mmm... not sure about that, cfb. I deal with NatWest and their transaction fees are based on a percentage so it doesn't matter whether there are lots of small payments or one big payment, the percentage the FTO pays is the same. The only exceptions to that are Switch transactions, where the fee is a flat fee per transaction, and American Express who take an arm and a leg (which is why we don't take AMEX any more).
I do like the comparison between FTOs and solicitors, who would you trust more? 'Held in trust' has a very specific meaning and this is hardly it. What you are suggesting is that the FTO rogers the clients credit card for a large sum, then holds on to the money while the client flies it off. I can see it benefits the FTO cash flow, I'm struggling to see a benefit to the client.