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I don't agree with the Rick or Stocktrader23's analysis.
IBill will be taking their recurring and the new joins to Merrick. This isnt a situation where program owners stop running transactions, but merely have moved them. VISA/MC track site owners on an individual basis and so long as they keep their ratios in balance at Merrick, VISA is not likely to say, Oh I see you have 100 chargebacks on zero new transactions at FDR but no chargebacks on 15,000 transactions at Merrick...you deserve a fine. That doesnt make sense. VISA deals with companies moving to different banks all the time. If this analysis were correct, no one could ever change their merchant account.
11 million is a huge amount of money considering iBill was well under 1% chargebacks. That amounts to $240,000 in chargebacks on $24,000 million assuming they were right at 1% for the month after they leave. FDR is going to be releasing a large portion of that money to iBill.....there is just no way they are going to be able to keep that money and take the money from the new joins that are happening right now as well. Dont forget that this money is not one lump sum that has one payable date. This is a rolling reserve that has dates for release. IBill will get past individual dates and monies will be flowing back to them, but its not like a windfall as they will be paying to a new reserve at Merrick.
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