On October 27, 2011, the IRS announced that backup withholding will be postponed for one year. Backup withholding will be applied to amounts paid after 12/31/2012.  The penalty relief will not, however, extend to entities that fail to file or make no effort to file 2011 Forms 1099-K as required.

Bottom line: If your IRS TIN does not match your merchant account information, then you could be subject to penalties.
“First Data continues to review State regulations related to Section 6050W backup withholding.    Based on our research to date, we currently believe that the backup withholding delay will apply to both Federal and State.    As a result, First Data is in the process of adjusting our project timelines to support backup withholding for missing / invalid TINs as of January 1, 2013. Although the delay impacts activation of backup withholding processes, development efforts continue for timely implementation.
We are in the process of researching IRS plans for the CP2100 process, expected for the Fall of 2012. Once we have additional details we will notify you.
The above announced changes do not impact our client’s responsibility to obtain valid Tax Filing Names and Tax Identification Numbers from their merchants as applicable. This information is required to ensure accurate filing of the form 1099-K reporting to the merchants and the IRS.”

Related article, Jan. 1, 2011 Deadline for credit processing reporting to IRS looms.

First Data released an article called Perspective: IRS 1099-K “Transitional Relief” Offers Backup Withholding Breather to Impacted Merchants. It’s critical for merchants to understand that while recent IRS changes with respect to payment processor reporting have been delayed, the merchant is still responsible. The two recent IRS notices do not bring merchants additional time in which to prepare for the new reporting requirements. They do, however, bring more time before affected merchants will likely have to worry about financial impacts, such as backup withholding.

RELATED ARTICLES:
Link to full article on First Data

Link to IRS New Payment Card Reporting Requirements

The First Data FD200Ti desktop terminal features a built-in checkreader and imager that processes checks through the TeleCheck Electronic Check Acceptance® (ECA) service, which verifies the customer’s checking history and, as an option, offers a warranty service. While the check reader/imager processes paper checks, the device’s magnetic strip reader accepts  all major credit and debit cards.

Connectivity is via Internet protocol, dial-up or (optionally) Wi-Fi. As an option, the FD200Ti also offers Dynamic Currency conversion (DCC) service, which makes it possible for international customers to pay in their credit  card currency. (Merchants must also have the service turned on.)

First Data suggests this unit for the following industries

• Grocery
• Retail
• Restaurant
• Travel and Entertainment
• Direct Marketing

REVIEWERS NOTES: This is the most robust of the new First Data Ti series.

Pros:

• Merchants can use one machine for both checks and credit cards.
• Flexible connectivity options, including wifi.
• Heavy duty and fast for high traffic.

Cons:

• All FD series terminals only work with First Data. This one further locks the merchant into Telecheck as well. If you want to be flexible with payment processor options, choose something else.
• No integrated debit pin pad, but one can be added.
• Like all desktop terminals, credit card processing costs are dependent upon terminal settings and cashier actions. With todays changing payments industry, it seems like a heavy investment in an old way of accepting payments.

Recommendations: Choose this terminal if you are certain you want to have an account with First Data for at least the next three years, including any ISO that processes on the First Data platform, plus telecheck, AND you have a limited number of locations.

3Dmerchant.com Pricing: $595. Add $155 for 3 year overnight replacement service.

3Dmerchant.com pricing with new merchant account:  $535.

Not sure if you want to be with First Data and Telecheck for three years? Ask about our universal hosted payment processing solution. Merchant equipment options include integrated signature capture, pin debit, gift card, EBT and check all in one terminal.  Works with all major payment processors.

So many small business owners are upset about their credit card processing costs, I’ve put together this special deal for beauty salon and spa merchant accounts. If you follow my blog, you already know that I normally specialize in $1M plus size accounts. This deal is win-win because I’m extending preferred larger account pricing to small businesses, where there is potential for more than one merchant account on site.

SALON and SPA MERCHANT ACCOUNT SOLUTION

Do you rent chairs? Pay workers on actual work performed?

3D Merchant Account Salon special:

- One credit card terminal can host up many unique merchant accounts. This is called a multi-merchant account terminal. Management can add and delete accounts as contractors come and go.

- Each contractor has their own merchant account, with their own agreement.

- Every account approved within 1 business day.

Benefits for Salon Owners:

- Eliminate bookkeeping nightmares.

- Provide valuable incentive for quality independent contractors to work at your salon.

- Minimize risks to salon.

- 24 hour support line.

-    Happy workers bring in more business and stay longer, reducing turnover which saves you time and improves profits.

Benefits to Salon workers:

- Can add tips to their sales, potentially increasing their pay, making them happier.

- Funds deposited in bank accounts in 1-2 business days.

- No big equipment investment. Ready to start almost immediately.

- Our Multi-merchant deal is better than obtaining their own small business merchant account deal.

- Optional Quickbooks software plugin.

- Set the equipment to batch out daily automatically; reduces costs from accidentally forgetting to close out.

Costs:

- Hardware

o FD300 PCI Compliant multi-merchant terminal. Lease for $ 24.95/mth, 3 years.[1] Includes overnight replacement guarantee. (other equipment and purchase options available)

o Built in pin-based debit capable, reducing costs of processing; Typically $.35-.90 per transaction instead of percent of sale.[2]

o Recover equipment costs with a small monthly rental fee added to contractors.

- Merchant account fees start at 1.35% for debit and 1.89% for credit, plus $.20 per transaction.

OPERATIONS:

Management will have own unique login. When someone leaves, they can delete the user.

- Each user has own password. This eliminates error of entering transactions to the wrong account.

- Adding another merchant is a phone call from the terminal for a ‘partial download’, which can be done in minutes.

For an apples-to-apples price comparison with your current processor, please fax a recent statement with cover including contact information to 954-942-9804. If your account is up and running this month, all application and cancellation fees will be waived forever, plus I’ll ship your terminal free, pre-programmed and ready to go. Just plug it in and start processing.

Call Christine 954-942-0483

http://www.3Dmerchant.com

Non-receipt of PCI Validation fee for $19.95 showing up on your merchant statements? This is normally from failure to complete your required PCI Compliance paperwork at SecurityMetrics.com. What paperwork? If you’re one of my customers, below is what was sent in the mail from Security Metrics.

PCI compliance validation FAQ (PDF)
Security Metrics Enrollment (PDF)
Payment Processor Letter Security Metrics Overview (PDF)

DISCLAIMER:  Your documents and fees may vary. Newer documents may have been published since these. Please contact your processor for specific information about your PCI Compliance statement fees.

This subject was highlighted in the January 3D Merchant newsletter. First Data created a mandatory PCI Compliance Assistance Service Program in 2009. Since so many merchant processors have First Data relationships, the reach is huge. Security Metrics administers the program, which has a mandatory annual fee and compliance certification requirement. Merchants MUST return the PCI Compliance Validation form in a timely manner. If you do not return the form, or are not PCI Compliant, you’ll be charged $19.95/month. All fees are deducted from your merchant account. I’ve already seen this fee appear on a Sun Trust merchant statement from a non-customer as a non-receipt of PCI Validation so please turn in your paperwork per the instructions.

A few merchants I’ve spoken to said they didn’t receive the letter from Security Metrics  but they are getting billed. Unfortunately, this is basically a blind program. We don’t know when letters are sent, and don’t know there is a problem until the non-compliance fee shows up. Merchants should read the ALERT messages that appear on their statements. There is information about upcoming fee changes, and other critical messages.

WHO GETS THE LETTERS?

It’s delivered to the same name and address that merchant statements are sent to. If you have an old name on your merchant statement, update your records.

WHEN ARE THE LETTERS SENT? They are being sent at random until every merchant receives them.

WHAT IF I DON’T HAVE A LETTER, BUT I’M GETTING A MONTHLY Non-receipt of PCI Validation FEE? If you’re one of my customers, you can go straight to SecurityMetrics.com and register. Your company is in the database and you’re automatically billed on your merchant statements.

DO I NEED TO FAX OVER THE ENROLLMENT FORM? No. That is one of the options. I recommend that you simply start with the online form.

DO I NEED TO KNOW ALL THE ANSWERS BEFORE I START ONLINE? No, but I recommend you visit the PCI Security Standards web site first and download the appropriate SAQ (self assessment questionnaire). That way when you do online you can zip through the questions.

WHAT IF I’VE ALREADY BEEN CERTIFIED BY ANOTHER APPROVED VENDOR? You can submit your certification documentation via fax to 402-916-8240 or via email. Contact your processor or sales agent for details.

IS THE MONTHLY FEE PERMANENT? No. The fee is for non-receipt of materials. Once you are proven PCI Compliant, the fee will come off, however, it may not be immediate.

related articles:

First Data PCI Compliance fee

First Data Merchants Attain Record PCI Compliance

TransArmor^SM Solution Piloted by Spectrum of Brick-and-Mortar and Card-Not-Present Retailers; First Commercial Transaction Tokenized on STAR ® Network

RSA CONFERENCE 2010 SAN FRANCISCO, March 1, 2010 First Data Corporation, a global leader in electronic commerce and payment processing, today announced the expansion of a merchant pilot of the First Data^® TransArmor^SM solution. More than 400 U.S. merchants of all sizes will assess the comprehensive data security solution over the next four months. The TransArmor solution (previously called First Data^® Secure Transaction Management^SM) was developed in close partnership with EMC Corporation (NYSE: EMC).

The TransArmor secure payments service is designed with the needs of merchants in mind, and it has the opportunity to fundamentally change the way merchants secure and manage cardholder data. The TransArmor solution addresses the root cause of merchant data security issues by removing payment card data from the merchant environment as part of processing the transaction, significantly reducing risk and the scope of PCI compliance efforts.

Deploys RSA SafeProxy Architecture
The solution leverages the RSA SafeProxy^TM architecture, a powerful combination of asymmetric encryption, tokenization and key management engineered to provide the benefit of end-to-end protection and eliminate on-site cardholder data storage for merchants. Unique features of the token make it possible for merchants to continue to handle key business functions such as returns, recurring billing, loyalty programs and other analysis, without enabling card data to be used for fraudulent transactions.

On Feb. 26, 2010, the TransArmor solution tokenized the very first commercial transaction over the STAR ® Network at the Center of Science & Industry (COSI) in Columbus, Ohio. A First Data company, STAR is one of the nation’s leading electronic funds transfer (EFT) networks with more than two million retail and ATM locations.

As an early participant in the TransArmor pilot, COSI is already experiencing the benefits of the solution. Like most consumers today, several of our customers had concerns about the safety of their credit and debit card data while visiting our center. TransArmor gives us peace of mind that their payment card data is locked in a virtual vault at First Data and nowhere on site at COSI,” said Brad Morgan, senior IT operations manager at COSI.

Works with Existing Merchant Hardware
Unlike some solutions in the marketplace, the TransArmor solution can be implemented without the need for new hardware or back-end IT operations. The solution works with First Data as well as other terminals or point-of-sale systems and can be consistently applied across brick-and-click environments.

The response from merchants interested in participating in this trial has been enormous and a testament to the sought-after service TransArmor delivers said Craig Tieken, vice president of Merchant Product Management at First Data. Up until now, there have been few easy and cost-effective solutions to the growing problem of managing the risks of handling sensitive payment card data. TransArmor represents a fundamental change in how merchants can confidently protect and manage cardholder data.

The consequences of a merchant data compromise in legal, financial, consumer confidence and brand loyalty terms can be overwhelming. According to the 2009 U.S. Cost of a Data Breach Study by the Ponemon Institute, the average cost for merchants coping with a data breach in 2009 rose to $6.7 million with the cost per customer record breached estimated at $204. With the TransArmor solution, customer card information is retained only at the processor and protects merchants from the dangers of malicious attacks designed to steal payment card data in transit or in storage from merchant databases.

Implementing effective data security can’t mean more complexity for businesses, said Brian Fitzgerald, vice president, Marketing, RSA, The Security Division of EMC. TransArmor successfully embeds industry-leading security technology into the payment processing infrastructure to make it available to, and more importantly, usable, by merchants of all sizes. TransArmor is an example of the type of partnerships required from industry leaders that will reduce the reliance on point solutions and enable an industry ecosystem with pervasive built-in security.

Teams from RSA and EMC Consulting worked collaboratively with First Data through product strategy development and technology proof of concept for a successful pilot and product launch.

About First Data
First Data powers the global economy by making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of electronic payment. Whether the choice of payment is a gift card, a credit or debit card or a check, First Data securely processes the transaction and harnesses the power of the data to deliver intelligence and insight for millions of merchant locations and thousands of card issuers in 36 countries

FD-30 PIN pad discount sale $185. The FD30 combines contactless reader technology, a traditional magnetic-stripe reader and a PIN pad in one compact unit. 2010 PED compliant, it’s the newest device from First Data. The device is able to accept PIN-secured and signature debit cards, credit cards, EBT cards plus a variety of contactless cards, key fobs and mobile payment supported devices.

If you’re investing in new pin pads now, you might as well get this one if you are on First Data, because contactless payment methods are expected to explode in the next 12 months. MasterCard has already issued over 50 million contactless cards and devices. Pin debit reduces merchant risk since there are no chargebacks, plus reduces costs in most cases.

In summary, the main differences between this and other pin pad devices are:
- Interactive payment process with lights and audio cue. This keeps lines moving fast and you are more likely to convert transactions to pin debit vs signature debit.
- Accepts all credit, debit and gift contactless cards, key fobs and other form factors including POS-enabled mobile devices.
- Field-upgradable to accept new payment types and enhancements as they become available.

If you process under $1,000,000 per month, this is a fine solution if you are on the First Data network, one of the three largest in the USA.
If you process over $1,000,000 per month, you’ll want to explore a more robust CenPOS solution to increase pin debit usage.

CALL 954-942-0483 TO ORDER.

FD-30 Pin pad brochure

Why am I offering this great price? Do I want to sell lots of equipment? No. I hope that you’ll give me the opportunity to help you control your credit card processing costs through a managed service.

Do you know the difference between costs you can control and costs that you cannot?

Do you know what interchange costs are?

Do you know how you can influence which levels of interchange you qualify for?

How are you managing interchange qualification now?

If you qualify, we have several programs to help you PERMANENTLY control payment processing costs. Keep your payment processor or change your payment processor. We have different plans for different circumstances including pay upfront, or pay nothing. Here’s more info to get for a merchant account analysis.

First Data announced a new PCI Compliance fee for all Tier 4 merchants. This bulletin will or already has been placed on merchant statements. Basically, they require all merchants to complete a self assessment survey and all merchants will be subject to a $79 annual compliance fee; non-compliance, including failing to respond, results in additional fees of $19.95 per month.

If you have not already completed one, please go to PCI Security Standards Council, download the
appropriate PCI SSC Self-Assessment Questionnaire, and immediately complete. All level 4 merchants should be in full compliance per the terms of accepting Visa, MasterCard etc. The PCI Data Security Standard Self-Assessment Questionnaire is a validation tool intended to assist merchants and service providers in self-evaluating their compliance with the Payment Card Industry Data Security Standard (PCI DSS).

This fee will affect over 100,000 merchants because First Data is a huge partner with Independent Service Organizations (ISO’s). Even though you may have a merchant agreement with an ISO, such as First Payment Systems, the agreement will clearly state it is underwritten by First Data or another entity.

First Data Selects Security Metrics for PCI Initiative (download press release PDF)

Related Article Non-receipt of PCI Validation fee