Responding to complaints about problems in implementing a new federal law requiring acquirers to report merchants’ electronic payment transactions, the Internal Revenue Service announced on Wednesday it will delay penalty provisions and withholding requirements for a year, until Jan. 1, 2013. All acquirers still are required to file the 1099-K reporting form by year-end.

http://digitaltransactions.net/news/story/3254

Please find a “credit card authorization form” to be used whenever you think it’s warranted for extra security as for example large orders, new customers you don’t know and if the email address doesn’t match the person’s name. Also for mail order merchants beware if cardholder communication has misspellings and/or bad grammar. If they give you more than one credit card this is also a red flag.

I hate people that do identity theft and cheat merchants. Don’t forget if you are suspect of a transaction to

-make sure the avs and cvv match
-have them sign a cc auth form (attached) and provide a copy of their driver’s license and front & back of cc
-Also call the purchaser’s phone # to confirm the order. You’d be surprised that 90% of the time the phone # is phony and/or disconnected
-also call the issuing bank phone # on the back of the cc. Surprisingly the phone # usually doesn’t match the name of the issuing bank on the front of the card
-google the email address-often fraud will show up in regards to that email address
-make sure you ship to the address you did the AVS check on and get a signed proof of delivery or signature at will call.
-google the purchaser’s name, address & zip to see if it matches and if any fraud shows up.. It will usually show up and oftentimes give you business and other info besides verifying the name & address.

Also use http://www.whitepages.com/person

More below
For looking up a person by name to see if info they gave you matches

http://www.spokeo.com/ This service is free but for only $2.95 per month you can get a much more detailed report.

For looking up location of sender’s IP Adress

http://www.ip-address.org/

How to find sender’s IP Address

http://www.ip-address.org/tracker/trace-email.php

For my ticketbroker clients eTickets comprise the vast majority of chargebacks due to fraud and reneging cardholders. I advise to do Will Call whenever possible as crooks don’t want to show a picture id and sign. Plus most stolen cards are electronic and not wallet theft and they don’t have the physical drivers license, etc. If you do an eticket and its a stolen card there is unfortunately no recourse (personally I think the card issuing banks should eat the charge not the merchant) If dealing with a disgruntled cardholder doing a chargeback make sure your website has a “clickthrough” page that shows your terms and refund policy and the cardholder has to click “agree” to proceed to purchase. If there is a chargeback make sure to send a copy of that page with your reply. If the customer is coming in to pick up their order and you have already charged the card have a manual imprinter and have them sign a cc receipt. Your best chance for chargebacks is with Amex who usually side with the merchant. With MC/Visa you are at the mercy of erratic issuing bank staffing that is often inexperienced and who may make emotional decisions.

Some of the biggest payment processors in the United States are assessing new merchant fees related to compliance with section 6050W of the Internal Revenue Code (IRC). However, the Internal Revenue Service indicated charging merchants for production or verification of taxpayer identification numbers (TINs) and business names, or for processing and filing 1099-K forms, is not allowed.

The IRS seeks to collect as much as $9 billion in new revenue as a result of new reporting requirements contained in The Housing and Economic Recovery Act of 2008. The act is designed to help the IRS detect fraud and identify revenue. The IRS rule implementing section 6050W shifts the merchant income reporting burden to acquirers.

“Payment processors will need to integrate tax reporting into their customer facing applications,” said The Fraud Practice, a risk management solutions consulting service in a December 2010 white paper. “They will have to change the way they collect and authenticate account holder data, they will have to set up customer service support for tax related inquiries and they will likely have to change the fundamental way they look at account holders.”

Under section 6050W, payment processors and, by extension, ISOs must have valid TINs and business names for every merchant they service for processors to file the newly required 1099-K forms for their merchants in 2011.

The 1099-K is used to report the gross amount of payment card transactions to merchants and the IRS. If an invalid TIN or business name is submitted, the IRS will issue a backup withholding notice (B Notice) rejecting the 1099-K submission. If the B Notice isn’t corrected in 30 days, the merchant is liable, and the processor must withhold up to 28 percent of the merchant’s payments. Processors must also make certain the new information they are required to collect is secure.

“Merchants and consumers will ultimately pay for this,” Security Metrics President Brad Caldwell said. “The problem is when you submit the DBA or TIN information, you don’t know what is wrong until something is wrong. The forms are just rejected. They don’t say why. The process is costly. … This is going to cause a lot of grief to merchants.”

Can’t pass on costs

The IRS seems clear the law does not allow processors to recover costs related to 6050W compliance. In a frequently asked questions publication issued on the topic in July 2011 (www.irs.gov/pub/irs-utl/irdm_section_6050w_faqs_7_23_11.pdf), the IRS posed the question, “Can the parties responsible for filing the return pass the costs of collecting and processing the information on to their clients?”

The answer: “No. Because federal law requires payment settlement entities or electronic payment facilitators to file information returns and to furnish payee statements, such entities are precluded from collecting fees for costs incurred in fulfilling these requirements.”

An IRS agent stated on background the IRS believes this prohibition is contained in the broker requirements of IRC section 6045, a reporting rule covering real estate brokers. “The regulation makes really clear the broker can’t shift the financial burden to people making the report,” he said.

Some believe the IRS’ position is not a formal ruling. “The IRS commented informally that you can’t charge for TIN matching,” Electronic Transactions Association Director of Government Relations Mary Bennett said. “There are a lot of other components that go into this outside TIN matching. There is the ISO’s relationship with customers and other business costs associated with TIN matching.”

Still, Paula Porpilia, a TIN compliance consultant and member of the IRS Information Reporting Program Advisory Committee, confirmed “the IRS doesn’t believe processors will be allowed to charge for these services.”

Companies passing on costs

According to First Data Corp. spokesman Andy Payment, First Data has instituted a new fee for a Regulatory Product Bundle. “The fee is for a new suite of services related to IRS 6050W regulations, as well as proposed legislative changes, which encompass much more than processing the 1099 forms,” Payment told The Green Sheet.

First Data pricing is tiered from $3.95 per merchant per month for acquirers with one to 2,500 merchants to $1 per merchant per month for clients working with more than 10,000 merchants.

Sage Payment Solutions President Greg Hammermaster said his company has an optional service to help merchant customers with 6050W compliance. “While we recognize that merchants can monitor their own usage, Sage is providing an optional service for those who prefer assistance,” he said.

“The service monitors merchant activity monthly and confidentially reports to them their gross transactions so they can prepare their 1099 submission when needed. … This service is available as an option for a fee of $9.25 per year plus $2.10 per month.”

An acquiring executive at a bank in the western United States (who agreed to speak with The Green Sheet if he would not be identified) said he knows of one large ISO with 20,000 accounts and no TINs. “They are going to have to go back and manually get the data and fill it in,” he said. “If we pass the costs on, the merchants complain, and they are right to complain. These are new fees not in their contract.”

He added that ISOs are innocent bystanders getting hurt. “We’re getting resistance from ISOs on these new fees, [which] may not sound like a lot, but added to other fees like PCI compliance and such, it’s not competitive with others who are not imposing fees this year and are waiting until next year,” he said. “It helps that First Data took the lead. … They have half the market. If they are charging, it makes it easier for everybody getting out of the water.”

Pushing back

Cynergy Data LLC Executive Vice President Sales Kevin Smith said ISOs are being cautious. “I don’t think ISOs are prepared,” he said. “The ramifications are not such that you want to be on the wrong side here. There are three ways to look at the impact: a revenue opportunity, a customer service opportunity or a sales opportunity. Every ISO is going to have to decide for themselves if this is a revenue opportunity.”

Impact PaySystem President Dee Karawadra stated he will not charge merchants for 6050W compliance. He said he understood the need when PCI compliance fees were introduced, but in the last three years, additional fees have proliferated. “These are BS fees – Internet fees and cross-border fees – passed through to merchants,” he said. “It’s a short-term deal. Those who have a fee will see a big hike in residuals at first, but it won’t be long before they see a big dip in them as the competition comes in with lower pricing.”

About his clients, Karawadra added, “These are people I know and people my agents know. If we start changing merchant fees, we are going to lose these people.”

Introduction

Social Media is a set of technologies and channels targeted at forming and
enabling a massive community of participants to productively collaborate.
These technologies are media for social interaction, and can take many di!erent
forms including internet forums, blogs, wikis, podcasts, videos, social
bookmarking, and social networking sites.

There are key characteristics that di!erentiate social media solutions from
other forms of communication. A core principle of social media is participation
and the only way to achieve benefits from social media is by mobilising the
community to contribute. It is not enough to simply collect comments from
participants, transparency allows other to see, comment, use, validate and rate
other participant’s contributions. This encourages further participation and
actually shows that you can’t control, predict or model interactions like you can
with other communications channels.

….1 .
Increase Your Event Ticket Sales Through Facebook

This article will focus on a specific channel of social media – social networking
sites, Twitter and Facebook specifically. Started in 2006, Twitter is an information
network where millions of people and businesses share and discover new
information. With over 200,000,000 registered users and 460,000+ new sign-
ups daily, Twitter is becoming a powerful tool for businesses. It allows you to
share information, gather market intelligence and insights and build relationships.

Founded in 2004, Facebook has more than 500,000,000 active users with 50%
of them logging on to Facebook in any given day. Users spend over 700 billion
minutes per month on Facebook and 250,000,000 active users currently
accessing Facebook through their mobile devices. The average user on
Facebook has 130 friends.

Problem

How to integrate social media into your traditional marketing activity and leverage
the new opportunities this channel presents? Many people are hesitant to
dive into the social media world due to fear of the unknown (new technologies)
and the possible threats that it could present. But it is now becoming impossible
to ignore the power of social media and in particular social networking
sites as a sales channel for events. Next we will look at the benefits for utilising
these types of sites in your marketing activities and how you can capitalise.

Solution

Social Media becomes Social Commerce

Previously everyone talked about e-commerce, basically the process of selling
things on the internet. Since the introduction of social media, this has evolved
into social commerce, using social media platforms such as Facebook to sell
things. When you think about an audience of 500,000,000 users on Facebook,
this become a very attractive sales channel, particularly given the nature of
Facebook – a network where we often look to others when making decisions
and our network structure impacts who we ask or are influenced by. Word of
mouth is a powerful tool in promoting events and in a Facebook context there
is huge potential. If you have 1,000 passionate fans on Facebook, they buy a
ticket to your event, they each tell 10 friends who tell a further 10 friends, that’s
100,000 people who have been told about an event by someone they trust and
can potentially be influenced by.

………
Increase Your Event Ticket Sales Through Facebook

Steps to Integrating Social Media
into your Event Marketing

Step
1
Step
2
Set up a company or event page on
Facebook – it’s simple and free to do!
Facebook Pages allow artists, businesses, and brands to showcase
their work and interact with fans. These pages come pre-installed
with custom functionality designed for each category. For example,
a band Page has a music player, video player, discography,
reviews, tour dates, and a discussion board that the artists can
take advantage of. Third party developers will also build an array of
applications that they will compete for Page Admins to add to their
Pages. Facebook Pages are also not subject to a fan limit and can
automatically accept fan requests. If you are the o”cial repre-
sentative of an organisation, business, or event you can create a
Page to represent your organisation on Facebook. To create your
own Facebook page visit
http://www.facebook.com/pages/create.php
and follow the steps.
Encourage people to become a
fan of your Facebook page
A few suggestions for increasing the number of fans: email your
database and ask your customers, prospects, etc to become fans.
There are a variety of free email marketing tool available such as
MailChimp http://mailchimp.com/ that you can use to email your
database in a professional, cost e!ective manner. Include Face-
book and Twitter pages links in your email newsletters and put
links to your Facebook and Twitter pages in your email signature
and on your website.
….3 .
Increase Your Event Ticket Sales Through Facebook

Communicate with your fans
Post engaging content – links, videos, photos, comments that
encourage fans to interact with the page, post comments, like your
posts and share posts with others. Facebook has a Resources
section which allows you to send updates to your fans. There is the
ability to segment who you send the message to by location,
gender or age. To access this section, log into your Facebook Page
and click edit info at the top of the page. Next click on Resources
and then Send an Update. In this screen you can select who you
send the update to, add the subject and message text. Send your
fans a message telling them that they are able to buy tickets for
your event through the Facebook ticketshop and be sure to include
a link to the ticketshop.
Integrating your website with
Facebook is a great way to increase
the number of fans on your
Facebook page
Facebook has a number of ways that you can integrate social
plugins across your website from like buttons, activity feeds,
recommendations, like boxes, to live streams. For information on
how to integrate these plugins with your website visit
http://developers.facebook.com/docs/plugins/
Step
3
Step
4
There’s more…
………
Increase Your Event Ticket Sales Through Facebook

Sell tickets through your
Facebook Page
Setup a ticketshop so that you can commence social commerce
and sell tickets to your event through your Facebook page and
reach those potential 100,000 people! Customers that buy tickets
for an event through Facebook can communicate this to their
complete network of friends with one click and automatically
update their status with links to the Facebook ticketshop spread-
ing the potential for ticket sales to an even greater number of
people. Visit www.ticketscript.com for more information on setting
up your own Facebook ticketshop.
Integrate Social Media Channels
Connect your Facebook account with Twitter so that you reduce
duplication of e!ort with only having to post content once.
Step
5
Step
6
There’s more…
….5 .
Increase Your Event Ticket Sales Through Facebook

Step
7
Step
8
It is important not to forget –
monitoring results from this activity!
Regularly view the insights from your Facebook page and monitor
the number of fans you have, how many likes you have, the
number of post views (some posts may engage users more than
others – investigate why), demographics of your fans – what
countries are they from, what gender and age are they, this infor-
mation could be used in other marketing activity to focus on a
particular target market.
Track E!ectiveness
Research tools available to track the e!ectiveness of all your
activities. One suggestion is http://bit.ly/ a tool that shortens,
shares and tracks your links – great for Twitter posts but also
analysing who is clicking on links.
Summary

Social media is becoming a key component of marketing for events and social
networking sites such as Facebook and Twitter have the ability to spread the
word about your event with low financial investment. Understanding how you
can leverage your presence is critical but the main thing is to have a presence
and begin utilising the potential as a sales channel.

For more information on setting up your own Facebook ticketshop to sell tickets
to your event please visit www.ticketscript.com

………
Increase Your Event Ticket Sales Through Facebook

This is my soccer teammate Victor’s 5 year old son Nefy Ruiz

Nefy Ruiz Fundraiser

Please help Nefy, his mother & sister.
5 year old Nefy Ruiz, an American-Born citizen, lives with his mother Claudia Ruiz and sister Wendy Ruiz in Veracruz, Mexico. You have probably heard about the deaths & kidnapping caused by Mexican drug wars. During numerous occasions an unknown man attempted to kidnap and hold Nefy ransom. On the 10th attempt the man nearly succeeded if not for the assistance of a brave neighbor who intervened and rescued Nefy from his would-be kidnapper. Nefy and the rest of his family are currently under hiding and this little boy is one airplane ticket away from reuniting with his father, Victor Ruiz who works two jobs and resides in Crystal Lake, Illinois.

We are also asking for help in raising funds to assist his mother and sister who are struggling financially and are in the process of gaining Visas. In these days of ever increasing awareness of border security this family wants to be reunited legally!

I have already sent a personal donation.

Please send donations in forms of cash or checks by mailing them to the address used for collecting money to be deposited in a special account setup at Chase Bank. :

Nefy Ruiz Fundraiser
P.O. Box 7295
Algonquin, IL, 60102

For more information please contact Veronica Camacho at (815) 354-7767 or email us at nathancamacho10@hotmail.com

Please visit our site on FaceBook http://www.facebook.com/home.php?sk=group_190238311025844

We deeply appreciate any and all help given to us, please spread the word and thank you for your time.

The Durbin Amendment Explained

The Durbin Amendment, a last-minute addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has sparked fierce debate. [Update June 20th, 2011: A recent challenge to the Durbin Amendment, mounted by Senator Jon Tester (D-Montana), would have delayed the regulations by a year while the Federal Reserve studied their effect on small banks and credit unions. While the bill gained 54 votes in the Senate, it fell short of the 60 votes needed to end a filibuster. Now that the Durbin Amendment will be implemented as planned, banks and card networks are scurrying to replace lost revenue while mounting court challenges.]
The amendment is rather complex, but the two provisions that are still being debated, pending the Federal Reserve’s July 21, 2011 decision, are:
1. A cap of 7 to 12 cents on most debit card swipe fees, a decline of about 80% from present levels
2. The introduction of competition, by giving merchants a choice as to which debit network they process transactions over. For example, present arrangements effectively force merchants to process many Visa transactions over the STAR network, even if competitors like PULSE and NYCE offer to conduct the same transaction at a lower processing price.
The provisions that are already in place include:
1. Merchants can impose a $10 minimum on credit card transactions (this number can be adjusted by the Fed as they see fit). Previously, Visa and MasterCard banned this practice in their merchant agreements.
2. Merchants are allowed to give discounts at the register to those who pay with cash or debit cards. Previously, Visa and MasterCard banned this practice in their merchant agreements.
Banks and credit unions are against the amendment, because debit card swipe fees mostly accrue to the financial institution that issued the debit card. Card issuing banks typically take in about 1.3% of every dollar you spend on your debit card, as a fee from the merchant. This amounts to nearly $3 billion a year of very high profit margin revenue for Bank of America, for example, a number which looks to decline by ~80% unless Congres, the Department of Justice, or the Federal Reserve intervenes.
This fee is supposed to cover the risk of fraud, transactional costs, and other overhead, but due to the lack of negotiating power on the merchant side, the fee is now a major source of profit margin at every bank that offers checking accounts. Subsequently, competition between banks has caused this profit center to be used in subsidizing free premium services, like free checking accounts and surcharge-free ATMs. If this fee were to drop to 7-12 cents per transaction, as proposed by the amendment, this would create a large wealth transfer from debit card issuers to merchants, and will likely end many free premium services at banks.
The amendment’s supporters in Congress theorize that the wealth transfer from the banks to the merchants will result in lower prices for all consumers, as competitive forces between merchants force them to pass on lower costs to customers, in the form of lower prices.
Protecting The Little Guy, Fail
The swipe fee cap technically exempts financial institutions with assets of $10 billion or less. In theory, this exempts all but 3 out of the 7,000+ credit unions. However, credit unions are aggressively lobbying against the amendment. They fear that the provision requiring multiple network routing options will make the small bank interchange cap exemption impossible to enforce. For example, Visa already promised to honor the two-tier pricing system, and would process a small institution’s transaction at the current price. However, the networks are not required to differentiate between large and small banks. Even if Visa’s STAR network offered to route a debit transaction at the “exempt” 1.5% debit interchange rate, the existence of a competitive option allows the merchant to route the transaction through NYCE instead for 12 cents. Therefore the credit union would receive some fraction of 12 cents for the transaction, rather than ~1.3% of the transaction.
The Visa-MasterCard Duopoly
Proponents of the amendment allege that merchant interchange fees have skyrocketed relative to the cost of processing the transactions. The interchange market is largely uncompetitive: Visa and MasterCard effectively set the interchange fees for all merchants. Merchants can choose not to accept Visa and MasterCard, but this is not practical for most. The Durbin amendment’s attempt to reduce prices is two-pronged: first, the mandatory introduction of competition, and second, a limit to fees in order to correct for the market failure resulting from what is essentially a duopoly.
U.S. swipe fees are, overall, uncompetitive when compared to European countries, where anti-trust regulation has broken the chokehold of Visa and MasterCard. U.S. debit interchange fees are higher than the European Union average but not egregiously so; the true effect of uncompetitive pricing is seen in the interchange fees charged on credit card transactions, where the U.S. is by far the highest.
Most notably, the fees on some premium credit cards diverged greatly from the rest of the industry in conjunction with the 2007 IPO’s of both Visa and Mastercard, likely because of pressure to juice profits for public shareholders:

Onerous credit fees are ignored
Because of the difficulty of differentiating prices for goods based on the method of payment, merchants generally factor the exchange fees into the sticker price, or absorb the cost themselves. As a result, whether a consumer pays with cash, debit, credit or rewards credit, he will see the same price (one exception is in gas prices, where the limited number of products offered allows for price differentiation). However, merchant exchange fees for credit cards, and rewards credit cards in particular, are significantly steeper than debit card fees.
One feature of monopoly pricing is that the card network can, as much as they are able, set different prices to maximize how much it believes different groups will pay. So, for example, a Visa Signature Preferred rewards card nets a 2.5% interchange fee at a restaurant (which has little bargaining power), while a Visa Classic transaction may cost a large supermarket only 1.15% (because Visa wouldn’t want to risk, say, Wal-Mart walking away). By comparison, in France, a credit card with an embedded security chip costs all merchants 0.22% of the transaction plus 10 Euro cents, while the least secure (and thus most expensive to cover) method of payment costs 0.3% plus 10 Euro cents (there is virtually no difference by way of fees with Visa versus MasterCard). The intricacies of pricing, and the emphasis on the lucrative, oft-used reward credit cards, speak to market inefficiencies.
Are the fees necessary to fund fraud protection?
The major card networks allege that the interchange fees are necessary for fraud protection efforts, and to limit consumers’ losses in case fraud does occur. However, improving technology should have driven down the cost of fraud protection, not increased it. Jamie Henry, Wal-Mart’s director of payment services, argued that credit card issuers have deliberately kept chip-and-PIN technology from U.S. cards because security improvements would remove the justification for high merchant exchange fees. “Lower interchange would push the industry toward chip-and-PIN. We would see more financial institutions become interested in controlling fraud. It would be more difficult to pass [fraud] costs on to merchants.”
In response to proposed regulation, banks cry foul and threaten tightened credit, higher fees and steeper interest rates should the proposed regulations take effect. Some have also threatened per-transaction spending caps on debit cards, at $50 or $100, rendering debit effectively useless in paying for groceries, restaurants, or plane tickets, and driving customers toward more lucrative credit cards.
However, not-for-profit credit unions are also stalwartly opposed to the amendment, and for much the same reason: they fear that they will have to cut services or increase fees in response to an increased bottom line. They may have more substance to their claims than for-profit banks.
How Durbin hopes to ease the burden on consumers and merchants
The Federal Reserve believes that merchant exchange fees far exceed the cost of fraud protection. They further believe that the steep markups persist because the two major card networks, Visa and MasterCard, have such control over the credit and debit card markets that merchants, card issuers and consumers have no choice but to accept the prices that they set.
In order to correct this, the Fed proposed a cap that it believes accurately reflects the true cost of securing the debit cards used. If they have correctly judged the cap, banks will not suffer a loss to their bottom line, and will continue to provide the same services to consumers while merchants are able to offer better prices. They also introduce competition to previously monopolistic markets by requiring each debit card to be covered by at least two networks. However, the amendment fails to address credit card interchange fees, which are significantly higher than debit.
Although the regulations make an exception for small institutions, this exemption is meaningless as card issuers will have to accept the lowest exchange fee offered, whether or not it covers their security costs. This is an undue burden on credit unions, which are generally smaller and pay more to protect their customers.
This is not to say that the “swipe” fees are grossly overpriced, and that government reform of the market will not benefit consumers. However, the Federal Reserve must be careful to preserve the advantages offered by credit unions.
The following infographic, which we released last April, gives further details about how interchange fees affect merchants and banks:

You might like:

Why the Durbin Amendment will Increase Credit Card Fraud

Chase Revives Debit Rewards Program after Durbin Amendment Delay

Latest Threat to the Durbin Amendment: A $100 Spending Cap on Debit Cards

Durbin Interchange Amendment: Precursor to $132 Annual Fees?

June 10, 2011
Senate Ruling on the Durbin Amendment
Information Details:
The US Senate voted Wednesday to allow the Federal Reserve to implement the $0.12 interchange on debit cards for large banks which was proposed in the Durbin Amendment. Large issuing banks/credit unions of a designated size would have this rate applied to debit card transactions while smaller issuing banks/credit unions would continue with the current debit card interchange rates. Given the complexity of the amendment, defining the rules for “large” banks and/or credit unions will take more time and the Federal Reserve is expected to provide additional guidelines by July 21, 2011.
We anticipate the Card Brands will release information after July 21, 2011 when the Federal Reserve provides rules and guidelines for implementing the $0.12 interchange on debit transactions.