Q: What credit card companies are switching to smart cards?
A: All card companies are moving to the smart card (AKA EMV Card) format. Merchants need to accept smart cards by April 1, 2013, and credit card issuers will be switching out cards as they expire. Visa, MasterCard, Amex, and Discover have all created roadmaps for converting to the EMV standard. In time, the magnetic stripe on the back of credit cards may disappear completely.
Q: How do I reprogram a credit card terminal?
A: If a terminal can be reprogrammed, it is generally done with the assistance of the new processor. At CPN, we can let you know if your terminals can be reprogrammed to work with our network. Some terminals are hard-coded to only work with your current processor.
Q: Do credit card merchants report businesses to the IRS? What are the penalties for reporting a wrong amount?
A: Merchants provide a 1099K form to merchants and the IRS detailing the year’s total credit card receipts broken down by month. Penalties for incorrect reporting are up to the IRS, but can be substantial.
Q: How can I accept fleet cards?
A: Some fleet cards are unique to specific gas station chains, but it is possible to add fleet card processing to your account. Because many trucking, transportation, and corporate accounts use fleet cards for fuel and repair expenses, you may want to be certified to accept multiple fleet cards including Wright Express and Voyager.
Q: What is TIN Validation?
A: Taxpayer Identification Number (TIN) Validation is a requirement for 2013 which states that the information you give to the IRS must precisely match what the IRS has on file. If TIN numbers or company names don’t match IRS files, processing companies are required to withhold 28% of the monthly funds that go through the credit card terminal, and this money can’t be returned until the end of the tax year. Capital Processing Network strongly recommends compliance with this rule, since 28% backup withholding on credit card fees might exceed your monthly profit margin.
Q: How much can I save?
A: Savings depends on a number of factors including your business type, how long you’ve been processing cards, and your history of chargebacks and fraud. Low risk businesses can see financial savings with Capital Processing Network. We do not offer high risk credit card processing services.
Q: What is 6050W?
A: IRS section 6050W mandates that all payment processors in the US must report the total gross sales volume of transactions to the IRS. Part of the mandate states that Capital Processing Network, and all other processors, must verify your Taxpayer ID number (which can be an Employer Identification Number (EIN) for corporations or Social Security Number (SSN) for Schedule C filers) and tax filing name. This regulation, passed in 2008, was delayed for a few years but will be a requirement as of January 1, 2013.
Q: What are basis points in credit card processing?
A: A single basis point equals one one hundredth of a percent. 100 basis points equal one percent. In credit card processing, fees and rates are usually given as “XX points over interchange” “XX basis points plus 25 cents per transaction” to designate processing fees. Normally there are several sets of basis points that collectively are added to a base rate in order to determine the cost of processing a particular card.
Q: Where can I buy a credit card machine?
A: Most companies that sell credit card machines online require a processing contract or other considerations so you can “own” the machine. You should only buy a machine if you are certain that it will work with your network and it has not been compromised. Buying a machine also means that you may not get any support with troubleshooting and terminal issues, since there is no warranty on the processor’s end.
Q: How much are used credit card machines?
A: Used credit card machines may be sold online for as little as $10 on eBay and Craigslist but they may be obsolete or completely incompatible with your card processing network. Most of the cheapest used machines are worthless because they are not secure, use an inferior type of encryption, or proprietary to a network that may no longer even exist.
Q: What was the old machine that used to take your credit card?
A: The manual credit card device used in the past was known technically as an “imprinter” but also called a “knuckle buster.” To get a receipt copy, the card was placed below carbon paper, and a roller was used to imprint the card number onto a set of receipts. The danger of this system was that carbon copies of the receipt could be used to steal card numbers.
Q: Why are credit cards so expensive to process?
A: Credit card processing fees are unique to each business. Depending on your company credit rating, history of fraud and chargebacks, and sales volume, you may pay differing amounts for processing. Banks and card associations like Visa set a minimum “interchange” rate and then fees are charged based on the type of card used (miles, rewards, corporate, etc.) in each transaction. Capital Processing Network offers lower rates to qualified clients thanks to its portfolio of low risk clients.
Q: How can I store credit card information for later processing?
A: Offline credit card processing is one way of storing card information for processing, but this needs to be done in a secure manner that encrypts the card number. Storing credit card numbers in a non-secure manner is generally prohibited and can lead to fraud or data breaches. Typically, you also can’t store CVV numbers since the card is not “present” for the transaction.
If you have a question about how much you can save with Capital Processing Network, whether we can reprogram your terminal, or what options we have available for payment processing, please feel free to contact us at 1-877-456-9747 or online at CapitalProcessingNetwork.com/contact.htm