Are Your Merchant Services Fees About to Go Down? Maybe . . .
On Thursday, July 21, 2011, the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173) impacting debit card interchange fees are scheduled for implementation. Recent failed attempts by Senator Jon Tester (D-MT) to delay the laws implementation have sent the banks scurrying to contest the new law in court.
Final regulations from the Federal Reserve Board are expected out as soon as Wednesday, June 29th, and barring a court ordered stay, interchange fees for all debit card transactions will be capped at $0.12, a reduction of between 65% and 95% from current levels, depending on your average size transaction.
The change impacts both “signature” debit and “pin-based” debit transactions; however, you may not experience any of the anticipated savings if you don’t have “interchange pass-through”, also called “cost plus”, pricing from your merchant services provider.
If you see the words “Qualified”, ”Mid-Qualified”, or “Non-Qualified" on your merchant statement, or you have a flat-rate, often two-tiered pricing model, you may not experience any beneficial impact from these new rules.
In addition to the fee reductions required by these regulations, merchants are also now allowed to impose minimums on credit and debit card transactions, and even be selective regarding the types of cards they choose to accept. Both of which were banned practices by the card associations in the past.
Merchant services accounts and regulations are often difficult to understand, so it’s imperative that you seek counsel from a professional merchant services provider to determine if your plan will be eligible to benefit from these and other new regulations.
AOA’s preferred payment card processors (we have two) should be able to help you assess whether you will benefit from the new law’s implementation. Many AOA members have found great savings on their payment card processing costs through AOA’s processors, Fund Your Dream Merchant Services or Bank of America Merchant Services. Call the AOA office for more information 800-524-4814.
For more on this important topic, see the following related articles:
Banking Industry Girds for Debit Card War in Court, WSJ, June 14, 2011
Bank Lobbyists Fail to Delay Durbin Amendment, Forbes, June 8, 2011
Credit Card Payments to be Reported to the IRS Beginning 2011, IRS, January 21, 2011
RECENTLY, WE HAVE BEEN INFORMED THAT SOME OF OUR MEMBERS HAVE RECEIVED OFFICIAL LOOKING LETTERS FROM COMPANIES FALSELY REPRESENTING THEMSELVES AS "YOUR CREDIT CARD PROCESSOR", SEEKING TO VERIFY YOUR FEDERAL TAX ID NUMBER (TIN).
It is true that a new IRS regulation, IRC Section 6050W, enacted by the Housing Assistance Tax Act of 2008, now requires that acquiring banks associated with your merchant account report annually all processing gross receipts during the year on a 1099-K. Failure to file this report can subject the acquiring bank to penalties, and you to potential backup withholding. Merchants that fail to provide a valid federal tax identification number may be subject to backup withholding of up to 28% of your credit and debit card activity!
BE SURE THAT YOU CALL YOUR CURRENT MERCHANT SERVICES PROVIDER BEFORE REPLYING TO ANY SUCH LETTER, OR RESPONDING TO ANY UNSOLICITED TELEPHONE INQUIRY ON THIS SUBJECT!
This Week's Online Class: Secrets of Search Engine Success
85% of Internet users doing their research online use search engines. Most rarely go beyond the first 10 results listed. To benefit from this tremendous traffic opportunity you have to make sure your site is designed to be search engine friendly, as each have their own unique ranking criteria which is always changing. Susan Sweeney, Internet marketing expert and the best selling author of 8 Internet marketing books including 101 Ways to Promote Your Web Site, and Social Media for Business will discuss the popular search engines and their ranking criteria, the formula for search engine success, the impact of social media, as well as provide you with tips, tools, techniques and resources to optimize your search engine placement.
Speaker: Susan Sweeney
Date: Thursday, June 30, 2011
Time: 1PM to 2PM Central
Registration Fee $49.95 or $39.96 (20% Discount) for America Outdoors Members (Use Coupon Code AOA)
Click here to find out more. Click here to register.