Posted by: Curtis Stevens on March 19th, 2011
The 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.
Posted by: Curtis Stevens on January 4th, 2011
We 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!
Posted by: Curtis Stevens on September 3rd, 2010
It 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 www.waysystems.com, 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.
Posted by: Curtis Stevens on April 21st, 2010
I came across Visa’s announcement that they will be acquiring CyberSource for $2 billion. CyberSource owns Authorize.net, 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 / Authorize.net and turning it primarily into a referral based business. This part is good news for Authorize.net 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.
Posted by: Curtis Stevens on March 23rd, 2010
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 Gotmerchant.com 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.
Posted by: Curtis Stevens on February 22nd, 2010
I have been in the credit card processing business since 2003. I have always wondered why the IRS never required processors to report the processing volume of its merchants. Well,that has all changed thanks to the IRS sneaking a requirement in the housing assistance tax act that was passed in 2008. Starting next year, your credit card processor will be required to report your gross processing volume. The new form will be called a 1099-k. The IRS will only see your gross volume. Any deductions like chargebacks and refunds will need to be deducted and is your responsibility.
My question is what will the processing industry do? Will a lot of big ISOs start charging the merchants a new fee to help cover their cost to handle this new reporting requirement? Only time will tell, but I hope not. I do not know the logistic of it and how easy it will be. I am sure however if there is significant cost, many processors will create a new fee and past on the expense. So if you have been trying to get away by not reporting all of your gross sales, that day is coming to an end.
Posted by: Curtis Stevens on February 10th, 2010
Gotmerchant.com received a 5 star rating from a credit card processing review site called Merchant Maverick about a week ago. I would have posted something sooner, but things have been super busy lately. I was very excited at the time, but that hasn’t completely worn off quite yet. I never heard of this web site until they reviewed us, so that should tell you it is completely unbiased. I learned about it through Google Alerts as I have our company name monitored using Google Alerts. Anytime someone posts anything new on the web using our company name, we receive a notification. This is a great customer service tool. It allows you to find out if anyone is posting negative comments about your company so you can address their concerns and resolve it. Hopefully, you can convert that unsatisfied customer and protect your reputation in the mean time.
I’m surprised I haven’t found Merchant Maverick before as I consider myself very up to speed with our industry and everything that goes on. I managed to look through the web site and believe they have done a great job. It is a great resource for anyone wanting to find a merchant account provider. It is jam packed full of reviews on dozens of companies. It is also great that we received such a high rating. There are a lot of great processing companies out there and Gotmerchant.com is truly one of them that does everything possible to bend over backwards for its merchants. No company is perfect, but we sure try our best to be one. I’m thrilled that an outsider such as Merchant Maverick has been able to see this. We are not a huge conglomerate like FirstData or Chase Paymentech, but that allows us to focus on our merchants and their individual needs.
Posted by: Curtis Stevens on January 26th, 2010
It appears that JellyBelly.com is now offering its customers the ability to pay with a debit card in two ways. The first option has always been available and that is to process it like a credit card. The second choice has never seen the Internet era and that would be as a pin-debit transaction like you perform in a retail store. Pin-debit transactions have always been kept in a retail environment and never introduced to the Internet world because of security concerns. Honestly, I never thought this day would surface in the credit card processing industry. Merchants do save money by processing a debit card using one of the debit networks instead of Visa/MC, but the customers pin number is the only security the card has. For me, I don’t see how one would want to enter their pin number over the Internet to process a transaction. The transmission can be secure over the Internet, but it is the consumer’s computer where the vulnerability lies. The consumer’s computer could be compromised and anything they input with their keyboard or move with a mouse could be recorded by a hacker. One could probably say this is no different than banking online, but I’m not sure how consumers will take to the idea, if they will feel comfortable enough to enter their pin-number online. I suppose it is only a matter of time.
Posted by: Curtis Stevens on January 19th, 2010
According to NY Times, many of the card networks are waiving the credit card processing fees associated with processing a card when making a donation for Haiti relief. This would allow consumers to donate their funds knowing that almost 100% of their donation should be going to the intended party. According to a report, banks make as much as $250 million a year on charitable donations, especially rising after a disaster. The card networks have only waived their fees once before, after the tsunami in 04. Visa stated that it would not apply Interchange fees through the month of February to a select group of charities. The names are still being piled. MasterCard said it would waive donations made to Red Cross, Unicef and a few others. Amex would be waiving fees until the end of Feb. Discover said it would also be waiving the fees, but did not disclose the details. This is great for consumers as well as non charitable organizations.
Posted by: Curtis Stevens on January 15th, 2010
The NJ ledger reported the other day that a few local gas stations are starting to offer two tierd pricing for gas at the pumps. Almost like how the credit card processing industry does its pricing. One price for cash paying customers and another for credit card payments. The gasoline industry has seen a steady incline in credit card payments usage. Especially back when gas was topping $4 a gallon and this places a tight squeeze on the station’s profit margin. The report stated that the pricing system is completely legal, but not an option for most gas station owners because they are not able to purchase the necessary equipment required to track everything. The systems can cost up to $15K. On a side note, it may be legal in terms of the law, but they may be in violation of V/MC rules. Their rules state that a merchant can not surcharge a customer who is paying by credit cards. The way the market has been getting around that for years is to have a cash discount from the regular advertised price. But doing this is a very fine, tricky line that I recommend taking extreme caution with.
Image thanks to http://www.flickr.com/photos/65013758@N00/26603770/