ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2019

Other Liabilities Disclosure [Abstract]

ACCRUED LIABILITIES

NOTE 5 – ACCRUED LIABILITIES

Accrued liabilities as of December 31, 2019 and 2018 consist of the following:

	December 31, 2019		December 31, 2018
Accrued interest – related parties	$	943,356	$	830,260
Accrued interest – third parties		1,215,699		1,059,595
Accrued residuals		39,064		36,509
Accrued merchant equity		91,023		105,900
Other		45,338		162,545
Total accrued liabilities	$	2,334,480	$	2,194,809

Accrued Interest

Notes payable and convertible notes payable incur interest at rates between 10% and 15%, per annum. The accrued interest in most cases is currently in technical default due to the notes being past their maturity date.

Accrued Residuals

The Company pays commissions to independent agents which refer merchant accounts. The amounts payable to these independent agents is based upon a percentage of the amounts processed on a monthly basis by these merchant accounts.

Accrued Merchant Equity Liability

The Company provided all merchants the opportunity to earn shares of the Company’s common stock through their Merchant Equity Program (the “Program”). Under the Program, the merchant earned 1% of their total Visa/MasterCard volume processed during the first year of their contract. For example, if a merchant processes $1.0 million in credit card charges, the merchant will receive 10,000 shares of the Company’s common stock. The merchant must process with the Company for a period of three years for the shares to vest. All merchants became fully vested when the Company ended the program effective December 31, 2015.

For merchants in which the shares of common stock are not known as they are within the one-year period, the Company estimates on a quarterly basis as to the estimated amount of shares based upon the expected amount to be processed by the merchant on an annual basis. At the end of the first year, when the number of shares issuable is known, the Company makes an adjustment to the value of the shares, if needed.

The Company accounts for the value of the shares under the program as a sales incentive and thus the amounts in connection with the Program are recorded as a reduction to revenues. As of December 31, 2019, the Company has an obligation to issue approximately 776,000 shares of the Company’s common stock issuable under the Program. During the years ended December 31, 2019 and 2018, the Company issued 37,193 and 55,094 shares of common stock relieving $14,877 and $13,504 in liability under the Program, respectively.