HomeMy WebLinkAbout2003 07 14 Regular G Additional Payment Options for Customers to Pay for City Services
COMMISSION AGENDA
ITEM G
Consent
Informational
Public Hearing
Regular X
July 14. 2003
Regular Meeting
Mgr~/ ~
Authorization
REQUEST:
Information Services requests that the City Commission
provide direction relative to the acceptance of credit cards,
debit cards, and bank drafts as additional ways for
customers to pay for City services such as utility bills, Parks
& Recreation services, and Community Development
services.
PURPOSE:
The purpose of this request is for the commission to provide direction
relative to the acceptance of credit cards, debit cards, and bank drafts
and to enable the Information Services Department to move forward
with on-line services which will include online payment for services
such as utility bills, Parks and Recreation services, and Community
Development Services, beginning with Utility Billing.
CONSIDERATIONS:
All surrounding cities within Seminole County were surveyed as well as
Seminole County, City of Orlando, Orlando Utilities Commission, City of
Winter Park, and City of Tallahassee.
.. Three of the Seminole County cities (Altamonte Springs, Casselberry,
Longwood) accept credit cards and absorb the associated fees.
.. The other two Seminole County cities (Lake Mary and Oviedo) do not
accept credit cards but are looking to do so in the near future.
CITY OF WINTER SPRINGS
CITY COMMISSION
REGULAR MEETING - JULY 14.2003
REGULAR AGENDA ITEM "G"
PAGE20F4
.. Seminole County does not currently accept credit cards but is looking
to do so in the near future,
.. Orlando and Winter Park both accept credit cards and absorb all fees.
.. Tallahassee and Deland accept credit cards, only through SpeedPay so
that they incur no fees.
.. A summary of the results is attached (attachment 1).
.. New estimates: 144,000 bills sent out annually. $8.5 million total
annual billing
Direction relative to the above alternate forms of payment is needed in
order for Information Services to move forward with part of its LT.
Strategic Plan, which includes on-line viewing of utility bills, and on-line
payment of utility bills.
Choices to be made:
· Does the City Commission wish to approve the implementation
and use ofthese alternate forms of payment?
· If so, which direction does the commission wish to take?
1. Setting this up ourselves through a bank will cause the City
to incur fees, which will probably require us to go out for
bid. Will the City then absorb these fees? (See Bank of
America information - Attachment 2 - "Merchant
Services" for more information on fees, and Attachment 3 -
"Pricing Schedule" for bank drafting information.
a) Which credit cards does the City wish to accept?
Note: Visa and MasterCard are the most widely
used credit cards for municipalities. - THIS IS
NOT AN ISSUE WITH SPEEDPAY AS THEY
ACCEPT ALL MAJOR CREDIT CARDS.
2. If we set this up through SpeedPay the City will not incur
any fees. (See Attachment 4 - "SpeedPay" Information).
SpeedPay charges the customer a "convenience fee" which
is currently a percentage - roughly 2.8% - of the customer's
bill. They are looking at going to a flat rate fee instead of
the percentage in order to fall within the credit card
association's guidelines. Some people may avoid paying
by credit card because of this "convenience fee".
FUNDING:
City Absorb All Costs of Providing Alternative Forms of Payments to the
Customer
The cost of the service is dependent on a number of variables as follows:
· Which credit cards are allowed
CITY OF WINTER SPRINGS
CITY COMMISSION
REGULAR MEETING - JULY 14, 2003
REGULAR AGENDA ITEM "G"
PAGE30F4
· What provider (ex. Bank of America) is selected as they have
different fees
· Volume - number of customers that decide to use the card
· What payments are allowed to be charged using a credit card
(utility bills, occupational licenses, permits...)
· Cap on the amount that can be charged to a credit card
· Whether equipment is rented or purchased
Previously, the City met with Bank of America and they estimated the cost
of the service based on utility bills only averaging $60 a bill at
approximately $30,000 a year. The volume estimate was based on what
they have seen with other organizations of a similar size.
For initial funding purposes assume the following:
· Visa & Mastercard accepted
· Bank of America provides service
· All types of payment accepted on credit cards with a limit of $500
· All types of payment accepted on debit cards - no limit
· Reoccurring utility payments only on bank draft
· Rental of equipment
Assume start up October 1, 2003 - Budget service cost in the amount of
$47,000 as follows:
· General Fund - $5,000
· Water & Sewer - $30,000
· Stormwater - $2,000
· Solid Waste - $5,000
· Building Fund - $5,000
OR
City Utilize the Services of a 3rd Party Provider to Accept Payments
Per transaction fees of $_0_ will be charged to City. Rough estimate of
$_0_ based on an unknown volume for credit and debit cards.
Bank drafting to be performed and paid by City. Estimate approximately
$2,000 per year in bank draft fees to be charged to Water & Sewer Utility
Fund.
Assume start up October 1, 2003 - Budget service cost in the amount of
$47,000 as follows:
· General Fund - $
· Water & Sewer - $2,000
· Stormwater - $
· Solid Waste - $
· Building Fund - $
CITY OF WINTER SPRINGS
CITY COMMISSION
REOULAR MEETING-JULY 14,2003
REGULAR AGENDA ITEM "0"
PAGE40F4
RECOMMENDATIONS:
Information Services recommends that:
· The City Commission authorize the acceptance of debit and credit
cards for Utility Billing payments using SpeedPay. Implementation
should not begin until after a policy has been created and adopted by
the Commission.
· The City Commission approve bank drafting to be performed by the
City through the City's bank at an estimated cost of $2,000 per year for
bank draft fees. Implementation should not begin until after a policy
has been created and adopted by the Commission.
· Give direction to the City Attorney/Finance Department to draft a
Credit CardJDebit CardlBank Draft Policy along with a deadline for.
this policy to be brought back before the commission.
· Authorize Information Services to proceed with implementation of
debit/credit card and bank draft utilization, in the area of Utility
Billing. (After policy has been created and adopted by Commission).
ATTACHMENTS: Attachment l: Survey of other cities/government entities and their
acceptance of debit/credit cards and bank drafts (1 page)
Attachment 2: Merchant Services Info Sheet from Bank of America (4
pages)
Attachment 3: Pricing Schedule for ACH Bank Drafting Fees from Bank
of America
Attachment 4: SpeedPay information (2 pages)
COMMISSION ACTION:
SURVEY
CREDIT/DEBIT CARD BANK DRAFT USAGE
ATTACHMENT 1
A1tamonte Seminole
Springs Casselberry LakeMary Longwood Oviedo Sanford County Orlando Winter Park Tallahassee Deland
Do you currently allow credit
cards to be used for payment
of any city services? Yes Yes No Yes No No No Yes Yes Yes Yes
Is a 3rd party billing company
involved? No No N/A No N/A N/A N/A No No Yes - Speed Pay Yes - SpeedPay
absorbs up to
$100 per
If not, who pays the fees transaction. 2% 2.8% convenience 2.8% convenience
associated with the credit convenience fee fee - paid by fee - paid by
cards? applies City absorbs N/A City Absorbs N/A N/A N/A City absorbs City absorbs customer customer
Is the City happy with the way I
it is working? Yes Yes N/A Yes N/A N/A N/A Yes Yes Yes Yes
Do you currently allow debit
cards to be used for payment
of any city services? Yes Yes No Yes Yes No Not Yet Yes Yes Yes Yes
Is a 3rd party billing company
involved? No No N/A No No N/A N/A No No Yes - SpeedPay Yes - SpeedPay
If not, are there any fees
associated with the debit
cards, and if so, who pays 2.8% paid by 2.8% paid by
them? City Absorbs City Absorbs N/A City Absorbs City Absorbs N/A N/A City Absorbs City Absorbs customer customer
Is the City happy with the way
it is working? Yes Yes N/A Yes Yes N/A N/A Yes Yes Yes Yes
Do you currently allow bank
drafts to be used for payment
of any city services? Yes Yes Yes Yes Yes Yes N/A Yes Yes Yes Yes
Is the City happy with the way I
it is working? Yes Yes Yes Yes Yes Yes N/A Yes Yes Yes Yes
Merchant Services
AfrftUfMENT a
To really compare Apples to Apples,
There are Two Main Areas to Look At:
Discount Rate
Interchange Rates
When you look at the whole picture Discount Rate, Non-Qualified Transactions and
Extra Fees, etc. Bank of America is a cost saving solution for bankcard processing.
1. DISCOUNT RATES: (also see attached State of Florida Pricing or
www.myflorida.com )
We are pleased to offer a processing rate oflnterchange (See attached Chart)
Plus 0.07% + .1St for all of your Visa and MasterCard transactions. Debit Cards are
charge at .40~ per transaction if a Pin Pad is used. If you use a virtual net platform to
get authorizations, you may incur a .1 O~ per transaction fee.
For a typical Visa (Card Present) transaction that would be:
1.39% + $.10 for Interchange
0.084% for Visa Dues and Assessments
0.07% + $.15 for Bank of America's Fee
TOTAL =
1.544% + $.25
For a typical Visa (Card NOT Present) transaction that would be:
1.43% + $.05 for Interchange
0.084% for Visa Dues and Assessments
0.07% + $.15 for Bank of America's Fee
TOTAL =
1.584% + $.20
For a typical MasterCard (Card Present) transaction that would be:
1.40% + $.10 for Interchange
0.095% for MasterCard Dues and Assessments
0.07% + $.15 for Bank of America's Fee
TOTAL =
1.565% + $.25
For a typical MasterCard (Card Not Present) transaction that would be:
1.50% + $.10 for Interchange
0.095% for MasterCard Dues and Assessments
0.07% + $.15 for Bank of America's Fee
TOTAL =
1.665% + $.25
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BankofAmerica. VHigherStandards.
* Different Interchange rates may apply. A complete list of all possible Interchange
Fees is included with this proposal
2. Direct Interchange Pass Through:
Unlike most of our competitors, we do not add a profit margin to lnterchange
Rates. We pass the fee from Visa/MasterCard straight through. This can add up to a
significant savings.
.
When you really compare Apples to Apples, Bank of America saves you money
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Bank of America. ~Higher Standards.
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Customer Service
In addition to saving you money, we offer unparalleled Customer Service:
You will have twenty-four hour a day Customer Service support. For any question,
concern, or need, help is only a phone call away.
You will receive superior Customer Service from Bank of America: Unlike our
competitors that use outside organizations to sell and service your account, we will be
there to honor our commitments and cultivate the relationship.
As a Merchant Service customer, you will be recognized as a Bank of America
customer from the day your account is credit approved. lnformation on any financial
product or just a competitive rate quote is as close as a phone call away. In today's
world of bank consolidations, it is comforting to know that you have an alternative,
when and if you need it.
We will not try to lock you in: We believe in earning customer loyalty. Therefore,
you will not find things like three-year agreements with penalty clauses or non-
cancelable terminal leases. We have to work harder at customer service because if we
fail to deliver you are free to go elsewhere.
Chargeback defense system: No business owner likes chargebacks, especially those
that could have been avoided if the processor understood the rules correctly or
responded to the issuing bank a little quicker. At Bank of America, we have
developed image and rules based technology to scan and screen all incoming
chargebacks electronically. More than a third of all chargebacks are reversed even
before they reach an investigator. The remainder, are processed electronically
providing speed and accuracy. The bottom line is fewer chargebacks to you, our
customer.
Local offices, nationwide: Although routine communication will occur over the
telephone, it's reassuring to know that a Bank of America Merchant Services office is
not too far away. Our employees are available to understand regional differences,
possibly cut some corners and provide on site attention when necessary.
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Bank of America. VHigher Standards.
3
~ment
At Bank of America, we offer many creative solutions for processing Credit
Cards: Dial-up terminals to State-of-the-Art Centralized computer software systems.
In most cases, we can use your existing equipment if you own it. If not, we have
many affordable solutions for both renting and purchasing equipment or purchasing
software.
Terminals:
Hypercom T7Plus
Hypercom S8 Pin Pad
Rental
$20.00
$ 5.00
Purchased
$450.00
$180.00
A brochure describing the terminal is included with the proposal
Internet Processing Options:
Our Internet solution, eStores Settle Up cost $145 for set up, $l75 for License
Agreement and then $30.00 per month for ongoing support. For more information,
please see www.bankofamerica.com/estores
We also are certified on several other Internet services.
Additional Fees: (also see attached State of Florida Pricing)
No monthly minimum
$10.00 Chargeback Fees
American Express and Discover Card will be priced their respective company.
For Any Questions Concerning This Proposal, Please Contact:
Scott R Timmerman
Assistant Vice President
625 N Flagler Drive, lOlh Floor
W Palm Beach. Florida 33401
(561) 838-2250 - Office
(561) 838-2255 - Fax
scott.r. timmerman@bankofamerica.com
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Pricing Schedule
City of Winter Springs
July 7, 2003
Service Description Per Item Activity Chan~e
ACH Bank Draftin2 (ACH Debit)
Set Up Fees - One timefee
ACH Set Up 50.00
ACH Testing 50.00
On Goin~ Fees
ACH Maintenance- Per Month 15.00
ACH Per Item 0.10
ACH Transmission - Per Transmission 15.00
Additional Service Char~es based on activity
ACH ReturnslNOC (Notice of Change) - Per Item 3.50
ACH Reversals 7.50
ACH Reclears 2.50
ACH Return Item Notification (Fax) 3.00
ACH Return Item Notification (Phone) 5.00
ACH Return Notification (via Bank of America Direct) - per 1.00
return
Services utilized but not listed on the above schedule of fees will be charged and appear on the
City's monthly analysis statement. Please contact your Bank of America representative for
additional information.
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Voice Response Unit
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With deregulation, utilities are facing increased competition
and the need to offer customers more flexible payment options
without increasing staff. Speedpay's automated Voice
Response Unit speaks to that need.
The Speed pay Vonce Response Unlit
Speed pay provides a fast, convenient payment option that
allows utilities to accept most major credit cards and checks for
immediate payment using an automated voice response unit.
o Increased customer convenience. Allow your customers to
pay over the telephone using check or credit card while never
having to leave home.
o Improved cash flow. Improve your access to funds by using
our daily settlement to your designated bank account.
o Reduced processing costs. Reduce walk-in payment volumes
or the need for additional payment centers while increasing
accessibility to a broader geographic region. Customers can
be anywhere in the United States and pay anytime they want!
o Accelerated revenue collection. The Speedpay Voice
Response Unit is a fast way to receive payments. Allow
customers to schedule convenient payment plans right over
the telephone.
o Customers call a convenient 800 telephone number assigned
exclusively to your company and receive an automated
attendant that takes all payment information.
@ Speed pay accepts MasterCard, Visa, Discover, Debit/ ATM Cards
and Speedpay check-by-phone, 24 Hours a day, 7 days a week,
365 days a year
o Speed pay sends you a priority e-mail or fax notification of
reconnects for immediate action
@ Speed pay provides you with an emergency contact or day-
time phone number on customers who use the service, allowing
you to update your customer information and improve your
customer records
@ Speed pay provides detailed reporting on customer acceptance
rates and volumes
Best of All: No set-up fees, No maintenance fees, No development costs
1-800-252-9638
www.ecommercegroup.com
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Internet Payment Solution
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Currently, utilities are working harder
than ever to answer customer demands
for expanded payment options. Since
more and more uti I ity customers are .
choosing the Internet to pay their bills,
offering an Internet payment option is a
great way to satisfy customers,"
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Speedpay's Internet payment.'option
lets your customers pay by check, credit
card or ACH from any computer with an
Internet browser.
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o The Speed pay Internet
Payment Solution is convenient.
Customers love the facility of paying
bills at home, in the office, or on the
road, from their personal computers
and Internet access sites.
r. Last Checking Account Used
Checl<. dn~\Yn on
Sanwa e.an~: C cMornia
Checldng ~ccount number .. 12345678901Z3456I"
New checL. number r-
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RoutinQ number I: r- I:
Checv.ino account number a" I /I"
Check number r-
(' Electronic Debit
This oPtion reQuires a siQnature on file.
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Card number I
Expiration date r-
r. Pay Amount Due
Amount due $125,00
Includino a fee of $5.00
TOt61 payment $130.00
(' Pay Other Amount
Enter payment amount r-
r:- Make One-Tirne Payrnent
On this date r-
r- Make Repeat PaYl'l1ent
On this day of ever,. month I
Until final pa."ment dete of r-
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@) The Speed pay Internet Payment Solution is cost-effective. Like all other versions of
Speedpay, the Speed pay Internet Payment Solution costs you nothing if your customers
decide not to use it. We only charge you one low per-transaction fee.
1-800-252-9638
@) The Speed pay Internet Payment Solution is fast. When your customers use the Internet
Payment Solution, you get paid immediately instead of waiting for payment in the mail.
@ The Speed pay Internet Payment Solution adds value to your web site. Offering
Speed pay on your web site increases your company's presence on the Internet,
Best of All: No set-up fees, No maintenance fees, No development costs
www.ecommercegroup.com