Archive for June, 2009

No less than a half a dozen tax collectors in Florida have announced they will no longer accept Visa  since May. Their credit card processor has told them Visa will no longer allow them to accept credit cards and assess a fee back to their citizens.  Visa DOES allow a convenience fee to be assessed back but has specific regulations for both online and in-office transactions.

For ONLINE transactions, that are not tax payments, Visa CAN be accepted with a convenience fe assessed back to the citizen as long as it is a fixed fee regardless of the transaction amount and it is assessed by the city or county …not a third party.  This of course negates about 98% of the online payment scenarios in place because they are run by third parties. Since the convenience fee also must be a FIXED fee and the transaction costs assessed by MasterCard and Visa are percentage based, having a fixed fee is only feasible when you have a good handle on the average transaction amount…like utility bills.

For in office tax payments, Visa can also be accepted with a convenience fee assesed to the citizen, however, certain conditions must be met.  First, the convenience fee must be submitted and processed as a separate transaction and secondly, Visa consumer debit cards must have a “different” incentive convenience fee.  To do this automatically requires an investment in technology that most companies have not and may not be wiling to take.

To add to this conundrum, Tax Collectors in Florida often collect DMV payments in their offices and Visa presently does not allow a convenience fee to be assessed on these payments.

The bottom line is Visa does allow a convenience fee under certain conditions.  these conditions may require special technology from uour solutions provider…make sure you ask.

There is much information and misinformation circulating regarding Visa’s New Tax Payment Program that I would like to comment on:

The new Tax Payment Program effective October 4, 2008 replaces the old Visa Tax pilot program which has concluded.

Registration in the new program is REQUIRED if you or your third party provider is assessing a fee back to citizens on Tax Payments made with a Visa Card.

The Program applies to Online as well as In-Office, Over the Phone and In the Mail transactions.

Variable (percentage based) fees are allowed Except on Visa Debit cards where a fixed fee ONLY must be applied and must not be greater than $3.95 (Visa has established a new interchange rate of $2.50 for payment processors).

The convenience fee transaction and the County/City Fee transaction MUST be submitted as separate transactions.

Most if not all Third Party Service Providers DO NOT comply with these rules. Make sure when you are considering implementing a Tax Payment Program that you ask your solutions provider about the above requirements.

IF YOU WANT A COPY Of Visa’s new Tax Payment Program rules please Click Here

It’s the Economy Stupid

This phrase was widely used during Bill Clinton’s successful 1992 presidential campaign. In order to keep the campaign on message, James Carville hung a sign in Clinton’s Little Rock Arkansas Headquarters to keep the campaign staffers focused. Although the sign was intended for campaign staffers the phrase became a national sensation and is largely considered to be the reason for Clinton’s win.
This past Monday, as I presented to the Wethersfield Town Council, several citizens voiced their concerns to the council that they were not being pro-active enough with regards to to how they were handling the towns money. The

point being that most municipalities citizens are demanding accountability.
Municipalities are not the only ones facing hard decisions. Headlines in this past Septembers Contra Costa Times included Large Numbers of Alameda, Contra Costa Taxpayers Bail on Property Tax Payments. In Alameda County,

property owners failed to pay more than 25,000 property tax bills totalling nearly $115 million, while just north in Contra Costa County a record number of homeowners failed to pay their property taxes last fiscal year, costing that

county $116 million.
Many citizens want to use their debit or credit cards for payment but most cities and counties are not offering them the option.
Accepting credit cards can help both your citizen, by offering them another method for payment and also your office, by reducing collection efforts. In fact Contra Costa County began accepting credit cards using a convenience fee

program, this fall, to try and improve their collection.
If you do decide to accept credit cards in your offices you certainly don’t want to be explaining the transaction fees in your budgets to your citizens since the majority of them are not paying by credit card. Your only really defensible

solution is to offer card acceptance AND to put the burden of the transaction cost on the citizen that CHOOSES to use their card for payment.