CCP 04-26-2004 - Laserfiche WebLink

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. . . Memo Credit Card Acceptance 2 card company. This charge will vary anywhere between 1.8 and 2.8 percent of the charged amount depending upon the type of entry. Lower charges are applied if a card is physically swiped through the machine as opposed to manually inputting the card number. The credit card company 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, 1he City may collect $500,000 to $660,000 at an annual cost of$12,500 to $16,500 to the City_ Visa and MasterCard agreements prohibit charging a credit card customer a fee for using the credit card, therefore, the service fee charged by the credit card 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 credit card. This rule does not apply to transactions conducted over the internet. Ifthe Council is concerned 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, such as not to exceed $250 or be specific 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. RECOMMENDED ACTION: Staff recommends that the Council proceed with the approval to implement the Phase I of the credit acceptance system by the middle of 2004, with a limit not to exceed $250 per transaction. Staff is also directed to continue research for the Phase II (on-line) and to seek its implemention next year.