Archive for the ‘Credit Card Rules Municipalities’ Category

When Visa and MasterCard changed their rules in 2008, the immediate impact was that cities and counties, including tax collectors and utility districts, could now accept credit cards in their offices at no cost, when their constituents came in and wanted to pay.  As technology was developed for this, a normal extension of that technology was to develop a simple connection to city and county property tax and utility districts databases so that users could go online and search, view and pay bills online.  Whether the users where city/county employees behind the counter or constituents at home.

At least one company, Government Payment Processing has developed a system that is standardized and allows cities and counties to implement this “Bill Presentment and Payment” technology at no cost with credit, debit and ACH and eCheck transactions also at no cost.  This functionality has always cost cities and counties a substantial annual amount and has been traditionally provided by municipal software companies.

By offering this at no cost, now, any city or county that wants to expand their online payments capabilities with bill search, view and payment can do so.  This represents a radical change and a significant opportunity for most cities and counties which do not have this capability.  If you would like some more information on this please contact me directly.

Jim Plunkett

When Visa launched their Tax Payment Program in November 2008, part of the new rules require payment processors and third party payment service providers to mandatorilyoffer an “incentive” $3.95 (or less) convenience fee on tax payments made with Visa debit cards, regardless of the size of the transaction.  If you or your vendor are assessing a “convenience fee” on tax payments made with credit or debit cards this is required both for online and over the counter (OTC) payments made in your offices.

We have setup dozens of cities and counties for tax payments with convenience fees, that just completed their annual tax collection period.  Visa debit cards exceeded all other forms of payment ranging from 50-70% of all transactions.

Clearly paying a $500 tax bill with a debit card at $3.95 vs. with a credit card for $12.50 or more (2.5%) is an important factor for your constituents that are choosing to use their cards for tax payments. 

You should consider not only the compliance issues but the trends in card usage by your customers if you or your vendor presently does not offer a Visa debit card solution for $3.95 or less.

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

Over this past year, significant changes in credit card rules for Municipalities have occurred. Now you can begin accepting credit cards in your offices and assess the fee back to your citizens. If you are like 95% of the towns in the U.S.,

this is a big deal.

Your citizens have…for years…been asking for you to accept credit cards for payment but you haven’t been able to budget the costs. Now you can!

RULE NUMBER 1

Make Sure You are Working With A Company That Understands the Complexities of the New Convenience Fee Programs and Also What You Need for Your In-Office Transactions

Visa, MasterCard and American Express don’t play well together yet when you decide to accept credit cards you will need a processor that helps you work with the continually changing (every October and April) credit card company

rules.

The credit card industry is a vast ocean of mis-information because the barrier to entry for sales organizations of credit card processing services is minimal.

This can be your single BIGGEST MISTAKE! Most Banks, Processors and Third Parties do not understand the new rules nor the issues and will try and sell you a system designed for a retailer or for online transactions.

To see more on this, please click on one of the publication links to the left and do not hesitate to contact me directly by Clicking Here with any questions