NHGFOA Networking Meeting October 28, 2011

1. NHGFOA Networking MeetingOctober 28, 2011 Accepting Credit Cards for Payments

2. Agenda • Welcome, Overview of Survey Results – Carol Andersen, City of Concord & NHGFOA VP • Overview of Credit Card Rules – Paul Bazylak, Visa • Panel Discussion – Dana Call, Town of Windham; Lisa Richmond, City of Claremont; Linda Langille, Town of Litchfield • Selecting Vendors, Credit Card Fees & Notice to Customers • Security / Ordinance & Policies • Merchant Account set-up and Reconciliation functions • Other, Q&A

3. RFQ Process – Questions for Vendor • What specific information is required to complete the application/underwriting process (Merchant is a municipality with an elected Treasurer that is the only authorized signer on the bank accounts; Town does not file tax returns). • What are the settlement time frames for fees to be deposited into the Town’s bank account. • How does the vendor ensure it is up to date with all Payment Card Industry (PCI) Standards; and does the vendor undergo annual security audits by an independent party. • What is the minimum contract term that is required; and if greater than one year, does the vendor adjust initial pricing based on annual reviews of merchant activity. • What type of transaction reporting is provided and what level of detail is included; is the reporting available electronically. • How are chargebacks handled and what liability is there to the Town. • What type of equipment/data transmission lines are required.

4. Glossary of Fees – Example from Statement Adjustment Fee - a fee charged for adjustments made to deposits due to errors made by Merchant. Administration/Service Fee - a fee charged for ongoing services to the Merchant account. Annual Fee – a fee charged one time each year to recoup the annual operational expenses incurred by us during the prior year. Authorization Fee – a fee that is charged each time authorization is obtained on a bank card or non-bank card transaction. AVS Fee – a fee assessed each time address verification is obtained either by a Point of Sale (POS) device or by calling the voice center. Chargeback Fee – a flat, per occurrence fee that is charged to cover processing charges incurred because a transaction is being disputed by the cardholder or card issuer. Equipment Fee – a fee charged for POS terminals, printers, and imprinters, and any other equipment used by the Merchant. Maintenance Fee – a fee charged for changes to the Merchant account after the initial set up.

5. Glossary of Fees – Example from Statement Membership Fee – a fee charged either monthly, quarterly or annually for participation in a merchant bankcard program. Minimum Discount Fee – the minimum amount billed monthly for discount fees. If discount due is not equal to or greater than the set minimum, then it will be adjusted up to that amount. Network Access Fee – a fee charged for providing POS terminal access to the electronic network, including authorizations and declines. Retrieval Fee – a flat, per occurrence fee charged to cover processing charges incurred by the request from the cardholder or card issuer for a legible draft copy. Set Up Fee – a one-time fee charged by the processor for establishing Merchant’s account and/or services. Supply Fee – a fee charged by Merchant for supplies, such as printer paper, sales and credit drafts, and printer cartridges. Swap Fee – a fee charged for exchanging Merchant’s current equipment, such as POS terminals, printers, and imprinters, for different, new, or updated equipment.

6. Calculation of Fees – Example from Windham Fee Analysis – Lacrosse Program: Total Collected 1 year period = $52,305.00 Visa/MC/Disc Processing fees = $962.81 Other fees (monthly maintenance, monthly data breach insurance, inactivity fee as applicable) = $363.05 Effective Rate = 2.53% • Fees are paid (net) from user fee revenues generated by the Lacrosse Program, which is run through a Recreation Revolving Fund • Lacrosse Program is willing to pay monthly fees in order to have the convenience of online registration and payment services for their participants • Vendor’s Merchant Services Program was compatible with US Lacrosse online services

7. RSA 80:52-c CHAPTER 80COLLECTION OF TAXES Miscellaneous Provisions Section 80:52-c 80:52-c Electronic Payment. – The governing body may authorize the municipality's treasurer or other appropriate municipal official to accept payment of local taxes, charges generated by the sale of utility services, or other fees or charges by use of a credit card, debit card, or such other means of electronic transaction as approved by the governing body. Any municipality may add to the amount due, in addition to any penalties and interest payable, a service charge for the acceptance of the credit card, debit card, or such other means of electronic transaction as approved by the governing body. The municipality, at the time of billing, shall disclose the amount of the service charge.

8. Sample Invoice

9. Ordinances/Policies/Red Flag Rules • Sample City Ordinance • Sample Credit Card and Security Policy • Sample Red Flag Rules

10. Payment Card Industry (PCI) Compliance Municipalities are responsible to ensure that transactions are PCI compliant to avoid significant financial penalties. https://www.pcisecuritystandards.org

11. Other Considerations • Reconciliation of “merchant” account to municipality’s operating account and department activity totals • Consideration of establishing a separate account and periodically transferring funds • Questions? • Other Resources – www.nhgfoa.org