IRS Deadline for Merchants is Approaching, Is Your Business Compliant?

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This past year, Congress passed a new law requiring merchant processors and acquirers to validate their merchant’s Tax Identification Numbers (TINs) by January, 2012. The law originated with the federal government’s concern about finding unreported or under reported taxable business revenues. The law is designed to help the IRS match income from sales paid with payment cards to income claimed on tax returns.   The new law will collect an estimated $10 billion in additional IRS revenue over the next 10 years. The merchant acquirers and payment settlement entities must file annual reports for each merchant listing the merchant’s monthly gross receipts from electronic payment transactions.  In addition, they must complete a new IRS form, 1099-K which matches the TIN with the legal business name. What does all of this mean for you, the merchant? A card accepting business encounters problems if the TIN and legal name on file with your merchant account provider (acquirer) does not … [Read more...]

Durbin Amendment Regulates Debit Card Fees beginning October 1, 2011

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The final ruling on the Durbin Amendment to the Dodd-Frank Act was passed this summer in 2011.   Senator Richard Durbin added this amendment to the Dodd-Frank Wall Street Reform & Consumer Protection Act last minute. It’s officially known as Section 920 of the Electronic Fund Transfer Act (EFTA) of Dodd-Frank.  Here’s what it means for all of us. The Amendment reads an October 1st, 2011 deadline for implementation.  All Card Issuing Banks with assets greater than $10 billion must cap the interchange fees associated with debit cards for both signature and PIN debit. Card issuing banks with assets less than $10 billion are excluded from the Amendment.  Moving forward, the big banks will be looking for ways to replace a good portion of the $1.3 billion in swipe fees that are collected each year from retailers.  In fact, many big banks have already implemented monthly debit card fees for card holders and removed rewards programs associated with debit cards issued to … [Read more...]

Don’t Get Duped by the “Bottom Feeders”

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As a business owner or manager you are familiar with the sales calls that frequently get routed to your ear.  No more annoying than the one that goes like this. “Mr. Owner, great news! Your business is eligible to receive wholesale credit card processing rates.” Currently you are processing at a retail level and we just need to get an account executive out there to qualify your business.” The next thing you know, you’re signing paperwork to receive proposed savings on your credit card processing fees. What you’re really signing is a 3-4 year agreement to do business with someone you just met that day. A week later, a new credit card terminal arrives (which you really didn’t need in the first place). Instead of the account executive coming back to help with installing the terminal, you have to spend an hour of your time on the phone with a tech rep while you attempt to get it working.   Now, fast forward a month or two when you get your first statement. After doing the math, … [Read more...]