Internet Billing (iBill) is offering a pair of options to American webmasters waiting for past due payments including a promissory note with interest on monies due or conversion of payment due claims to equity in iBill's new parent, Care Concepts.
These and other matters were addressed in a midweek conference call iBill conducted November 3, where the company continued trying to reassure clients that the company's plans include anything but ceasing operations or stagnating.
"In the middle of this turmoil, our third-party investors analyzed the facts and still made the decision to invest in our business," said Jason Galanis, an advisor to a major Care Concepts shareholder, recapping the conference call for AVNOnline.com. "We hope the market understands we're committed. We're not disappearing. And we do take responsibility. We also believe we have a leadership role.
"We are current today with all our [European Union client] payments," he continued. "U.S. payments are in arrears. We intend for transactions starting November 1 to be on a normal schedule. [Concerning] payments due from the 'turmoil period,' we're offering webmasters a choice: a one-year promissory note with 6 percent interest on their money, with payments to begin in December and regular payments accelerated only by the recovery from First Data of our deposits; or, webmasters, at their discretion, also have the option to convert their claim into equity of Care Concepts at an advantageous price, where they'd participate in growth of both iBill and Penthouse."
While getting past-due monies released for payment is going to depend purely on negotiations between iBill and First Data, Galanis said iBill and Care Concepts alike are optimistic that it will not be a prolonged process.
Galanis said the conference call otherwise addressed iBill's views of the IPSP business as an industry, saying iBill believes that model as a business is becoming riskier thanks to credit card association rules changes and the resulting impact on how many clearing member banks are available.
"We view our role as a risk manager," he said. "We have a nine-year track record of being trusted, and we allowed ourselves and therefore our clients to be put at great risk as a result of the changing IPSP environment. And our intention, as a business, is to restore that confidence that we earned over nine years by offering a variety of new solutions in order to acquire and settle transactions."
The conference call addressed those solutions including the new gkard prepaid stored-value card program, accepted in 130 countries and allowing consumers to load up a secure Visa electronic card through Visa, MasterCard, and Greendot load stations, configured for one-time signups and rebills. iBill has said the experience isn't different from the current iBill signup process, with no need to front-load the card and verify the amount, unlike other stored-value solutions.
Galanis himself reiterated that the stored-value solution – such as pioneered for the Adult industry by ePassporte and Epoch – is likely the wave of the future for the Adult Internet, because the avenues for IPSP processing are ever more limited in the United States.
Two other solutions are iBill Direct and what Galanis called the EU solution. The former involves iBill facilitating and guaranteeing a merchant account where the webmaster himself is the primary merchant, Galanis said, with iBill performing all the functions it historically performed in its Processing Plus product. The EU solution allows European Union-located webmasters to act as an IPSP and provide a merchant account.
"Of the Big Three [Adult Internet-tied payment processors], we're the only one that has all three solutions," he said. "One has a U.S. IPSP and an EU IPSP but no stored value card; the other has the stored value card but no EU account. So, we believe, we're attempting as a business to add flexibility as to how customers can handle transactions, and we're going to price them all differently so customers have more flexibility."
Galanis said iBill's aim is to re-establish and fortify its financial viability as a business and a concurrent commitment to the industry, a point pressed with particular emphasis during the conference call.
"What we described first, we announced iBill and shareholders are committed to iBill paying 100 cents on the dollar to all clients," he said. "What we wanted to communicate to the market, that Care Concepts is also financially viable, including having completed its own round of new capital in October, where the parent completed a $16.5 million placement of capital, with three asset managers that manage an aggregate $4 billion, including $8 million on money placed in our company by our current management – Granite Financial. The other two big investors are Mercator in Los Angeles, and Sandel Asset Management. Mercator [has invested] $400 million and Sandel [has invested] $3.2 billion. And we made an investment, and took Penthouse out of bankruptcy in October, and paid creditors 100 cents on the dollar."
Galanis acknowledged that iBill in "the turmoil period" put clients and other interested parties alike into difficult positions.
"We're regretful for the hardship we've imposed on them," he said. "The message we want to extend to them is that in spite of six out of eleven processors going out of business in the last 18 months, iBill will not be added to that statistic."
The iBill conference call also addressed iBill's now having "access to multiple banks instead of a limited few," and that the company is not pursuing litigation against First Data – whose choice not to renew its arrangement with iBill when their contract expired in October provoked the turmoil buffeting the company and provoking ceaseless speculation on its future – but wants instead to negotiate a viable release schedule of the approximately $15 million in outstanding payout funds the bank is still holding.
iBill had hoped originally to get the monies released and all past due amounts tendered by October 31.
