Spring Release 2011
Important IRS requirements for 2011
Effective January 1, 2011, all Obligated Reporting Entities are required to report your gross reportable sales to the IRS and file an annual information return (per Section 6050W of the IRS Code). To comply with this new law, we must ensure that your Taxpayer Identification Number (TIN) and the Tax Filing Name for your business matches the information on our system.
What does this mean to you? You will receive an annual 1099-K from us beginning in 2012 for transactions reported in calendar year 2011. Effective January 1, 2012, if your legal filing name and/ or Tax Identification Number (TIN) on our system does not match the IRS database, your merchant account may be subject to IRS withholdings of gross settled transactions at the current daily rate of 28% until the discrepancy has been corrected. If you are entitled to a reimbursement, any withheld amounts will be reimbursed by the IRS with your annual tax filing the following year.
To avoid such actions, we are actively working with the IRS to validate the information we currently have on file. If we have not been able to match your Tax Filing Name and/or the Tax Identification number, we will notify you and request that you take immediate action by correcting the identified discrepancies. If we are able to validate all of your information, then no action on your part is necessary.
PIN Debit Network Routing
The PIN Debit network used to process your transaction will depend upon, among other things, the availability of the PIN Debit network at the time of the transaction, whether a particular PIN Debit Card is enabled for a particular PIN Debit network and the routing requirements established by the PIN Debit networks and the Issuers. We may, at our sole discretion, utilize any PIN Debit network available to us for a given transaction.
MasterCard® Worldwide OPERATIONAL and RATE CHANGES
I. MasterCard Processing Integrity Fee — Effective June 14, 2011, a MasterCard Processing Integrity Fee will be assessed at $0.045 per item. This fee will be applied to authorized transactions that are not followed by a matching MasterCard cleared (settled) transaction (or in the case of a canceled transaction, not properly reversed). The fee can be avoided by clearing (settling) your transactions within 120 days. If an authorization is not needed, the authorization must be electronically reversed within 24 hours for face to face authorizations and reversed within 72 hours for Card absent authorizations. If applicable, this fee will appear beginning with your June month-end statement that you will receive in July.
II. Account Status Inquiry Fee — Effective June 14, 2011, an Account Status Inquiry fee will be assessed at $0.025 for US Issued Cards and $0.03 for Non US Issued cards. This fee will be applied to an account status request without an actual dollar authorization (with or without AVS/CVC2). This fee can be avoided by obtaining an authorization request for the amount of the sale. Additionally, a status check request with an amount greater than zero dollars will become prohibited with the exception of Automated Fuel Dispenser (AFD) merchants (MCC 5542). If applicable, this fee will appear beginning with your June month-end statement that you will receive in July.
III. Fleet Data Requirement Enhancement — Effective April 15, 2011, MasterCard will require the Driver Number/ID Number or Vehicle Number submitted in the authorization request match the same data submitted into clearing (settlement) for all MasterCard Fleet cards used at a fuel location. If the submitted information does not match, the transaction will qualify at Data Rate I. Fuel locations are defined by the following Merchant Category Codes (MCCs):
- Marinas (4468)
- Service Stations (5541)
- Automated Fuel Dispenser (5542)
- Convenience Stores (5499)
- Fuel Dealers (5983)
- Truck Stops (7511)
IV. Changes to Partial Approval Functionality — Effective April 15, 2011, MasterCard will allow issuers to provide a partial approval response that is less than or equal to the requested authorized amount. WHAT DOES THIS MEAN FOR ME? If you receive a partial approved authorization amount less than or equal to the submitted authorization amount, you will be unable to add any additional amounts to the transaction, such as tips. If a tip should be added to the transaction amount, another form of payment will need to be requested (split tender).
V. New Interregional Super Premium Card Interchange Fee Program — Effective April 15, 2011, MasterCard will introduce a new Interregional (i.e. U.S. Merchant / Non U.S. Issued Card) Super Premium consumer card interchange rate structure. The new rate structure will differentiate interchange from the existing premium consumer Interregional rate structure and increase global recognition of the MasterCard Interregional Premium card brand products.
VI. Travel Industries Premier Services (TIPS) Program Expansion — Effective April 15, 2011, MasterCard will expand the existing TIPS program to include all eligible T&E Lodging, Automobile/Vehicle Rental, and Cruise Line/Steamship Merchant Category Codes. As part of the expansion, MasterCard will no longer permit transactions from eligible T&E MCCs to qualify for Merit 3, Merchant UCAF and Full UCAF rate programs.
VII. MasterCard Assessment Fee Increase — Effective April 18, 2011, MasterCard will increase the Acquirer Brand Volume Fee (commonly known as the MasterCard Assessment fee) by 0.01% to an amount of 0.12% for MasterCard consumer credit and commercial card transactions equal to or greater than $1,000. The existing fee of 0.11% will continue to be applied to all settled MasterCard consumer and commercial card sales below $1,000 as well as prepaid and signature debit card sales regardless of the transaction amount. This increase will appear beginning with your April month-end statement that you will receive in May.
Visa® U.S.A., Inc. OPERATIONAL and RATE CHANGES
I. New Interregional Super Premium Card Interchange Fee Program — Effective April 15, 2011, Visa will introduce a new Interregional (i.e. U.S. Merchant / Non U.S. Issued Card) Super Premium consumer card interchange rate structure. The new rate structure will differentiate interchange from the existing premium consumer Interregional rate structure and increase global recognition of the Visa Interregional Premium card brand products.
Receipt Truncation Requirements
If your terminal is not compliant with applicable federal and state law as well as Card Organization rules, your business may be subject to significant fines or other penalties. The receipt you provide to a customer may not include the customer’s card expiration date or any more than the last four digits of the customer’s card number. In addition, some states, as well as Visa and MasterCard have similar laws and requirements that apply to the receipt your business retains.; If you believe that your terminal needs to be upgraded to comply with these requirements, please contact the customer service phone number listed below.
PCI PED & Triple DES (PIN encryption)
Visa/Interlink announced a mandate requiring all merchants accepting debit cards to use a PIN entry device (PED) that supports enhanced encryption, referred to as Triple DES (Data Encryption Standard), by July 1, 2010. As a result of this mandate, all PIN entry devices considered non-compliant will need to be replaced with a compliant PIN entry device. If your PIN entry device has not been replaced within the last two years, please contact the customer service phone number listed below.
Payment Applications DSS
Visa implemented a series of mandates to eliminate the use of vulnerable payment applications from the Visa payment system. As of July 1, 2010, these mandates require us to ensure our merchants do not use payment applications known to retain sensitive cardholder data (i.e., full magnetic stripe data, CVV2 or PIN data) and the mandates also require that payment applications are compliant to the PA-DSS.
Other Information
Please note that the Card Organizations have made changes to their interchange programs and rates. Effective April 15, 2011, the interchange rates for credit card and non-PIN (signature) debit card transactions applied to your account will be as set forth in both the "Interchange Rate/Fee Schedule" and the "Interchange Qualification Matrix" found on www.merchantinsider.com/merchantresources/interchangefeeschedules. The particular interchange rate applied to your transactions will depend on how your transactions qualify. Due to changes in the rate structure and qualification criteria for the various Card Organizations, you may incur an increase in interchange costs and fees beginning on your April statement that you receive in May.