Archive for July, 2009

The single biggest mistake you can make in preparing a new RFP is to combine your other banking services with your merchant services.  This used to be the standard way of doing things as most banks offer credit card processing along with all their other depository services.  However, now, a year after MasterCard, American Express and Visa have changed their rules for in-office, card present transactions, very few banks have responded to offer compliant solutions for cities and counties that want to implement a “convenience fee program.

So first and foremost separate your merchant services (credit card processing) RFP from your other banking services RFP.  Also be aware of new Visa rules that REQUIRE 1) that you have a separate merchant account, 2) the convenience fee be processed as a separate transaction from the fees you are collecting and 3) that Visa debit card transactions have an “incentive” convenience fee of $3.95 or less.  Finally make sure your that your service provider 1) demonstrates they are a Level 1 PCI - DSS compliant service provider 2) confirms that they have registered you with MasterCards Convenience Fee Program and Visas Tax Payment Program and 3) assists you in completing a Self Assessment Questionnaire for each physical location.

Any cties or counties intending to prepare an RFP and that have questions or need examples should feel free to contact me directly:

You may have read my previous email regarding Visa’s New Rules and  7 Counties in Florida that have chosen not to accept Visa in their offices.    Some of those counties chose not to accept Visa because because their vendor was making them sign a merchant agreement that was “outrageous” as described in detail in this Palm Beach Post article.

As Visa’s and MasterCard’s rules have changed, many vendors haven’t.  Non-government friendly “merchant agreements” are traditional merchant agreements designed for retailers (merchants) and include components that allow the payment processor to 1) hold your funds in a reserve account and 2) put a lien on those funds and 3) place all of the financial liability related to the transactions on the merchant (in this case the county).

While Visa now requires a separate merchant account in their New Tax Payment Program rules, payment processors are the ones that set the terms of these agreements.

Having been involved in this government in-office convenience fee market since it’s inception, we listened to cities and counties and have developed a government friendly contract merchant agreement that addresses issues that are not palatable to governments. We also have developed a solution that allows you to accept credit cards in your office, online, over the phone, even integrated into to your software, at absolutely no cost andwhich is compliant with all aspects of the Visa Tax Payment Program.

So…the bottom line is you do have a choice. Make sure at the very least, before you sign an agreement, there is no termination penalty.

If you would like more information from us please contact me directly.