[cd34]

Some strange history:

IBill was located in Ft. Lauderdale for a while and I believe shared part of a data center with FirstData (which is the company that has pretty much caused most of the turmoil in the transition).

Way back with web900, there was only one company that would do adult pay-per-call that was large enough and reliable enough to process and make payments to ibill. That company also happened to sell bandwidth and had enough power to say to iBill, use our bandwidth, or you get no 900# processing. I believe it was in 2002 after a total meltdown of one backbone, and the subsequent meltdown of that company's backbone, iBill was able to put pressure on and get connectivity from another company. They have also since moved their data center to West Palm Beach and still buy the majority of their bandwidth from their web900 supplier.

Now, you have the dispute with FirstData, the shuffle to get a new merchant account, the lack of ability to run as an IPSP (this has greater consequences), and the loss of a great many IPSP clients that won't pay to get their own account and the rapid erosion of their client base through non-communication. I have helped many, many clients move from iBill in the last 60 days.

So, lets think about what has happened. They cannot process Visa, the companies that are generating sales are leaving, which gives you the tiny companies that haven't left yet which are not generating enough sales to dilute any chargebacks that are coming in. This turns the scrubbing up, hence, fewer sales get through, the ratio continues to climb. There are only a few ways to reduce a chargeback ratio that I know of, and taking fewer transactions isn't one of them.

So, enter gkard -- a prepaid card that allows people to pay iBill and then they can use that money elsewhere. Stored value cards have been around forever. ePassporte is very similar, just targeted to a different market. Now, years ago with stored value telephone cards, the Chinese government/telco decided to make really pretty cards. People liked these cards and decided to keep them. A little clause in the government required any money on a stored value card to be held in escrow until the time was used before the money could get released to the phone company. What this did was protect the purchaser of that card from the telco going bankrupt and not honoring the card. gKard is non-chargebackable (supposedly), but then the online casinos claim the same thing. Stored value cards hold huge benefits for companies that run them. A stored value card is a 'float' account -- tons of cash sits there that will get paid out, but, at a unknown time. All the while, your money sits there (usually with no interest) and the company that has it must only meet any daily obligations. Consider if 50000 people all leave $30 on their card while searching for a paysite to join. That is $1.5 million that sits in their account until they have to do a payout. Now you see why epassporte is lax about adding a way to withdraw money to a bank account.

If I had to guess, there's a 5 letter word that comes to mind that describes iBill's behavior. The question is, can they break the cycle.

Yes, they are a US company, but, as a US based company, they hold the same values that almost any company has -- and that is self-preservation and distribution of profits. You can rest assured, as every other large company: Enron, Worldcom, NYSE, that the board members and major stockholders are being paid in a timely manner.

Are their actions enough to have a lawsuit filed? Sure. Is it worth your money to do so? You're sort of at the mercy of the information (or lack thereof) that iBill will supply the courts. They will blame the payout delay on anything except their actions, and they'll draw things out until it is either more expensive to have sued, or, hey, sorry, we have no money left. Their lawyers will be better than your lawyers -- that is almost a fact. You can't sue over your lost Visa income since the processing was shut down. In most cases, that comprises ~65% of the signup/rebill revenue. So, you sue to recover the possible mastercard revenue that you haven't gotten + the $350 you paid. Your attorney will probably charge you $350 to file that motion.

What did DMR do before they shut down? promised payouts that kept moving further and further back. ABM? 6 months of taking transactions without paying. Epoch? I remember a time when they dumped the small guys and set up a $50k deposit/no reserve account. Not sure what they considered that $50k if it wasn't a reserve. Digiblaze? He took his money and ran (and his top guy, also ex-dmr is now an ibill guy). Websitebilling? moved to a bearer-share island and shut down without warning. Globill? moved to the same bearer-share island and shut down.

However. IBill still has a considerable Transaction Processing business for people that have merchant accounts. They have a somewhat substantial non-adult client base and if they were to get rid of the liabilities of the worst offenders in the adult side, could effectively do IPSP again. The smart move is to do almost what Verotel did. You can IPSP until you hit $1k/week. Then, they keep the better quality transactions in their pool and move the bigger guys to TP which again helps. And so far, iBill has only been ~60 days behind, and have started communicating. When a company stops communicating, that's a danger sign.

There are chinks in the armor of every processing company out there. You can read a lot into their actions and inactions.

Personally, I feel iBill will come through it, but, they are losing a considerable benefit from the lack of IPSP processing (and its not just the money)

iBill has made some really dumb mistakes, but, its easy to see that in hindsight. The whole problem really stemmed from an assumption. My recommendation, which certainly isn't in iBill's best interest, is to move to another processor. CCBill/vscrub and Paycom/Epoch/epassporte are two IPSP processors that seem to still be standing fairly strong. Netbilling would be the choice if you wanted to get your own merchant account.

I have also had clients that have used other processors like ikobo and a few others, but, its just a matter of time before those reins get tightened up on the ones that are skirting the issues.

I know this is just a long rant that barely skirts the last question. In short, I don't believe that suing iBill will result in enough gains for it to be worthwhile. Unless you can easily prove willful negligence on iBill's part -- and as an independent observer, I don't believe you can easily find that -- then the case will do nothing but recover costs and income earned.

Move on. If iBill gets caught up, use them as a secondary or backup if you want.

You could file in small claims court in Deerfield Beach, FL if the amount is <$5000 (I think that is the limit)

Not really what you wanted to hear, but, I'll bet that any efforts to recover the money will be met with brick walls every step of the way.