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How Credit Card Processing Works, and Why Fees Vary – Quick Version
Do you know how Credit Card Processing Works, and Why Fees Vary?
Here is the quick version.
Credit card processing fees are a cost of doing business that most businesses and nonprofit organizations can't avoid. In today's virtual world where credit is king (move over cash!), donors and customers often prefer paying with a credit card. As a result, credit and debit card transactions may account for 65% to 100% of your company's sales and be costing you thousands of dollars in processing fees each year or even each month! Read moreTop 5 Question/Answers Regarding PCI Compliance for Your Merchant Account
What is PCI and why does my business need PCI Compliance? 
Ever see a monthly or big annual "PCI" fee show up on your merchant statement? Ever wonder: What is PCI Compliance? How do I become Compliant and what are the benefits? How much should it cost? Why am I paying for this added fee? Is this a scam? Is this just another way for my credit card processing company to make more profit? Read on to find answers to these questions.
1. What is this PCI Compliance I see everywhere?
First off, PCI stands for Payment Card Industry, and is often followed by DSS - Data Security Standards. In a nutshell, Card Brands such as Visa and Mastercard have mandated that ALL MERCHANTS must comply with a standardized set of rules and standards (PCI DSS www.pcisecuritystandards.com) in order to protect cardholder data from breach, fraud, and theft. It is NOT A SCAM. EVERY BUSINESS must be PCI Compliant. That being said, some businesses do take advantage of merchants in order to make additional money off of them. This is where they idea that PCI is a scam comes from. To learn more about the REAL PCI COMPLIANCE, read on... Read moreCard Association Fees – The Good, The Bad, and The Ugly
Intro: Government Regulation Saves Merchants $$$ in Debit Fees
Remember the act Congress passed last Fall dubbed the Durbin Amendment? It saved businesses a ton of money on debit processing fees. This took an estimated $700M out the budgets of the card networks. Card issuing banks retaliated by charging monthly fees to individuals with Debit accounts. This led to public outrage, the media cried, and banks put a halt to that practice. So, back to square one – the banks are suffering a major earnings shortfall estimated at $700M. Read moreWhy your processor’s 1099-K Fee is BS.
**Updated 3/26/12 for mild audiences.
So what is all this 1099-K talk about?
This year, credit card processing companies (like Payline, NPC, First Data, etc.) as well as third-party network payments such as PayPal, Amazon.com and Google are required to report to merchants and to the Internal Revenue Service the gross amount of the transactions they’ve processed. This is due to the Federal Housing Assistance Tax Act of 2008 which included the enactment of Section 6050W of the Internal Revenue Code. This federal regulation will be used to help the IRS identify under-reported payment made to merchants by credit and debit card. The credit card processor is required to monitor your processing volume during the year and submit to the IRS the 1099-K that includes your gross sales for the year as well as a breakdown for each month.Payline's perspective
Because of this change, many processors have seen this as an opportunity to charge yet another fee. These range anywhere from $5-$20 per month to $100.00 or more annually! They are calling this a Regulatory Fee as the IRS made it illegal to charge directly for the 1099-K. Read more
Banks Strike Again! Bank of America will charge $5 monthly fee for debit card purchases
(AP) — Bank of America plans to start charging customers a $5 monthly debit card fee.
The fee will be rolled out starting early next year.
A Bank of America Corp. spokeswoman says customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won't be charged if they only use their cards at an ATM.
Chase and Wells Fargo have been testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to make the fee permanent.
Customers have been seeing higher banking fees and fewer rewards in the past year or so. The changes come as banks adjust to new regulations that will limit traditional revenue sources.
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Payline Data Services, LLC | 225 West Washington Street, Suite 2200 Chicago, IL 60606
PHONE: 800-284-7401 | FAX: 800-660-0318 | Donations made through Payline Giving
Payline Data Services, LLC, a registered ISO/MSP in association with First National Bank of Omaha, Omaha, Nebraska, Member FDIC.
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