In brief

Segpay is a payment intermediary from South Florida that since the summer of 2005 has accepted card payments for subscriptions and digital goods from sites whose payments banks consider risky: such sites have many refunds and disputes. It appeared two and a half years after Visa introduced, for intermediaries of this kind, registration of every client and reporting for every website address, and it made compliance its main product: segregated client accounts, licenses in the UK and Ireland, disclosure of subscription terms. The company is private and is still operating today.

What matters for this story is something else: here the card networks' rules are not a barrier that went up and killed off the weak, but a condition of entry that only grew more expensive over the years.

How it started (the founders)

The founder is Cathy Beardsley, president and CEO; a business figure, she publicly calls herself the founder of Segpay in 2005. Before that, according to a summary of her profiles, from April 2002 to February 2005 she was vice president of marketing and products at InterCept Payment Solutions, the company that bought the iBill payment service in 2002 estimate. Some profiles go further and call her the president of iBill, but InterCept's press release of 2002-03-19 (SEC) names Garrett Bender as president and CEO of iBill, so that wording remains a rumor.

Beardsley herself explains the idea as earning the respect of clients, acquirers, and card brands by doing everything right, and becoming the most responsive, transparent, and compliant facilitator. The original slogan was "You Get Paid Before We Do": by her account, the company was the first to hold client money in separate settlement accounts, and the name of the legal entity, Segregated Payments, means exactly that.

The launch was not American: Segpay writes that it started in June 2005 as an EU IPSP, while the American acquiring agreement and SegPay US came in March 2008. The British legal entity was registered only on 2011-10-27.

Year-by-year timeline

• 2002-03-19: InterCept announces the purchase of iBill; the future founder of Segpay later works at InterCept estimate
• 2002-11-01: Visa introduces the IPSP regime for intermediaries: registration of every client ($750 initially, $375 a year) and reporting by URL; the notice was signed by iBill, CCBill, and Epoch fact
• 2003-10-01: Visa's chargeback threshold in the US is lowered from 2.5% to 1.0%; for international transactions, a 2.0% threshold from 2004-01-01 fact
• 2005-06: Segpay launches as an EU IPSP fact
• 2008-03: SegPay US launches after obtaining an American acquiring agreement fact
• 2011-10-27: the British legal entity Segregated Payments Limited is registered fact
• 2013-03-11: the press reports that Segpay has been registered as an Authorised Payment Institution in the UK (the regulator named in the text is the FSA); search results from the register give the first authorization as 2013-02-21 estimate
• 2018-05-17: the company announces its re-certification as a payment institution in the UK under PSD2; the register shows the status as effective from 2018-04-30, yet the firm already appears on the FCA list as of January 2018 estimate
• 2019-06-20: Visa bulletin on subscriptions and trials: rules from 2020-04-18; the 7-day reminder and the electronic copy of terms for trials worldwide were later moved to 2021-04-17 fact
• 2020-09-11: Segpay's Irish legal entity receives payment institution authorization (Central Bank of Ireland) in response to Brexit fact
• 2021-04-13 / 2021-10-15: Mastercard publishes AN 5196 on the registration of adult merchants; the deadline for acquirers is October 15, 2021 fact
• 2023-05 / 2024-04-01: Visa Integrity Risk Program; the registration fee rises from $500 to $950 per provider, and a fee of $0.10 + 10 bps is added estimate
• 2025-06-01 / 2026-04-01: Visa VAMP: the "excessive" threshold for a merchant is 220 bps, and from April 2026, 150 bps in the US, the EU, Canada, and Asia Pacific

Lesser-known but significant facts

1. The British legal entity is six years younger than the company. The company launched in 2005, the legal entity in the UK was registered in October 2011, and the first British authorization came in early 2013. In its first years Segpay operated through European acquiring as an IPSP, not as a licensed institution.
2. The name of the legal entity is a program. "Segregated Payments" and the slogan "You Get Paid Before We Do" sold one thing: client money is kept separate from the company's money. According to the founder, today this is a regulatory requirement for facilitators.
3. The subscription rules are older than they seem, and Europe lived by them before the rest of the world. Visa writes that rules for "negative option" merchants have existed since 2011; a reminder seven days before the charge after a trial was already in force in Europe before 2019, and the global deadline for the reminder and the electronic copy of terms was moved from 2020-04-18 to 2021-04-17 (the document gives no reason); the other requirements stayed at 2020-04-18.
4. Segpay dates the rules from its own start. A column from 2023–2024 says that registering every merchant with Visa has been standard procedure in adult since 2005; according to the text of the billers' notice, the rule has been in force since 2002-11-01.
5. The same $500 to Visa in 2002 and 2023, then $950. In 2002, of the $750 initial fee Visa received $500 (per company); in 2023, according to Segpay's column, the initial fee was $500, and from 2024-04-01 it is $950 per provider. What happened between 2002 and 2023 is not in the sources, and the unit of the fee changed, so the comparison is an estimate.

Legend vs. the record

• Legend: Regulation kills niche players. The record: the IPSP regime (2002), the 1.0% threshold (2003), and reporting by URL were in force from the very start of the era. Of the three signatories of the 2002 notice, iBill changed owners three times in 2002–2005, lost its only sponsor bank in 2004, and by 2007 faced about 116 lawsuits for ≈$52.4 million; its owner named as the cause the lawsuits after the break with the bank, not the rules themselves; Epoch lost an antitrust lawsuit against MasterCard in 2006 and, according to available data, is still operating estimate. Segpay, which came later, made the rules part of its product: registration, segregated accounts, licenses. Verdict: refuted as far as "kills" goes. The rules remove players without risk management and without capital for compliance; the niche survived, but the price of entry keeps rising: fees from 2002 to 2024, and thresholds tightened to 150 bps in 2026.
• Legend: A subscription in high-risk is impossible without deception. The record: Visa explicitly allows subscriptions and trials and describes how to run them: explicit consent at enrollment, an email with the terms, a reminder seven days before the charge, cancellation as easy as unsubscribing from a mailing list, and a "trial" descriptor. Segpay claims the same practices: terms on the payment page, a cancellation link on every receipt, and a reminder before the charge for subscriptions of 90 days or longer. The network protects an honest merchant in a dispute if it proves consent and notification (Condition 13.5). Verdict: refuted as "impossible"; it is true that without disclosure of the terms a subscription becomes a source of disputes. The company's claims that it has never had elevated chargebacks could not be verified rumor.
• Legend: Segpay had licenses from the very beginning. The record: a start in June 2005 as an EU IPSP; the British legal entity on 2011-10-27; the first British authorization in early 2013 (press of 2013-03-11; the date 2013-02-21 from search results is an estimate), re-authorization under PSD2 in 2018; Ireland on 2020-09-11, after Brexit. The founder's statement that the company was among the first to receive an API license in the UK remains her own assessment. Verdict: refuted; the licenses accumulated over fifteen years, following the rules, and Brexit added a second one.
• Legend: Segpay invented segregated client accounts (this is how the company presents itself). The record: the self-description as the first among facilitators; in a 2015 release the company calls itself the only online biller with segregated payments; there is no independent confirmation, and today the requirement is set by regulators (according to the founder). Verdict: estimate; being first is not confirmed, and the fact that this became the norm is stated by the company itself.

The first growth lever

Segpay's lever is neither price nor traffic but predictability for banks and networks: the company arrives in 2005 with a ready answer to what Visa and acquirers demand (registration, segregated client money, reporting) and sells it to merchants as protection of their payouts. Growth came through clients: the company calls its clients its strongest sales channel, and each one has its own sales manager and technical specialist.

The figures are sparse. In 2022, 600+ merchants; the payment facilitator's volume grew by 17% in the second half of 2023. Rates are not published; aggregator figures (14.5% at small volumes, a 5% reserve for six months) are a rumor. The only confirmed price is the network fees: $950 (Visa) and $500 (Mastercard) a year for registering a merchant in the adult, dating, and nutraceutical categories. Our assessment estimate: a niche processor has enough margin for a compliance team because the rules cut off those who would like to replace it.

The paired story

The pair is Epoch (Paycom), a processor in the same market that started even before the IPSP rules.

• One regime, different entry points. Epoch (its site says it has been around since 1996) built its business before the IPSP rules and signed the 2002 notice together with CCBill and iBill; Segpay launched in 2005, when the regime was already in force.
• Litigation versus integration. In 2003–2006 Epoch sued MasterCard and lost in the Second Circuit on 2006-10-27; Segpay invested in compliance and licenses: the UK, then Ireland.
• Jurisdictions. Epoch had a chain of American and offshore banks with refusals and delayed payouts (according to its own lawsuit, the plaintiff's version); Segpay has a European license and several sponsor banks named in its legal footer.
• Shared people and deals. The link is iBill and InterCept: iBill signed the 2002 notice together with Epoch, and the future founder of Segpay worked at InterCept estimate.
• Segpay's licenses. 2005: start as an EU IPSP; 2013: the first British authorization; 2018: re-authorization under PSD2; 2020: Ireland. For Epoch, the sources show no payment institution licenses.

Parallels today (projects from the catalog)

• DisputeStack (disputestack): evidence collection for chargeback disputes on Stripe; Segpay builds the same thing at the facilitator level (Visa RDR, Verifi, Ethoca, disclosure of subscription terms). view this project's dossier →
• Paid subscription platform for creators (spencer-patterson-paywall-platform): an alternative to Patreon, subscription billing for creators of paid communities. Segpay sells the same recurring billing, but with disclosure of terms and cancellation on every receipt, without which a subscription turns into disputes. view this project's dossier →

What a builder can take from this in 2026

• Read the network's bulletin, not a retelling. Visa's subscription requirements (consent, an email with the terms, a 7-day reminder, one-step cancellation, a "trial" descriptor) are in a public PDF; check your checkout against them before launch.
• Track thresholds at the acquirer level, not only your own. VAMP measures the ratio at the acquirer: 70 bps is "excessive"; for a merchant it is 220 bps, and from April 2026, 150 bps. Set alerts at 60% of the threshold and agree with your processor on who pays the fine.
• Sell compliance as a product. Segpay does not sell card acceptance as such; it sells the fact that client money is kept separately and subscription terms are visible on every receipt. Describe how your payment or SaaS product reduces the acquirer's risk.
• Budget for rising network fees. The registration fee rose from $500 to $950 per provider, and the VIRP program brought a fee of $0.10 + 10 bps on certain categories estimate; revisit your unit economics with every change.
• Licenses take years to accumulate. If you are entering the EU and the UK, budget for hiring and time: the founder names building a team that meets the regulator's requirements as the main obstacle.

Discrepancies and what we could not verify

• Beardsley's position at iBill: profiles say she was iBill's president, while the iBill dossier names another person as president; we go with "InterCept Payment Solutions, 2002–2005" estimate.
• The purchase price of iBill: a search summary gives $112 million, while the iBill dossier, based on the 10-Q, gives about $104 million for the assets; the amount is not used in this dossier.
• The exact date of the first FCA authorization (2013-02-21) is taken from search results for the register; the register page itself could not be opened; the press dates the registration to 2013-03-11 estimate.
• The date 2018-04-30 in the register: this is not the start of the license (the firm is on the FCA list as of January 2018) but, probably, the record of the re-authorization under PSD2 estimate.
• Visa's subscription rules: in the bulletin all requirements apply from 2020-04-18; only the reminder and the electronic copy of terms for trials were moved to 2021-04-17, according to the acquiring bank's version.
• Segpay's first client (2005) was not found in the 2015 release and has been removed from the text rumor.
• The month VIRP launched: the company's column names both April and May 2023.
• IPSP registration since 2005 according to Segpay, versus 2002-11-01 in the billers' notice.
• Rates and reserve from aggregators are a rumor.
• The 2023–2024 fee amounts are given according to the company's column, not the Visa bulletin estimate.
• Not obtained: the FCA and Central Bank of Ireland register pages directly, the 2011 Visa bulletin on subscriptions, Mastercard's subscription rules, the name of the acquirer in 2005–2008, and volumes by year.
• The company's claims of a low chargeback rate and of being the first among facilitators have not been independently confirmed.
• Access to primary sources: the Segpay site returns 403; the blog and FAQ are available through archived snapshots, which may have differed from the original publications estimate.

Sources (primary first)

Primary:

• Interview with the founder, ~2022 (snapshot 2024-09-17) — https://segpay.com/blog/interview-with-the-founder-of-segpay-cathy-beardsley/
• Interview with the founder, 2024 (snapshot 2024-12-06) — https://segpay.com/blog/cathy-beardsley-on-segpays-global-growth/
• Visa, bulletin AI09067, 2019-06-20 — https://usa.visa.com/dam/VCOM/global/support-legal/documents/subscription-merchants-visa-public.pdf
• Notice from CCBill, Epoch / Paycom, and iBill on Visa's rules, 2002 — https://www.webhostingtalk.com/showthread.php?t=78510
• Mastercard AN 5196, 2021-04-13 — https://segpay.com/MC_RevisedStandardsForNewSpecialtyMerchantRegistrationRequirementsForAdultContentMerchants.pdf
• Visa VAMP fact sheet, 2025 — https://corporate.visa.com/content/dam/VCOM/corporate/visa-perspectives/security-and-trust/documents/visa-acquirer-monitoring-program-fact-sheet-2025.pdf
• 8-K/A Penthouse International, 2004-04-08 — https://www.sec.gov/Archives/edgar/data/1164123/0000930413-04-001729.txt
• Companies House, Segregated Payments Limited — https://find-and-update.company-information.service.gov.uk/company/07825300
• Segpay, re-certification in the UK, 2018-05-17 (snapshot 2024-11-01) — https://segpay.com/blog/segpay-re-authorized-as-payment-institution-in-uk/
• FCA, list of Authorised Payment Institutions (January 2018) — https://www.fca.org.uk/publication/foi/foi5424-information-provided.pdf
• Segpay, 10 years, 2015 press release — https://www.prnewswire.com/news-releases/segpay-celebrates-10th-year-anniversary-300164033.html
• Segpay, client FAQ (snapshot 2026-05-13) — https://cs.segpay.com/faq/
• Segpay, column on VIRP (snapshot 2024-09-17) — https://segpay.com/blog/understanding-visas-new-pricing-high-risk-tiers/

Secondary:

• J.P. Morgan, a summary of Visa's subscription rules, 2019 and 2020 — https://www.jpmorgan.com/content/dam/jpm/merchant-services/payment-network-updates/documents/visa-subscription-merchant-policy-update-alert-june-2020.pdf
• Fintech Ireland, authorization of Segpay Ireland, 2020 — https://fintechireland.com/news-insights/new-payments-institution-authorised-in-ireland-segpay-september-2020
• The Paypers, Segpay's registration in the UK, 2013-03-11 — https://thepaypers.com/payments/news/segpay-expands-across-the-uk
• Profile of Cathy Beardsley — https://womenpaytechleaders.com/u-s/cathy-beardsley/
• Review aggregators (from search results, rumor) — https://paymentpop.com/merchant-accounts/segpay-reviews/