Hey MSN, does that mean the RegistRAR is banking the money and only applying it when they have to? That seems like a dangerous practise.
CIRA appears to be the one banking funds. A domain registration now appears to be a subscription, albeit one which has a 30-day refund policy.
This creates a inordinate cash flow burden on smaller registrars due to the need to carry enough deposit with CIRA to cover every one of the renewing domains on a daily basis, plus TBR and new registrations. To add to the mix, CIRA debits the same deposit account for the annual fee instead of a separate invoice.
Look at it this way:
If a registrar has 7300 domains under management they have on average 20 domain registrations expiring every day. At $8.50 each, they need to pay CIRA $170 per day to cover automatic renewals, regardless of whether or not the registrant has actually renewed the registrations.
Naturally, registrations are not so well distributed: they tend to be 'lumpy' with big gobs of money required to cover Wednesdays when new TBRs are registered and TBRs from prior years hit renewal.
Now imagine a registrar with those 7300 registrations under management and only five domains on each 'normal' day and 110 combined TBRs and renewals once a week. The 'normal' days will see CIRA draw $42.50 and Wednesdays $935 from the account.
Theoretically a registrar in this situation might have to give CIRA around $5100 before getting the first penny from their registrants.
And since CIRA debits fees from the same account, the .ca registrar could effectively have their balance disappear overnight if CIRA wants its $1000 registrar renewal and decides to withdraw funds from the registrar, leaving the registrar high and dry since it would not be able to renew or create registrations without sufficient funds in that account.
