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Merchant Services Blog

Merchant Services Blog

Indy Business Solutions LLC strives to educate our merchants with the latest guidelines and changes for the payment processing industry. This blog is updated on a regular basis with the latest changes that are affecting the industry. Being a merchant you are aware of the large number of factors and changes which affect your bottom line. Our goal is to educate you with these changes so you can make sure you are always getting the lowest rates possible.

With so many choices being available we work with each merchant to provide the best possible solution. The advantage to working with Indy Business Solutions LLC is we are contracted with several banks which means when they compete for your business, you win. We work for the merchant rather than the bank when it comes to negotiation, service, and pricing. We hope you find the Learning Center helpful to learn more about Merchant Services.

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Would you pay $4500 for a $200 terminal?  One of our merchants that we recently switched did exactly that with their previous merchant account. They had a $95/mo lease for 48 months on a terminal that could have been purchased for under $200.  Terminal leases are great for processors and horrible for merchants.  You can guarantee that any Credit Card Processor that pushes a lease on you is not looking out for your best interests. Its safe to assume that they would also not give you the best rates for processing. Lease companies pay processors a lot of money in return for these lucrative deals.

Indy Business Solutions LLC is not going to sell our merchants on such a crazy lease. We offer every merchant a free terminal. This terminal is provided to you as long as you a merchant with us. Now if you are the type of merchant that would rather own your terminal we will be happy to sell you a terminal as well, regardless of your choice it will not cost you the price of a lease. The short term savings are not worth higher fees over the lifetime of your account.

So hopefully you can see that the cost of a lease is not worth your hard earned money.

FANF or Fixed Acquirer Network Fee yet another cost riding on your merchant account.

What is the Fixed Acquirer Network Fee?

After the Durbin Amendment added new regulations regarding payment processing, Visa came up with the Fixed Acquirer Network Fee (FANF) to offset their lost revenue. These new charges that went into effect in April 2012 were one of two sliding scale fee structures, one being based on the number of locations, and the second being based on dollar volume processed in a month. For card present businesses, excluding fast food, the fee will be based on a business’s number of locations, ranging from $2.00 to $85.00 monthly per location. For card not present businesses and fast food the fee is based on monthly processing volume, ranging from $2.00 to $40,000.00 per month. Clearly most businesses are going to stay on the lower side of these ranges and shouldn’t fear a $40,000 FANF fee, as you would need to be processing more than $400 million a month in credit cards.

Are you missing some of your Deposits?

It could be the IRS!

From time to time we hear horror stories from merchants with deposits that seem to be missing money. Several weeks ago we heard from such a merchant with this experience.

He said the scariest part initially is that no one knew where his money went. His processor could see his batches, and his funding reports, and everything added up. But when it came to his bank statements he was missing about 30% from each deposit. He told us he was just sick when he added up all the missing funds and it came out to around $30,000. It took him and his processor more than a week to sort out where the funds had gone, and once found, he learned that he was not going to be able to access those fund until the following year.

Where did his money go you might wonder? This merchant was a victim of the new IRS regulations which allow the IRS to place an account on a mandatory 28% withholding. In 2008, buried in the middle of the Housing and Economic Recovery Act was a provision that had nothing to do with housing but was a new requirement that banks and credit processors must now report payments to the IRS. The rule, which took effect in 2012, was meant to “improve voluntary tax compliance” by business taxpayers to help the IRS determine whether their tax returns are correct and complete. This is where the 1099-k was born.

PIN debit is not EMV!

To briefly summarize, being able to accept PIN debit transactions has absolutely nothing to do with accepting EMV transactions.

We are unsure how this concept is getting traction, but suspect it has something to do with EMV being referred to as Chip and PIN in non-US countries. It also may be due to an older pricing scenario where PIN debit was cheaper to accept than debit run as a credit transaction.

Disregarding the cost of obtaining and encrypting a PINpad, which typically runs from about $100 – $500 depending on the equipment, PIN debit and signature debit were regulated by congress several years ago and now carry the same cost to accept, no matter how the debit card is processed. Additionally, when congress regulated the debit industry, they also allowed debit networks, such as Star or Pulse, and others, to charge monthly fees for processing a transaction over their network. What this means is that unbeknown to a merchant, they may end up with a monthly fee for accepting a PIN debit transaction if it is processed over one of these networks, which the merchant has zero control over. In short, it is likely more expensive to accept PIN debit now than prior to the congressional regulation. PIN debit still does carry the benefit of substantially reduced risk of receiving a chargeback, but most retail merchants rarely see chargebacks on debit transactions, so for most this benefit will be negligible.

Indy Business Solutions LLC

Avon, Indiana / USA 1.317.285.0645