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10/17/2004: "Sunday"
Just a quick note to let you all know I am still alive. After the fiasco on Wednesday with the cops shutting me down and all (details later) it kinda took the wind outta my sails. Combined with all the trouble we are having with I-Bill, our credit card processing company, I am just frustrated with everything.
For details on the I-Bill problems, none of which currently will effect my members, on new sign ups and store purchases, see the "extended entry" text (it's an article on the subject) located at the end of this entry. (Click on the purple "more".) In a nutshell, I have no new CC or store processing and my funds due as well as 6 months of reserves are being held and not paid. Come Monday everything is supposed to be together with either I-Bill or the new processing company but in the meantime, my site, which is my main support system for life and paying bills - is not generating any income.
Onto happier things...the shoot went well on Wednesday despite all the problems and Taste Her Ass is wrapped. I'll try to get some pictures, etc up later tonight. Julie Night came over Thursday to shoot some stuff for her website - due to launch as soon as this I-Bill crap gets sorted out - I ran camera, our friend Kari took stills and Bryn did some very naughty stuff to Julie that she had been wanting to shoot for a long time, including some play-piercing and some bondage/ass play. (Sneek peek pictures later too...) Afterwards the three of them joined me on Kylie Live for some gereral craziness. It turned out to be a hysterical show!
Friday was errand day, and apparantly bad-luck day (everything went wrong) followed by dinner with the Platinum X family at a very mediocre restauant. Bryn and I finally called it quits, got some lo-carb ice-cream and came home to hide and watch a movie (The Last Samurai) where it was quiet and safe. Saturday saw alot of working in front of the computer, and later some very peaceful moments sitting watching, and smelling, the rain. I so rarely rains in California... Watched a few episodes of Millenium to wrap the day up.
Now it is Sunday, I spent the morning wrapping up the loose ends on my paperwork for Taste Her Ass and at 3pm director/photographer Red Ezra will be showing up, along with a makeup artist and bondage model Jewell Marceu to shoot content with me and Jewell. It should be really cool, Red is an amazing potographer (his website is www.redezra.com - it should be up, he was with I-Bill too, unfortunately) and Emma, this chick who is amazing with rope bondage, is coming to tie us up.
Guess I had better go get ready to shoot. :)
iBill Financial Problem Hurting Lots of Models
iBill, one of the largest providers of payment services in the adult industry, is currently unable to pay its clients. A lot of glamour models use iBill to handle their membership payments, and depend on the twice-per-month payouts they receive from iBill to support themselves and pay the costs associated with running their sites. So in other words, a lot of models are not receiving the equivalent of their paychecks if they worked a normal job. iBill says it is working on the problem by trying to secure other funds, and hopes to be caught up by the end of October.
The trouble began September 15, when iBill was several days late making payments (which they eventually made), but it really escalated September 22 when they were supposed to make affiliate payments, and then on October 1 when models and webmasters around the world did not get their funds. To date, iBill has still not paid its clients for anything collected from consumers (members) in September.
iBill, which reportedly did $330 million in adult billings last year, says the problem stems from First Data Merchant Services (FDMS). FDMS is the largest financial transaction company in the world (they own Western Union and Telecheck, among others), and they provide the funding for the vast majority of credit card transactions done in the United States today (for both adult and non-adult companies). When FDMS purchased Card Service International (CSI) recently, one of their first orders of business last Spring was to get rid of the adult sites using CSI for processing. CSI still handles some "adult" items, but there can't be any nudity on the web site and you can't sell anything digital - it must be a physical product.
FDMS charges iBill between 4% and 6% to run a credit card transaction. In return, iBill charges its clients (mostly models and adult sites) anywhere on average of 13% to 15% of every sale. The 7-11% difference is iBill's contribution to its overhead and profit. In addition, iBill holds 10% of every dollar as a "reserve" in case the model or web site closes down or doesn't update, or has lots of stolen credit cards used to purchase memberships and lots of people complain to their credit card company seeking a refund, or what is called in the industry a chargeback (every chargeback costs the model or web site between $15 and $30 as a fee too, sort of like the fee a bank charges if a check bounces).
iBill says FDMS has refused to extend its relationship with iBill, and is holding $15 million of iBill transactions for its own security. As a result, iBill says it is therefore unable to pay the models. iBill has set up an alternative arrangement with Merrick Bank, which specializes in high-risk consumer accounts. But all of iBill's clients must now re-apply and re-qualify with the new bank directly in order to accept Visa, which accounts for about 70% of all sales online. This creates a problem, as many models and web sites will not be able to qualify due to poor credit, lack of creditworthiness, or short business history. In addition, they will be required to pay a $1,500.00 fee before they can accept Visa cards - a tough amount to swallow for many small businesses.
It will be interesting to see how many model and adult sites end up out of business as a result of this. Some have already switched to iBill's main competitor, CC Bill, but they too use Merrick Bank for their backend processing. With iBill switching to Merrick, there will be a lot of eggs in one basket. Should Merrick ever pull out of adult processing, there will be a lot of models and webmasters out of work, or they will have to try to get set-up with a company like Jettis, which uses Humboldt Bank for its processing backend, or perhaps even Paycom.
There are a couple other banks in the United States that handle adult processing, but they generally shy away from the smaller accounts models and most adult web sites have (the average model site only processes about $4,000 per month in credit card charges). These banks are the ones used by larger companies like Infinity Studios (Mystique and Sirens), Playboy, and the like. They have minimum processing amounts per month (ex: $100,000.00), and strict chargeback rules (must be less than 0.5% - one half of one percent). Some adult companies have even gone so far as to start processing their credit card transactions outside of the United States (Israel, Panama, and St Kitts are popular places for offshore processing). The fees are a little higher than in the USA, and there is usually a delay in receiving settlements, but regulation is much looser.
