All independent sales agents know the dedication and frustration that comes along with growing and retaining merchant accounts. You have to have thick skin, tenacity, flexibility, and stamina. But, while acquiring new merchant accounts or maintaining current accounts are challenges in and of themselves, the recent influx of sales reps, and even other payment service companies, into the market have made things more difficult by increasing competition.

Add on top of that recent advances in new technology. For ISOs and bankcard agents, “new technology” covers a spectrum of products including agent digital marketing and agent-specific software programs, as well as new payment products for the merchant himself, such as avant-garde payment options, like contactless payments.

Interestingly enough, the introduction of this new technology is actually dividing the saturated, competitive sales rep market into two: those who are embracing new technology and those whose are ignoring it. At this pivotal crossroads in the merchant services industry, utilizing new technology to accommodate businesses will make all the difference.

At the dawn of merchant service sales reps, sometime in the 1990s, agents walked merchant to merchant, selling terminals and hand writing merchant accounts. Unfortunately, many sales reps still function this way. According to PaymentsSource, the fact that a sales rep has 10+ years experience writing applications is now irrelevant in the industry; what is relevant in the industry is using available resources to best accommodate merchants. That is the enduring key to being a successful independent sales rep: utilizing the best resources available; and, right now, the most prominent resource available is new technology.

The most important new technology that ISOs and agents must embrace to stay competitive is the new payment technology. With the advent and growing demand for POS and contactless payment systems, for example, any sales rep worth his salt should be offering these options to his merchants. The fastest, most user-friendly (and certainly best looking) POS and Mobile systems available today are hands down provided by Clover. If you are not learning about the best, most cutting-edge payment solutions, like Clover systems, and offering such solutions to your merchants, you will fall by the wayside.

It may seem easy and obvious, but many sales agents do not offer the newest payment technologies to their merchants. This issue is particularly troubling when considering that agents now have additional competition with companies like Square, Groupon, and Amazon.com, each of which offers some mode of merchant-processing service or equipment using the Internet as a primary distribution channel, according to Digital Transactions.

Many agents are finding themselves “cut out completely when a merchant uses a cloud-[based] or tablet-based POS system that has been sold directly to the merchant,” payment processor Greg Cohen told Digital Transactions. Merchants are attracted to these systems, Cohen added, because the systems offer applications beyond payments, such as online marketing and business-management tools. But, he added, that makes it difficult for a sales agent to compete.

These systems also present the added problem of online competition because not only do these systems provide merchants with simple processing and online tools, they also have a daunting web presence as the very service they provide is an Internet-based one. This moves us into the second big issue sales representatives must tackle: digital marketing.

From search engines optimization to social media, digital marketing efforts are becoming the fastest way to get merchants to find you. According to a study released in 2014 by Adil Consulting, part of the immense growth by POS software companies is due to the digital marketing efforts POS software companies invest in, compared to ISOs and/or agents. 

“The difference in this focus is the biggest clue as to why POS software companies dominate Internet marketing,” Consulting Principal Adil Moussa stated in the report.

Luckily, while sales reps may find themselves having to learn their trade anew as modified by new technology, the introduction of new technology has also brought about tools that can help bankcard agents. Some of the growing trends in agent-related tools include software that allows for managing an entire portfolio, bundle services to increase merchant conversions, financing software that allows agents to process and track alternative financing, and more. Many POS Systems are even designing their systems with more functions for merchants, so agents will recognize that offering POS systems with more features gives them a competitive edge (which, consequently, comes back full circle to the first issue discussed in this article about the importance of offering the newest payment solutions).

Of all the solutions available for the forward-thinking sales rep, one in particular offers a unique additional feature: the ability to submit a merchant application, receive the MID and TID, and get that merchant accepting card payments all within 2 hours. This sales agent tool is called ISOCentral, and it is an Android-based app introduced by Merchant Service Group LLC in February of 2015. ISOCentral distinguishes itself from other agent tools with several important features: real-time account statuses, account push notifications, direct communication to underwriting and technical support teams, and, of course, speed. This app is offered for free on Google Play..

While using new technology should not eliminate or reduce agent face time with the merchant, that aspect will likely always be vital, the new technology can help agents stay competitive, sign merchants easier and faster, and manage their portfolios better. And, as the payments industry barrels into the future, those agents who ignore new technology will fall by the wayside, and those agents who embrace the new technology will succeed.

For more information, please email us at hello@merchantservicegroupllc.com

With only several months until the mandatory deadline, the new Europay, MasterCard and Visa (EMV) chip and pin standards have been met with dismal compliance by U.S. merchants, and recent news reports that EMV could actually increase application fraud are not helping.

The new EMV standards, which US businesses must comply with by October, are supposed to increase security against credit card fraud. Any merchant who fails to implement the standards will be subject to a counterfeit card liability shift. However, recent reports hypothesize that EMV may actually increase fraud. The United States is one of the last countries to deploy EMV, but the accounts of EMV use in other countries report that while card fraud was reduced, application fraud skyrocketed.

Vice President of Business Solution Group of the Americas at BAE Systems Applied Intelligence Dena Hamilton told the Credit Union Times that statistics from EMV rollouts in the United Kingdom, the Asia-Pacific, and Canada show a 300% to 400% jump in application fraud.

“Application fraud rises because it is perpetrated by identity theft.” Hamilton told Credit Union Times.

Credit card application fraud occurs when a fraudster uses stolen identity information, such as social security numbers, to open a credit card account in the victim’s name. Application fraud can cause the victim debt, negative credit ratings, and sometimes even bankruptcy.

This is particularly concerning when considering that the United States already “leads” the world in global payment fraud. According to research service BI Intelligence, the U.S. accounted for nearly 51% of global payment card fraud costs in 2013. In fact, the Bureau of Justice Statistics reported that an estimated 7.7 million United States citizens reported the fraudulent use of a credit card in 2013. Payment technology leader First Data notes on its website that credit card fraud losses topped $10 billion in 2014.

In her statements to the Credit Union Times, Hamilton noted that “[t]he U.S. has $3 billion in losses associated with the card-present fraud [alone], when we roll EMV out where is that fraud going to migrate to? The fraudsters are not going to give up that type of income.”

Time will tell whether the EMV standards will increase application fraud, but regardless, U.S. merchants must still comply with the standards by October 1, 2015 or face the wrath of the liability shift, which would hold merchants, not credit card issuers, liable for any fraudulent chip card transactions on non-EMV compliant terminals.

According to the EMV Migration Forum, roughly 120 million Americans have already received an EMV chip credit or debit card and forecasts that 575 million chip cards will be issued by the end of 2015. On their end, many merchants have yet to implement the new standards, and the Huffington Post printed a recent report which noted that about 49% of small business owners were completely unaware of the liability shift altogether.

So far, about 59% of U.S. businesses with point-of-sale (POS) devices are now expected to be EMV compatible by the end of 2015, according to the Aite Group.

Despite potential complications, all merchants should implement these standards before the October 1 deadline, because their business could face immense costs if they become subject to the liability shift. The use of newer pinpad equipment and POS systems are now being strongly encouraged by merchant service companies, as POS systems are readily accepted as the best payment processing technology by the industry, and they come preinstalled with EMV-compliant chip and pin functions, including older POS systems.

Contact your processor to learn more about the mandatory compliance and whether your business meets the EMV standards. Some merchant service providers, such as Merchant Service Group LLC, offer their merchants free upgrades to make EMV-compliance. To see if your equipment meets the standards, check this list.

For more information, please email us at hello@merchantservicegroupllc.com

When it comes to running a small business, there’s little room for error. Because it can take years to generate a profit, you’ll want to save on your expenses in whatever ways you can. But there are some things you shouldn’t cut corners on, including your payment processing technology. Selecting the right system allows you to do more than just accept credit cards—it’s an investment in technology that can help you manage your business and increase your profits. Here are a few examples of how.

Drive down operational costs

POS and software systemscan help streamline your operations and improve your business’s efficiency by offering tools for inventory management, scheduling, and more. These systems can help eliminate human error and drive down added costs.

Understand your customers better

The right technology can help you locate trends in your business by compiling your data and breaking it down into reports that show your best-selling items, monthly sales trends, and more. Having access to this kind of information, along with tools to connect with your customers, can improve how you market and sell your business.Offer greater payment options

As technology increases, your customers may opt for newer payment options due to their convenience and added security. In order to stay competitive, it’s important to offer your customers the option to use advances in technology like digital wallets, recurring billing, and even in-store gift cards to foster loyalty and repeat business.

Expand your business online

Adding an ecommerce site can increase your customer base and allow greater exposure to your business. A professional looking website where your customers can learn more about your business and products can add legitimacy to your business, and a functional website that allows online payments is faster and more convenient for you and your customers.

Merchant Service Group LLC can assist businesses who’ve been told that an online merchant account isn’t possible. We offer a higher approval rate in boarding Ecommerce accounts for businesses that may be considered high risk, such as travel, firearms, e-cigarettes, and more.Save on processing fees

Selecting the right equipment for your business can even save you money on your processing fees. If you specialize in business-to-business or business-to-government, using a payment gateway can lower the Visa/Mastercard interchange rate you are charged for corporate and GSA cards.

Merchant Service Group LLC offers technical expertise to advise and help set up whichever solution you choose. Our payment solutions integrate seamlessly into POS and Gateway systems so that you can take advantage of the benefits of the equipment while leaving the payment processing to us.

For more information, please email us at hello@merchantservicegroupllc.com

If you accept card payments, which you most likely do, then you know you must file a Form 1099-K to the IRS; but what you may not realize is that your payment processor can actually assist you with this confusing document, as well as other mandatory tax forms. Conversely, if you have a sloppy processor, you may find yourself in a world of hurt with the federal government…read on to learn why.

The Payment Card and Third Party Network Transactions 1099-K Form and You

Form 1099-K, the “Payment Card and Third Party Network Transactions” form, is a federal tax informational return introduced in January 0f 2012. Though businesses have been filing this form for four years now, it is still a confusing document to many merchants.

A participating payee, according to the IRS is “any person who accepts a payment card as payment, or any person who accepts payment made by a third party settlement organization on behalf of the purchaser or customer.” Basically, that means if you or your business earn revenue processed through a merchant service company, then that income must be reported to the IRS.

You May Face Harsh, New Penalties if Your Processor Messes Up

If you had more than 200 total transactions exceeding $20,000 paid through an electronic payment service in a calendar year, then your payment processor is responsible for sending you your 1099-K. However, they are only required to report your total gross sales, and a careless processor could report your total gross sales incorrectly. The “gross amount” is the total unadjusted dollar amount of the payment transactions which is not adjusted to account for any fees, refunds, or other amounts.

If the information on the 1099-K is incorrect, then the IRS may send you, not your processor, a letter of “Notification of Possible Income Underreporting” which could later result in a pre-audit or formal business audit and assessment for underreported income, as stated by entrepreneur.com.

Furthermore, under IRS 6050W, your processor must verify that their files reflect the correct Tax Filing Name and Taxpayer Identification Number (TIN, which might be your SSN) for your business. This means that the IRS strictly expects the information your processor submits on your 1099-K to be accurate and matches what the IRS has on file for your business.

Unfortunately, even a simple error like a name misspelling can invalidate your 1099-K. If this occurs, the IRS will actually contact your processor and inform them to hold the merchant funds until the information on the 1099-K is corrected. This cannot be emphasized enough: THE IRS WILL ORDER YOUR PROCESSOR TO WITHOLD A PERCENTAGE OF YOUR BUSINESS CARD SALES FOR AN UNDETERMINED AMOUNT OF TIME. Your processor must withhold a flat 28% rate until corrections are made, as stated by the IRS. Prevention of 1099-K and other tax document errors, therefore, is obviously the best method.

How Your Processor can Help You with Your 1099-K and Other Tax Forms

It is vital to you and your business to submit timely and accurate tax information. That may sound simple enough, but every year businesses all across the country receive notices from the IRS. To err on the side of caution, you should match the gross amount your processor reported on your 1099-K with your own merchant financial records. Do not hesitate to contact and work with your processor prior to tax filing time; any processor worth their salt will be more than happy to inform and help you, and if they do not, then that is your sign that your business would be better off in the hands of a competent merchant service provider.

Your processor should verify your correct TIN, legal name, and other necessary IRS business tax record information for accuracy. Correct information is key to preventing future IRS backup withholding on payment card and third-party network transaction gross amount receipts. In fact, much of this information, such as your TIN and legal name, is important for you small business tax filing in general, which can include income tax, estimated taxes, self-employment tax, employment taxes, and excise tax forms, depending on your type of business.

Furthermore, many reputable merchant service providers actually offer monthly, quarterly, or annual sales transaction reports that can simplify business tax filing and avoid common merchant tax problems. While it may be too late for this tax season, there is definitely time to implement such solutions for the remaining 2015 business year and reap the benefits for next year’s tax season. Work with your credit card processor to find out the best solutions available for your business.

For more information, please email us at hello@merchantservicegroupllc.com