Almost a week after it was jolted by the loss of First Data Bank as its payment processor, Internet Billing Company (iBill) said they have a deal to continue processing effective today.
"[We have] entered into a new processing agreement with a domestic association-registered party," iBill senior vice president Cathy Beardsley told AVNOnline.com September 27. "The new relationship involves processing transactions through a domestic acquirer and settlement bank. We are processing today."
Beardsley also said iBill is working to resolve past-due payments to adult Webmasters after First Data Bank's contract with iBill expired earlier this month. Late last week, the New York State Supreme Court rejected iBill's claim that First Data had agreed to help the company while it transitioned to its new processing bank.
"This," Beardsley said of resolving the past due payments, "is our number one priority." She didn't speculate on just how long those resolutions would take, but assured that they would be paid.
Beardsley also declined to name iBill's new processing bank. "Due to confidentiality agreements," she said, "we cannot disclose our new bank or processor." The company has been expected to begin work with its new processing bank November 1.
Though iBill may not be able to confirm it, Forbes.com said September 27 that the IPSP’s new processing bank is Merrick Bank, a Long Island-based bank with assets of $500 million, whose parent company, credit servicer CardWork, is based in Utah and partly owned by a fund under the control of bond trading legend Lewis Ranieri, immortalized by the film Liar's Poker and now chairman of Computer Associates.
"It turns out Merrick, which says it 'believes in bettering the community in which it operates,' knows a thing or two about porn," Forbes.com said. "The company is already processing credit cards for CCBill, a big aggregator like iBill of credit card purchases for Internet porn. CCBill handles sites that include Soundpunishment.com, GothicSluts.com, and Threepillows.com."
The news also came three days after Care Concepts delayed closing on its buyout of iBill from Penthouse International, over a notice the American Stock Exchange would de-list Care Concepts common stock until questions were answered related to the iBill purchase.
Care Concepts insisted, however, that they had no plans to renege on buying iBill. The company said that if the impasse isn't resolved and the AMEX doesn't approve the iBill buy completion by January 21, 2005, Care Concepts would close the deal anyway, withdraw from AMEX, and look to relist Care Concept stock on another trading exchange.
Last week, after iBill lost its bid to compel First Data's transition continuation, a few adult Internet players told AVNOnline.com they believed iBill might have a contingency plan just in case. "I think I would be very surprised if they didn't have a backup strategy to hold them over between now and October, which is when the new bank contract comes into play," said Al Case, chief operating officer of DuoCash, which signed a deal with iBill earlier this month to let iBill client merchants accept prepaid telephone cards as a credit card alternative.
Others believed there was a chance for some iBill clients or sponsors dropping considerably because they used iBill for a large enough portion of their business. "Our hope is that iBill will be okay, and that this is a temporary situation," CCBill executive vice president Tom Fisher told AVNOnline.com after the New York Supreme Court ruling. "Obviously, when a third party processor runs into difficulty, the clients of that processor start looking for other options for running their transactions."
Meanwhile, iBill national accounts manager Howard Goldberg issued a statement thanking all in the Adult webmaster community who've shown iBill support and Adult Digital Media in particular, for ADM offering iBill clients two months of free content to help get them through the iBill situation. ADM made the offer September 23.
"It is because of people like you that iBill, and the Adult industry in general can continue to smile in the face of adversity," Goldberg said. "We urge all webmasters to do business with the people who operate in the best interest of the Adult industry in mind.”
