According to Sean Barrie, marketing and communications vice president for ProBilling, his company had been considering a business shift for a long time in response to the greater financial demands that Visa and Mastercard are imposing on processing companies.
Barrie told XBiz that the decision to make the change was swift and came about in-between the Internext show and Martin Luther King Jr. Day.
"We're not in chargeback trouble," Barrie told XBiz. "We were just not willing to put our own money and our client money at risk."
According to Barrie, Probilling made a precautionary decision that it was no longer in the best interest of shareholders and merchants to take the chance of being fined by Visa and Mastercard.
"We just won't accept any kind of credit card fines as a way of doing business," said Barrie. "Most processing companies are being fined constantly, and each time you get fined, you put your merchants at risk."
On Friday of last week, ProBilling issued a statement to all of its clients and shareholders explaining its decision:
"As you well know, these have been challenging times for all online credit card processing companies," the company said in a statement. "Due to the increased scrutiny by the credit card associations we feel that we can no longer offer reliable credit card processing as part of our portfolio of services."
ProBilling officially pulled out of the credit card race starting with MasterCard, which the company stopped processing immediately upon issuing its announcement. As of Jan. 20, the company decided to officially cease processing Visa transactions.
ProBilling made a strong point in its announcement, however, that it is not going out of business. The company will now focus its efforts on check processing, also known as ACH, or 'automatic clearing house.'
In lieu of its dramatic decision to shift its business focus away from credit card processing, ProBilling has extended special ACH rates to its existing client base, which includes a 7 percent rate on SmartCheck and a 10.5 percent rate on DirectCheck.
"It a way of thanking our merchants for staying with us during this time," Barrie told XBiz. "We understand the stress this can cause."
Barrie pressed the point that in many ways what is happening in the adult processing space is similar to what happened with gambling companies when credit card companies starting imposing fines and ratios that simply could not be met. Since that point, ACH is used as the main billing source for the majority of all online gambling companies, according to Barrie.
ProBilling assured its client base that all ProBilling account holder's funds are secure and weekly holdbacks and regular payouts will be dispersed as usual.
"Your account will remain open and accessible at www.proBilling.com," the company stated. "All password management functions, consumer and merchant services will be operating as normal."