Ibill fined $5.85 million by Mastercard

[FATPad]

Just thought it was kind of interesting. ;)

http://biz.yahoo.com/e/030331/icpt10-k.html

Look for the paragraph that starts with "We process MasterCard and Visa transactions through First Data. On March 14, 2003, First Data was notified by MasterCard of an estimated assessment with respect to iBill’s noncompliance with MasterCard’s charge-back rules."

[Winetalk.com]

does anybody still use IBill?

[FATPad]

Yep. I know at least one big program does. I think ARS does, too.

Although they did lose a lot of clients last Nov when the new Visa fees kicked in.

It also sounds to me like they're expecting some fines from Visa, too.

[Winetalk.com]

Lensman was one lucky SOB when I switched him to Epoch....

[DrVoyeur]

Thus the reason that they had to fire 40 employees with salaries of $146,250 per year. Now the whole picture is out there!

[Rolo]

Lots of recurrings are still at IBill - everybody in this business will lose if anything happens to IBill...

Its VISA and MC issuing fines, so my question is - does anybody still use VISA and MC?

[*KK*]

Always more to a story than meets the eye, I'd bet.

[DrVoyeur]

well what is interesting to me is that these guys used to be clearly the #1 top dog - and now - except for newbies - they cannot capture almost any of the large fish - going public didnt help them it hurt them - only the owners and possibly top managers benefited - but now they're in the dumps - they only keep big guys like oxcash and others that started with them when they are where on top by threatening that they will pull their rebill $$ if they dont keep signups going their way - even in small amounts - if they would just wake up and adjust and LISTEN to what the customers want and need then they could possibly reinvent and come back - otherwise - I would say that their days as the adult leaders are numbered

[meatloaf]

What I found interesting from the article was the continual reference to the "old ibill" ... I know it is common procedure to dump crap on the old team & owners after you take over a company/business that isn't operating well in the public's eyes.

As KK said, there is more to this story then meets the eye. Perhaps the "practises" of the old team in making ibill look 'juicy' to intercept & the public has something to do with it ... it's common knowledge that 6+ months ago they recruited many of the large operators like cecash, sexhit/intergal & more. to get some of those accounts they must have offered good deals or inducements.
but I'm not sure if this happened before or after the buyout.

The 3rd party processing business model has to be one of the more profitable models on the net.

It would be great if intercept/ibill did a deal with Paypal to process adult transactions, with their 20 million users it would make good sense for ibill to tap into that consumer base.



Last edited by meatloaf at Apr 1 2003, 08:37 PM

[RawAlex]

Actually, I got the impression that they put alot of these special charges against the "old ibill" as it limited the payouts to previous owners...

As noted above we acquired the iBill assets from Internet Billing Company, Ltd. (“Old iBill”) in April 2002. On February 11, 2003, we amended the iBill asset purchase agreement to settle outstanding issues related to the $10.5 million remaining in the purchase price escrow that secured representations and warranties of the former owners, including those related to potential Visa and MasterCard fines for excessive charge-backs. Under the amendment, we received $8.0 million from the escrow, and the former owners of Old iBill received the $2.5 million then remaining in the escrow. In the amendment, the former owners also agreed to eliminate the earnout provisions in the purchase agreement. We agreed to indemnify the former owners for any claims resulting from processing-related activities that occurred before April 8, 2002.

Sounds to me like the new company took more out of the escrow than expected to cover these "expenses", which left less cash for the "old ibill".

Alex

[meatloaf]

obviously with pressure from shareholders, shifting some of the blame for this large fines to the old ibill is a standard practise. I guess thankfully for intercept the reserve covered the charge and they didn't have to dip into their own pockets.

However their claim that first data probably wouldn't asses fines greater than their reserve held was a bit of concern. Doesn't the merchant sign an agreement to cover all levied fines, fees, refunds etc. etc.,

[QUOTE]
We have concluded that Visa fines in excess of amounts withheld by us from merchant payouts are not probable,



Last edited by meatloaf at Apr 1 2003, 09:53 PM

[slavdogg]

so with all these fines and problems ibill is having
Has anyone seen anychanges as far as CC signups going through ? More or less or the stayed the same ?

whats the overall trend of the whole industry ?
Why are sign ups getting worse and worse ?

[Rolo]

Originally posted by slavdogg@Apr 1 2003, 11:49 PM
so with all these fines and problems ibill is having
Has anyone seen anychanges as far as CC signups going through ? More or less or the stayed the same ?

whats the overall trend of the whole industry ?
Why are sign ups getting worse and worse ?
Signups have been up on our backend, which also include IBill signups... IBill is one of the best when it comes to international signups... Many processors will not accept signups from some countries - however our inhouse tests found IBill to have the least "country based" scrubbing. The recent news from IBill have not effected signups.

Overall signups/recurrings are doing great... well atleast on our backend...