IBill's Motion Against First Data Denied

Gretchen Gallen
NEW YORK – As beleaguered payment processor iBill continues to process payments amid looming uncertainty, Judge Orin Kitzes of the New York State Unified Supreme Court issued a motion denying the company's request for a preliminary injunction against credit card processor First Data Merchant Services Corp.

Deerfield Beach, Fla.-based iBill filed a complaint against First Data on Sept. 17. alleging that the company reneged on its promise to help iBill transition its accounts to another credit card processor after the expiration of a contract dating back to 1998.

First Data issued a statement Wednesday stating that its decision to terminate its relationship with iBill was based on wanting to move away from dealings with the adult entertainment industry.

After the agreement between the two companies expired on Sept. 15, iBill claimed that First Data's breach of contract threatened irreparable harm to iBill and its customer base, including insurmountable daily financial losses and the possibility of going out of business.

First Data claims otherwise, stating that it had provided iBill with multiple notices warning that once its contractual obligations expired, it would no longer provide services.

IBill had originally planned to transition its more than 4,000 Internet clients to New York-based Merrick Bank by November.

"First Data regularly evaluates its lines of business to ensure they are a good fit for the company," First Data said. "We have determined that processing payments of the adult entertainment marketplace is inconsistent with our core values."

First Data is officially no longer processing payments for iBill, the company added.

IBill stated in its complaint to the court that without First Data's continued services it could go out of business by as early as next week.

IBill has not said yet whether it intends to appeal the decision.

According to the law clerk for Judge Kitzes, the written decision will be issued within the next few weeks.

Pompano Beach, Fla.-based Care Concepts I, the majority owner of iBill, was not available for comment.