http://fransfranticmarketing.com/2016/10/22/why-the-traffic-exchange-industry-is-under-attack/

  6. You know the real reason why Paypal refuses to work with Traffic exchange Industry?

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