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Old 10-08-2002, 05:15 PM   #1
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Default Is paypal going to start charging $750 app. fee?

I recently got a disturbing email from iBill and wanted to see if anyone else has information on this. Basically what the email stated is that iBill was going to begin to charge a $750.00 registration fee and $375.00 per year thereafter.

I called iBill to inquire and they told me that beginning in November, Visa and MC are going to require all Internet Payment Service Providers (IPSPs, including those like paypal and clickbank) to pass through these types of fees to their small merchants.

If this is true, we should revolt. I think it will put tens of thousands of small merchants out of business. It would be a shame. Does anyone else here know more about this? Here's a copy of the email I received...

****************Start of Email******************
Dear iBill Client,

I would like to update you on several new Visa and MasterCard regulations
that will affect the way iBill and all other Internet Payment Service
Providers (IPSP) and their clients conduct business. Both credit card
associations now will require a unique set of operating guidelines that must
be implemented by November 1st. Under new rules adopted by Visa, iBill will
be considered an IPSP that provides services to Sponsored Merchants (iBill
clients). In contrast, MasterCard will consider iBill the merchant that
supplies the goods and services of its clients.

It is our mutual responsibility to ensure that we fully comply with all
regulations implemented by the card associations. iBill is committed to
seamlessly implementing the new regulations while retaining a business model
that is good for our company and our clients. Below is a summary of the
requirements for Visa and MasterCard that we must implement by November 1st:

* 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.
* Sponsored Merchants must be approved by Visa before we can
begin processing Visa transactions.
* The pay page must present the client's country of domicile.
* iBill must provide Visa with monthly sales, chargeback and
refund data on each Sponsored Merchant for Visa's review. Sponsored
Merchants not performing to Visa standards can be terminated directly by
* The credit card descriptors must pass iBill's name, as well
as the Sponsored Merchants name. Sponsored Merchants will have 10
characters to identify their name ie: iBillCS.com*Merchant Name
* iBill pay pages must include the following language: "iBill
is a designated payment processor for Merchant Name. iBillCS.com*Merchant
Name will appear on your cardholder statement."
* Sponsored Merchants must display their privacy policy on
their site. iBill will provide a web resource to assist clients in adopting
a privacy policy.
* Sponsored Merchants will need to update each of their master
accounts client email address with a single email address. This will help
iBill create a single identification number for your business.

* The join page that resides on our client's server can no
longer negotiate any aspect of the transaction. iBill will provide all
clients with a standard join page format that our compliance group will
approve for account activation.
* Selection of specific purchase options for goods and
services will occur on a join page on iBill's servers.
* iBill must allow for consumers to make purchases from
multiple iBill client sites. iBill will support a consumer portal and all
clients will be required to register their sites on the portal.
* At the time of checkout, iBill must offer the consumer the
ability to make additional purchases. iBill receipts will now contain a
link to this portal for additional consumer purchases.
* MasterCard logos cannot be displayed on the client's

October will be a month of change for all of us, though we expect the
transition should be a relatively smooth process. Following is a timetable
for preparing for the November 1st deadline:

* By October 14th, iBill will begin the Visa registration and
MasterCard portal sign-up process.
* By month end, clients will need to have a privacy policy up
on their site and have implemented the new MasterCard sign-up process.

I will provide you with additional updates on these initiatives throughout
the month. Rest assured that your iBill account manager or our client
service team will be available at every step of this process if you have any
additional questions or need support in making these changes. Thank you in
advance for helping us to ensure a successful implementation of these new


Garrett M. Bender

****************End of Email******************
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Old 10-08-2002, 05:22 PM   #2
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first time hearing about it and yup your right we should revolt
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Old 10-08-2002, 05:52 PM   #3
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From what I have heard, places like PayPal, ClickBank, Revecom, etc. are not affected by this and will not be charging such fees. The ONLY place I have seen this info coming from is iBill.
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Old 10-08-2002, 06:59 PM   #4
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Default I think you're right

I think (and hope) you're right. I had sent off a few inquiries to paypal and globill, just to check. Globill has written back and told me that it is business as usual for them.

That refutes what the people at iBill told me so hopefully it is not going to affect all IPSPs.
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Old 10-08-2002, 10:33 PM   #5
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There was much information about this in a recent thread.


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Old 10-08-2002, 11:18 PM   #6
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Default Thanks for the new thread

I read through the other thread and the references there. It looks like Paypal is staying away from the subject. Isn't there some type of court case happening? Maybe that's why they are so mums on the topic.

I recently attended a forum where one of the panelists was from a major credit card processor and when asked about Paypal, he said he couldn't comment as there was some type of litigation happening (paraphrased as I remember his comments).

Anyway, I hope that Paypal will come out ok on this all. There certainly are a nice solution for hundreds of thousands of small online businesses. I personally see this as kind of an assault on small business by the big guys. They're trying to nip this growing industry in the bud, before it gets to big. Heck, right now, it's minuscle compared to the size of VISA / MC (It's a pimple on their nose, probably not even 1% of the size in revenues, but probably growing at a much larger percent than the mainstream processing business).

I'm sorry I didn't notice the other thread. Maybe we can move these posts there. In either event, I think it's an important issue to all small businesses and I hope we'll see more information from other members as we learn more about the direction on this issue.
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Old 10-09-2002, 12:43 AM   #7
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I agree we should keep an eye on it and any implications involved. For a lot of us, such policies showing up in other procesors could be disastrous. I'm not sure what percentage of my sales at ClickBank and PayPal are from Visa, but I know that about $5,400 out of $24,000 in sales at my other processor are via Visa (I sell mostly to business customers, so American Express is the most popular by far) this year. A large fee like that at any one of my processors could cause problems. On one hand, that is a big chunk of money to give up if I don't process Visa (although I'm sure many folks have a MC, Discover, or AmEx). If I do though, it takes a large chunk of my profit away and could potentially make it unprofitable. I'm sure many other small business would have the same dilemma.

Like I said, I've looked just about everywhere and have been unable to find any more info than what iBill posted. I'm crossing my fingers and hoping it won't affect me
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Old 10-09-2002, 07:23 AM   #8
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I feel all of these changes are good ones. Personally, I believe a big reason behind this change was to better document which sites are using their cards. One article that shows these issues is this one: http://www.redherring.com/insider/2002/0118/1249.html (Scroll down to "OFFSHORE CREDITS" for the more related parts). Obviously, the processors who handle mostly adult sites would be targetted for this and that is what we see now.

I don't doubt we'll see more regulation of other payment processors in the future. In fact, it might actually be a good thing. Accepting credit cards should not be something done on the spur of the moment.
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Old 10-09-2002, 08:36 AM   #9
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I don't use an online CC merchant account. I use one through my bank. I process the orders manually through my merchant terminal rather than go through a gateway. Why? I save on fee costs.

But when I went to my bank to set up my account, I sat down with a banker and showed them what I was doing. I filled out applications and paid the application fees for American Express and Discover. Visa and Mastercard were part of the application process at the time that came with the merchant terminal. Somehow I paid a fee (the fees weren't much!) and after a check with my business credit, my personal credit...I was given merchant status with the CCs.

I know I could have gone through the online process but I wanted the human element in my transactions. After 3 years of doing business with CC's this way, I know I made the right decision when I hear the horror stories about online CC's transactions for merchants.

I think we, as merchants, have a responsibility to make sure we are using our status properly and that the owners of the cards are protected. Chargebacks cost everyone in the long run...and no one wins when security is breeched.

Last edited by Kathy; 10-09-2002 at 08:37 AM.
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Old 10-09-2002, 08:54 PM   #10
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Default I got a few responses - I don't see a problem


Just a quick follow-up. Since I rang some alarms, I suppose I should calm them too. I've spoken to a number of IPSPs now including Globill, Paysystems, ClickBank, and just received a call from Paypal. I've been assured from all these sources that if you are not in the adult content business there is nothing to worry about and that extra fees are not imminent.

Although I originally liked iBill when I met them at Internet World, I have to say that I don't think they have been honest (with me) on this issue in the sense that when I spoke with them on the phone, they gave no indication that this was an adult issue. The impression they gave me was that it affected all IPSPs period. I didn't know until now, but the impression I have received since is that they have built their business in the adult area (no offense to anyone, I just didn't know it). I think that's why they had to be pro-active and make the announcement. Thanks for the feedback.
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Old 10-10-2002, 04:31 AM   #11
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IBill, CCBill, and EPOCH are just lying when they say that everybody should pay the fee.

I can tell you that a massive exodus to Globill and other IPSPs is currently going on. See the other thread for explanation.

The Big 3 announced the Visa issue at the very latest to force big webmasters to stay with them. When you have a lot of rebills, it's hard to change of IPSPs.

BTW, most of the IPSPs are doing their money thanks to the adult industry.

As far as chargebacks are concerned I don't even remember when my last charge back occured with ClickBank. It should be more than one year ago !! So I don't see why Visa would have a problem with my business.
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