1099 reporting fees
I am so disappointed at companies charging merchants $4.95 a month for collecting the data for 1099 reporting. It is my understanding from your article that the IRS does not allow this. While I understand it's a new regulation and extra work on the merchant service providers and acquirers, why is someone not policing our industry? When is it going to stop?
First Data Merchant Services is charging $4.95 a month per merchant. Considering the size of the FDMS merchant book, this is becoming a money-maker for them. They should be ashamed of themselves and investigated. I can understand a minor monthly fee of some kind ($1.00), but this is highway robbery. The merchants are becoming more and more aware of our industry, and with fees like this, it's going to put an even bigger damper on our industry.
Bruce I. Reisman
Focus Financial Solutions LLC
Thank you for sharing your opinion on this important issue. First Data Corp. spokesman Andy Payment confirmed in an interview for "IRS says no merchant fees for 1099K reporting: Who's listening?" The Green Sheet, Aug. 22, 2011, issue 11:08:02, that First Data instituted a fee "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 also indicated First Data's pricing is tiered from $3.95 to $1 per merchant per month, based on the number of merchants in an ISO's portfolio. Some ISOs are adamant they will not charge merchants for 6050W compliance. Payment professionals are indeed divided on whether charging new compliance fees will serve the long-term interests of individual payment companies and the industry as a whole.
From GS Online's MLS Forum
The premier online network for payment pros
GS Online MLS Forum member JDECKARD asked GS Online's MLS Forum for help understanding the ISO registration process. He said, "Let's say I have ISO A, who I prefer to send my everyday, vanilla, brick-and-mortar merchants to; ISO B, who I like for e-commerce/POS systems; and ISO C, who thinks outside the box and will take higher risk merchants. If I step up and register once, say through ISO A, can I still contract with all three ISOs to provide the same service, but branded with my info? Or do I have to send all deals through the ISO that I registered through?"
Here are some of the responses JDECKARD received:
To see all the responses to this question, click on the "Understanding Registering" thread in the MLS Forum, which can be accessed via the Forums link at www.greensheet.com.
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