CCP 04-19-2004 - Laserfiche WebLink

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Memo Credit Card Acceptance 2 eompany charges a higher fee for manual input due to risk factors. There is a minimum monthly usage fee of $25. . Staff estimates that initially 15 to 20 percent of the revenue normally received by checks will be through credit cards. Based on this estimated percentage, the City may colleet $500,000 to $660,000 at an annual cost of$12,500 to $16,500 to the City, Visa and MasterCard agreements prohibit eharging a credit eard customer a fee for using the credit card, therefore, the service fee charged by the credit eard company cannot be passed on to the user as such. As a result of this rule, or as a courtesy, cities contacted do not charge a fee to the users of the eredit eard, This rule does not apply to transactions conducted over the internet. If the Council is eoncerned about transactional costs of implementing this system, an option to consider would be to adjust the overall fee structure, Another option to consider is to start offering this service on a limited basis, Either have a dollar limit on the transaction, sueh as not to exceed $250 or be specifie about the services for which we accept the credit card. This implementation strategy would enable us to evaluate the entire process, including transactional costs as well as administrative effort to manage this system, Phase II (On-line Method) . The second method of accepting credit card is through the internet. Implementation of this system involves programming and/or purchase of new software, and may involve contracting with a third party to provide the service. Implementation of this system can cost somewhere between $15,000 to $25,000 plus on-going maintenanee and service charges, More in-depth research would have to be condueted, Some of the larger sized cities have implemented this system for limited usage, The most common usage is for Utility payments and Reereation Sports Program registration. This phase would require further research and discussion at a later date. Staff seeks guidance whether to proceed with research or to defer it to a future date. RECOMMENDED ACTION: Staff recommends that the Council consider implementation of eredit card acceptance as a two phase project. Phase I can be implemented first as a pilot program. Phase II would require further research and discussion at a later date. .