The way I set this up in my accounting system was to pile all first data deposits into an asset clearing account, create a bill to pay the client, and then record a payment from that clearing account. Since the IRS only sees income & expenses, I can understand the trigger for the CP2000. I didn't see a logical way to report this activity on my return.
I guess I need to write a short letter explaining it, saying I don't do it anymore, and include highlighted bank statements of the money coming in, and the money going back out. Unfortunately I don't have tax numbers for the clients.
I'm a Stripe connect application provider, and I get hundreds if not thousands of "Zip code failed validation" decline errors - primarily affecting Canadian customers. The decline rate is too high in my opinion to be user-error.
When you have postal code check on, the cardholder's bank checks to see if the postal code you collect matches the one they have on file—these results are passed directly from the bank. While we can't control the bank's decision to decline a charge, we work hard to improve decline rates for both individual businesses and across Stripe—we'd be happy to take a look into your integration to see if there's anything amiss. Could you get in touch with me at edwin.wee@stripe.com?
I use both. Braintree for SaaS income (monthly, one-off, client contracts), and Stripe for marketplace payments (Stripe Connect - event ticket sale service fees). It works well, and helps me reconcile the income easier into separate clearing accounts that I set up with Xero. I was originally enticed to Braintree because of the first free $50,000 of processing. I have been very happy with both.
Odd they didn't mention performance improvements in the blog post. From my understanding, there have been some massive gains (of which, some commits date back to early '15!) One of them which has been killing me, is that model schemas were not preloaded on app boot, which led to the first few dozen requests (depending on how many workers you have on Puma) perform 100+ sql queries and add over 1s to response times. Not only were they not preloaded, but they were not cached across ActiveRecord::Base.connection's
-We have a high volume of payments with low margins.
Based on this alone, you need to get your own merchant account and gateway. I highly recommend Beanstream in Canada for the gateway. A proper merchant account (interchange plus pricing, either Chase Paymentech or TD are good) will boost your margins. For example, processing a debit card has a much lower interchange rate than a credit card (I don't think the rate is as good as the USA, but its still 1%+ difference).
Beanstream will also give you the option of Interac Online - which is a flat transaction fee between 20-50c.
I noticed that TD had a white label solution for Beanstream on their site. Would it be better to go through TD and snag a merchant account in the process or to Beanstream directly?
Thanks for bringing up beanstream by the way. I saw them earlier but hadn't considered them as everyone mainly favoured Braintree or Stripe. Being able to process Interact Online is a boon.
I've actually talked to TD about that before. You'll most likely get better rates by going to TD directly - one less middleman... but working with Beanstream can also have its perks. If you are doing any aggregation (marketplace payments) then you will definitely need to get the merchant account from Beanstream as TD won't take on that kind of risk. TD does not seem to offer true Interchange+ pricing either. Chase Paymentech does (I was quoted interchange + 5 cents). If you have the time and energy, I would get the MA from Chase, and the gateway from beanstream.
I wish the pricing was more competitive. In the US, I've used Beanstream - which is $5/mo + $0.25 flat per transfer. In Canada I've used Versapay - $0/mo + $1 per transfer.
With that kind of volume, you should go straight to a big bank - like Chase Paymentech or First Data - and getting interchange plus rates. Then you can plug your merchant account into whatever gateway you want that has the best API docs, such as Authorize.net or Braintree (I don't think Stripe supports bringing your own merchant account). Curious why you went with an ISO? Risk-related - TPPA maybe? True that ISO's are usually willing to take on more risk than the big guys.
Couple things - Chase Paymentech and First Data are processors, not banks. I'd be careful going to banks for processing, because it tends to be among the most expensive and opaque you can get. (Bank of America and Wells Fargo both have merchant processing divisions, and are among the worst solutions most businesses can choose.)
Interchange plus is definitely the pricing model that most businesses want to be on (and it's actually not limited to high volume businesses - plenty of small merchants can get it, too) but be aware that by itself, interchange plus isn't a silver bullet. It really needs to be a true pass-through model, where you pay the true costs of interchange and assessments. Otherwise, you could still get overcharged. Mercury Payments, for example, charges with "interchange plus" but has now been sued twice for overcharging on assessments. Basically they padded the costs of assessments while trying to make it look like those were the costs charged by the card brands.
I guess I need to write a short letter explaining it, saying I don't do it anymore, and include highlighted bank statements of the money coming in, and the money going back out. Unfortunately I don't have tax numbers for the clients.