That's an excellent question, especially since the perception of what aggregation is has changed over the years from the forbidden practice of one merchant using his or her merchant identification number to process payments for multiple merchants, to that of payment businesses processing numerous small merchants under one umbrella.

Also, Visa is implementing changes to its Fixed Acquirer Network Fee (FANF) that are expected to raise costs for aggregators because Visa will be assessing FANFs based on individual merchant transaction types and volumes rather than as one fixed fee per aggregated merchant group. This topic is touched upon in a news article we posted April 24, 2014, under Breaking Industry News on our home page, www.greensheet.com. And Ken Musante, President of Eureka Payments LLC, is writing an article on Visa's FANF changes that will be slated for an upcoming issue.

As for archived articles that delve into the cons of aggregation, here are several that should be helpful:

• "Is the aggregator model right for you?" by Chandan Mukherjee, The Green Sheet, July 9, 2012, issue 12:07:01: This discusses the pros and cons of several aspects of the aggregation model: risk assessment, transaction switching, funds settlement, and reporting and business intelligence.
• "Micropayments are no small matter," by Patti Murphy, The Green Sheet, March 26, 2012, issue 12:03:12: This article doesn't argue against aggregation, but it mentions a way to process micropayments for digital content providers that doesn't necessitate aggregation.
• "Square versus the payments world," by Tim McWeeney, The Green Sheet, Oct. 24, 2011, issue 11:10:02: This article calls into question whether Square's business model, based on merchant aggregation, is sustainable.
• "What is an aggregator anyway?" by Adam Atlas, The Green Sheet, Nov. 28, 2005, issue 05:11:02 While some of the content in this article is out of date because the card brands' structure and rules have changed, some of the drawbacks to aggregation remain applicable.

Most of our sources distinguish between government-backed currencies like the U.S. dollar, and virtual currencies such as bitcoin. But virtual currencies are nevertheless real and on the government's radar. In August 2013, Judge Amos Maazant of the U.S. District Court, Eastern District of Texas, ruled that while bitcoin is not akin to the U.S. dollar, it is comparable to precious metals, such as gold, or other valued resources. The defendant in that case had argued that bitcoin is not money and is thus neither regulated by the United States nor subject to lawsuits based on laws pertaining to currencies.

In March 2014, the IRS ruled that bitcoin and other virtual currencies do not have legal tender status, but are instead a form of property governed by capital gains tax regulations. Also, wages paid in bitcoin are subject to income tax at the value of the bitcoin at the time of payment. Such payments are also subject to employer tax withholding requirements. The IRS views bitcoin payments for goods and services much like it views barter transactions.