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PCI Security Standard

The PCI Security Standards Council is an open global forum for the ongoing development, enhancement, storage, dissemination and implementation of security standards for account data protection. The PCI Security Council's mission is to enhance payment account data security by driving education and awareness of the PCI Security Standards. The organization was founded by American Express, Discover Financial Services, JCB International, MasterCard Worldwide, and Visa, Inc.

The PCI DSS is a multifaceted security standard that includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures. This comprehensive standard is intended to help organizations proactively protect customer account data.

The PCI Security Standards Council will enhance the PCI DSS as needed to ensure that the standard includes any new or modified requirements necessary to mitigate emerging payment security risks, while continuing to foster wide-scale adoption.

Ongoing development of the standard will provide for feedback from the Advisory Board and other participating organizations. All key stakeholders are encouraged to provide input, during the creation and review of proposed additions or modifications to the PCI DSS.


PA-DSS stands for Payment Application Data Security Standards. Mandates are in place to ensure merchants and agents do not use payment applications known to retain prohibited data elements, such as track data, CVV2 data, and/or PIN data.

Why is Compliance Important?

PCI Compliance provides fraud protection for you and your customers by creating a business that is safe and confidential for cardholders to use their credit cards. NON Compliance makes you vulnerable to fraudulent activity and data breaches which result in cost prohibitive fines and severe loss of brand equity.

PCI DSS compliance is mandated by the card associations. The standard is overseen by an independent council of the five major brands. For more information, and all the facts please visit: www.pcisecuritystandards.org


New IRS Merchant Reporting Requirement of the Federal Housing Assistance Tax Act Section 6050 W

In January 2011, the IRS enacted section 6050W, an amendment to the Federal Housing Assistance Tax Act of 2008. This IRS mandate requires all merchant service providers to validate the legal name and Tax Identification Number (TIN) for every merchant in their portfolio, and report to the IRS all annual revenues associated with these accounts.

To comply with this government mandate, your merchant processor is required to:

  • Submit to the IRS the legal business names and tax ID numbers for all of our merchants, and ensure that these records match those in the IRS database.
  • File a return with the IRS no later than January 2012, and annually thereafter.
  • Provide all merchants who accept electronic payments an annual 1099-K form reporting their monthly and annual gross sales income during the previous calendar year.
  • Withhold income tax (currently 28%) from the gross sales amounts of merchants whose TIN records do not match IRS records by filing date, January 2012.

The components of this program are as follows:

TIN Matching.

  • Your merchant processor must annually submit to the IRS the legal business names and tax ID numbers (TINs) of all its merchants.
  • Merchants with unmatched records will receive notification from their processor with instructions for correcting the missing or mismatched information, and a timeframe to correct/update this information to avoid penalty fines.
  • As merchants update and correct unmatched TIN information, the processor must continually submit this information to the IRS until the correct information is validated.

IRS Reporting.

  • In January 2012, and annually thereafter, the processor must file an annual return with the IRS reporting all payments in settlement of Visa/MasterCard/Discover cards and third party network transactions.
  • At the same time, the processor will complete and mail a 1099-K form to all merchants in our portfolio who have accepted electronic payments in 2011. This form will report all monthly and annual gross sales income based on the 2011 calendar year.

Withholding

  • If a merchant’s legal name or Tax ID number in VIMAS does not match IRS records, the processor must, beginning in January 2012 and at the instruction of the IRS, perform backup withholding from merchant funding by deducting and withholding income tax (currently 28%). Merchants subject to Federal income tax backup withholding may also be subject to State tax withholding.
  • These funds will be held by our Sponsor Bank and released only when notified by the IRS to do so. The processor has no access to, or control over, these withheld funds.
  • All businesses with missing or unmatched TINs have been mailed written notification from their processor, and must comply with the requested information by the required date or time frame to avoid penalties, and funding withholdings.

Information Source: 1cynergydata.com/government-regulations/


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