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ACCOUNTS RECEIVABLE AND ADVANCES TO AGGREGATORS | 12 Months Ended
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Dec. 31, 2013
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] |
Other Current Assets [Text Block] | NOTE 7. ACCOUNTS RECEIVABLE AND ADVANCES TO AGGREGATORS Accounts receivable consist of amounts due from processors and Russian mobile operators. Total accounts receivable amounted to $10,619,289 at December 31, 2013, consisting primarily of $9,118,849 in amounts due from Russian mobile operators and $1,498,620 of TOT Payments, Inc. merchant receivables. The $1,498,620 of merchant receivables is net of a $2,111,303 allowance for amounts due from First Data as the result of a lawsuit (See Note 13). There were additional charges to bad debts for $423,179 for ACH rejects in the normal course of operations and a charge for various receivables from Merchants for $50,000. The cycle of the TOT Payments processing business begins when TOT Payments charges merchants for processing services, based on a variable percentage of the dollar amount of each transaction and in some instances, additional fees are charged for each transaction. Merchant customers may also be charged miscellaneous fees, including statement fees, annual fees, monthly minimum fees, fees for handling chargebacks, gateway fees, and fees for other miscellaneous service. The cycle of the Russian TOT Money mobile payment processing business begins with TOT Money paying aggregators for traffic to be provided to mobile operators. Aggregators provide transactions to TOT Money for processing and billing to the mobile operators TOT Money has contracts with. The mobile operator contracts and associated receivables are with the three largest mobile telecommunications companies in Russia, Mobile TeleSystems OJSC, MegaFon OJSC and OJSC VimpelCom. The Company does not reserve for these accounts receivable given our payment history with each mobile operator and the size of each mobile operator company. The collection cycle with mobile operators is approximately 45 days. As discussed in Note 6, during the second quarter of 2013, the Company concluded that a significant amount of aggregator advances would not be recoverable in the form of future business from the aggregators. The Company had previously recorded loss provisions of approximately $6,700,000 in prior quarters and during 2012. In June of 2013, TOT Money entered into a new agreement with the general director, pursuant to which he was relieved of his position as general director and appointed as commercial director with responsibility to develop and promote new business. A new general director of TOT Money was appointed to manage the business and operations. New controls were implemented to pre-verify all payments to aggregators with the mobile operators to ensure the traffic is validated. Effective July 1, 2013, the TOT Money changed its policy where it no longer advances more than 1 week of funds to aggregators for future processing volume. Additionally, all traffic in excess of 1 weeks advance is verified with the mobile operator before payments are approved to aggregators. Advances to aggregators total $1,109,538 as of December 31, 2013. The Company monitors all accounts receivable, notes receivable and transactions with mobile operators and aggregators on a quarterly basis to ensure collectability and the adequacy of loss provisions. Considerations include payment history, business volume history, financial statements of borrower, projections of borrower and other standard credit review documentation. Management uses its best judgment to adequately reserve for future losses after all available information is reviewed.

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