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Here is what IBill did:
Each Sponsored Merchant must complete a registration form that iBill will submit to Visa on their behalf.
Visa and our processor will require an initial registration fee of $750; $500 will be paid to Visa and $250 to our processor.
Visa and our processor will require an annual registration fee of $375; $250 will be paid to Visa and $125 to our processor.,br>
Sponsored Merchants must be approved by Visa before we can begin processing Visa transactions.
But now our sales have grown and seems like merchant accounts are now much cheaper... so perhaps we will have to set one up...
These new fees on top of 15% cut and 10% witholding is a rip off!
So merchant account is the way to go?
Could be interesting... Will hostcharge, and others fall out of favor soon too?
iBill's email about new regulations should scare anyone in this situation...sadly, many have no other choice. Who's to say after you pay the $750 one-time extortion fee and $375 annual extortion fee that they won't just terminate you because you don't meet the standards they set...the standards they don't even disclose?!?!?! If your charge-back rate is too high...you're gone. If your volume isn't high enough...poof, good-bye $750. If your refund ratio is too high...see ya later alligator.
Visa stands to make millions from this move and while it's not all economical, it is defended as a way to reduce charge-backs and reduce customer confusion. IMHO, an adult website customer is usually confused because he doesn't want to admit to the charge..."gee, what could that be? Hmmm, better take it off just to be safe."
I have 2 merchant accounts for two separate businesses and I would never contemplate using a third party biller if I didn't have to. You lose 25% off the top and while 10% comes back six months down the road, it's operating capital you need. In my two accounts I lose 2.3% and .30 off the top...no reserve. Now that's smart money. On a $100 sale I keep $97.40 instead of $75.00. That's a huge difference.
Sorry to blather on, I just think this is shameful. Anyone with the means should absolutely get their own merchant account...believe me, after this announcement it won't be hard to find companies willing to work with you.
Here's to better and smarter e-commerce!
Ibill has the option to not pay the $750 and only except mastercard. I did learn that 80% of their sales are from visa cards. Something to think about