Whenever you fill out an application with a financial institution, you expect to release some of your personal information. Although you may hesitate, you can feel safe in providing this if it is a known institution that you trust. A payment processing industry update was made May 11th, 2018 which requires merchants to provide additional personal information a merchant application. This update was made by FinCIN, or the Financial Crimes Enforcement Network. FinCIN is a bureau of the U.S. treasury whose mission is, “to safeguard the financial system from illicit use, combat money laundering and promote national security.”
What Personal Information on a Merchant Application is Required?
The added personal information on a merchant application required is that of the owner(s) and operator(s) of any business applying for a merchant bank account. A Social Security number, date of birth, and contact information need to be given for those who meet the following criteria:
An Owner- any one person that owns 25% of the company or more.
An Officer- any person who has “significant responsibility to control, manage, or direct a legal entity, including an executive officer or senior manager or any other individual who regularly performs similar functions.”
For many small businesses, the owner and officer are the same people. For other companies who have, for example, five owners all holding a 20% stake in the business, the ‘officer’ fields of the application will be the only necessary part.
Not Just New Businesses
This update doesn’t just apply to businesses new to accepting cards, it also applies to Change of Ownership applications. If your corporation is the new owner of another company, you’re required to fill out one of these applications. During a change of ownership, the legal name of the company may change. Also, your Tax Identification Number for your business will change. Failing to complete this Change of Ownership app will result in IRS issues meaning up to 32% of your processed funds held from you.
How to Keep This Information Safe
You can’t get around providing this additional personal information to your financial institutions. However, you can guarantee that the institutions you give it to have the highest level of PCI compliance. If they take security seriously, you can rest assured they’ll protect you.
It’s not just merchant account applications that have the FinCIN update, it’s all financial institutions’ applications. With a federal update this cumbersome, we’d be happy to answer any questions or concerns. Schedule a 30-minute phone meeting so we can prepare you for a painless and safe application process.