New Important IRS 1099-K Merchant Information
Posted by: Curtis Stevens on March 19th, 2011

1099-KThe Housing Assistance Tax Act of 2008 included an IRS section called 6050W, which requires credit card processors to start reporting merchant’s gross sales beginning in January 2012 for the 2011 calendar year.  The reported gross income will not be adjusted for credits, chargebacks, returns, fees & reserves.  This reporting requirement includes an annual filing on a new form called 1099-K.  Part of the requirement is processors must match the merchant’s company name and federal tax ID number “TIN” with the IRS TIN database.  If this information does not match, processors will be notifying merchants via phone calls, letters, emails or notices on their monthly processing statement.  It is imperative that merchants respond to such notifications.  In the event that merchants do not respond, processors will be required by the IRS to begin withholding 28% of all deposits.  These funds would go directly to the IRS and the merchant would not receive them back until they file their tax return.  Merchants may also be assessed a fine by the IRS of $150/TIN for non-compliance.

Processors are having to invest resources, money and labor in order to implement and manage the processes needed to meet these new reporting requirements.  As you may have guessed, the industry seems to be taking a similar approach as they did with PCI Compliance by passing on this expense to the merchant.  It is unknown at this time what the industry will do as a whole, but so far some very large processors have already assessed a $99 yearly fee.  Most processors have yet to make an announcement on what they are going to do but should as the year progresses.

Did you find this information helpful? If so, become one of our merchants!  This is one of the many benefits you receive when you allow us to handle your processing.  Give me a call (800) 605-3972 ext 111.

NEW!: Free Point of Sale System (POS System)
Posted by: Curtis Stevens on January 4th, 2011

Free Point of Sale SystemWe are pleased to announce a game changing event for the payment industry with our newest initiative.  We will be offering our fully loaded point of sale system (POS System) with integrated payments for free!  The software and hardware have both been overhauled for this initiative to provide a truly state-of-the-art POS solution.  Whether you need 1, 5 or 10 stations, they are all free.  You simply pay a $59 monthly support fee per station and receive lifetime replacements, on-site repair & professional installation and 24/7 remote tech support.

If the system is having a problem, our tech support team can remotely log into the system to trouble shoot.  This will help resolve issues more quickly than ever before.  No other POS system offers this feature!  There is a retail, restaurant and pizza version of the software to meet most merchant’s needs.  And of course, the device is 100% PCI compliant and will include any and all upgrades in the future!

Verifone Acquires Way Systems
Posted by: Curtis Stevens on September 3rd, 2010

verifone-logoway-systems-wireless-terminal2It was announced on Wednesday, September 1, 2010 that Verifone acquired Way Systems.  Verifone has had a couple of acquisitions these past few years.  I’m sure it has a lot to do with increasing their market share and ensuring their footing in the ever changing payment space.  From all the acquisitions I have ever witnessed in generally, they normally never go over very smoothly.  Some areas will surely take a hit, like service and support.  However, only time will tell.  If anything, Verifone needs to get their act together.  If you visit, it simply redirects to a single page on Verifone’s web site.  There is no longer any information about the product, service, etc.  What’s up with that?  I believe they should have planned that better.  On the positive side, we still have some of the $249 Way Systems Special in stock, so get one while you can.

New Product: iPhone / iPod Touch Wireless Processing Device
Posted by: Curtis Stevens on August 5th, 2010

paysaberWorld meet PaySaber.  PaySaber welcome to our product line.  We are excited to announce our new product that turns your iPhone or iPod Touch into a wireless credit card processing machine!  It has an integrated card swiper so you can qualify for retail rates along with an integrated thermal printer.  You can also elect to email customer receipts as well.  This device can even act like a complete POS system if you choose.  It can also track your inventory with the optional bar-code scanner.  It even has a customer database feature as well.

The current selling price for this product is better than any other competing product in the market place.  We are currently selling the device at an introductory price of $199 and that is a steal!

Also, check out the video on our product page that compares this to a wireless credit card machine.  It is very entertaining.

Visa, Inc. Acquires CyberSource – What Does this Mean?
Posted by: Curtis Stevens on April 21st, 2010

logo_visaI came across Visa’s announcement that they will be acquiring CyberSource for $2 billion.  CyberSource owns, a major Internet payment gateway.  CyberSource claims to processes about 1/3 of all ecommerce transactions in the US, serving almost 300,000 merchants.  What does this mean for the credit card processing industry? Honestly, I am flabbergasted and have all sorts of thoughts and feelings about this.  Because of how complex this business is and how everyone is interconnected with one another, this action can result in so many different negative  scenarios.  Visa/MC have always strictly been an association.  They have never provided any services and their member banks are the ones that do everything.  This includes issuing credit cards to consumers as well as providing merchant accounts to merchants.  For anyone that knows how this business works, this is a little bit of scary news.   You could say that Visa will now be a conflict of Interest.  I can however understand why they are making a move such as this.  They are a publicly traded company and the core motivation behind any publicly traded company is profit.  Only time will tell on what they do with it and how it affects the industry.

At the end of their Q&A session on their webcast announcement, Visa does suggest that they will be doing away with the acquiring division of CyberSource / and turning it primarily into a referral based business.  This part is good news for resellers such as ourselves.  They have been competing with their resellers for several years by providing merchant accounts themselves through a partnership.

For years, there have been reps or companies that make the claim that they are direct with Visa.  This has never been true for what I explained above.  However,  now that Visa is acquiring CyberSource, I would not be surprised if anyone working for CyberSource now tries to makes use of that line even though it is still not true.  Visa may now legally own CyberSource, but that does not change any of the relationships, costs or how everyone is interconnected with one another.

Verifone’s new mobile processing solution PAYware
Posted by: Curtis Stevens on March 23rd, 2010

apps Verifone has released a new mobile credit card processing product called PAYware.  It is Verifone’s version of mobile processing and their attempt to put the new Square product in its place.  Mobile processing is starting to grow in demand and there are countless options available today for merchants to choose from.  You have wireless terminals such as the Nurit 8020, Verifone VX610 and WaySystems 1581.  You also have mobile devices that work with the iPhone and there are even numerous app choices to choose from as well.  Verifone is hoping to become a leader in this field but only time will tell.  We are in talks with our processing relationships to see if can add this new Verifone product to its arsenal.   We already have so many choices that it may be confusing for some, but I think adding one more will only give our customers better choices and that is great for everyone involved.

Verifone’s PAYware starts selling around the country this month through the Apple iPhone store.  According to Verifone, the product uses its Connect payment gateway to process payments.  Most processors are compatible with their gateway product, so merchants should be able to pick any merchant provider they choose.  It will definitely be interesting to see how mobile processing progresses over the next few years.  Will the wireless terminals we have been selling for years become obsolete and be replaced with our cellphones that are hooked up to a swiping device (including all cell phones and not just iPhones)?  If anything, new products like this is certainly making the service more appealing to small businesses that will not process very many credit cards.

Credit Card Processing Fees: 3-Tiered VS. Interchange Plus
Posted by: Curtis Stevens on March 16th, 2010

The battle is on, which credit card processing pricing plan should your business be using?  3-Tiered pricing or Interchange plus?  This is the question many larger merchants may be asking themselves, including merchants that process $10,000+ a month in volume.  Before we go into the details, here are the basics: Visa & MasterCard have several dozen rates known as Interchange that determines the rate a merchant must pay for a particular transaction. The applicable Interchange rate is determined by various circumstances, such as was the card swiped, keyed-in with(out) AVS, is a business, corporate or reward cards.

3-Tiered Pricing VS. Interchange Plus Pricing

Under the 3-tiered pricing plan, you pay one of three rates called Qualified, Mid-Qualified & Non-Qualified. The rate you pay for each transaction is determined by the applicable Interchange rate. Under the Interchange plus pricing plan, we simply pass along actual Interchange cost and add a set markup to every transaction.

The chart below should demonstrate the concept and make things clearer.

Are you currently paying 3-tiered credit card processing rates and want to know how to compare this to the more cost effective Interchange plus plan? The following example should make things clearer. Lets say you decided to go to the grocery store and purchase 3 oranges. The prices for all of the available oranges are listed below. The ones you selected are Orange 1, Orange 5 & Orange 8.
The Orange prices below represents Visa & MasterCard Interchange cost.
Orange 1 costs $0.01
Orange 2 costs $0.02
Orange 3 costs $0.03
Orange 4 costs $0.04
Orange 5 costs $0.05
Orange 6 costs $0.06
Orange 7 costs $0.07
Orange 8 costs $0.08
Orange 9 costs $0.09
Orange 10 costs $0.10

In this example under a 3 tiered pricing plan you would have paid a total of 30¢ with the following credit card processing rates: (5¢ qualified, 10¢ mid-qualified & 15¢ non-qualified). This is calculated as follow: Orange 1 would be qualified at 5¢, Orange 5 mid-qualified at 10¢ and Orange 8 non-qualified at 15¢.

Lets assume’s markup in this example is 5¢. Under the Interchange plus pricing plan, you would have paid 19¢ total. This is calculated as follow: Orange 1 at 1¢ + Orange 5 at 5¢ + Orange 8 at 8¢ = 14¢ + our 5¢ markup, making a grand total of 19¢.

What is’s Offer?’s markup under the Interchange plus program varies based on your business type, average monthly volume and transaction size. Please call or email us for a rate quote and let us know you are interested in the Interchange plus pricing program.

Did this post make things clearer for you?  Please leave your comments and let us know.

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