HomeMy WebLinkAbout4/19/2000 - STAFF REPORTS (9) DATE: April 19, 2000
TO: City Council
FROM: Director of Finance & Treasurer
CITY ACCEPTANCE OF CREDIT CARD PAYMENTS
RECOMMENDATION:
It is recommended that the City Council authorize the acceptance of VISA or
MasterCard credit card payments_
BACKGROUND:
The City currently accepts only cash and checks in payments for the various
services it provides or taxes that it charges. Several departments have requested
that the City begin to accept credit cards as an alternative payment method.
The advantages to those departments are increased sales and customer service.
For example, the City's Collection Officer believes that we could recover more bad
debts and get reimbursed for more NSF checks it people were allowed to pay with
a credit card. Leisure Services expects to increase attendance in the entire range
of leisure programs. The Library is interested in offering the credit card payment
option for passports, Virtual University classes and incidental Library sales.
The base cost of accepting credit card payments is a one-time cost of about$500
per location for initial set-up, training, supplies, etc. Annual costs would be about
$300 per year for lease of the equipment, (swipe or phone-in), plus a transaction
fee based on a percentage of the sale. The initial rate will be about 2.4%, and is
subject to review after three months. The processing fee percentage is dependent
upon the total dollar volume and the average ticket sale. The higher those
amounts are, the lower the percentage will be.
The City will not be able to recover the transaction fee directly from the customer,
nor can a different amount be charged for a cash or check payment versus a credit
card payment. The City also cannot limit the use of credit cards by either a
minimum or maximum dollar amount, or by type of transaction (e.g., parking
citation or building permit). There is the potential that some large amounts due to
the City, such as a hotel's monthly Transient Occupancy Tax payment, could be
paid via a credit card, resulting in a large transaction fee. If this occurs, we will
have to measure the increased costs of accepting credit cards against the
increased revenue from additional sales and customer convenience. If the
program is successful and cost effective, the next step will be to offer an on-line
payment service via the Internet.
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Credit Card Payments
April 19, 2000 AlePage 2 '
The attached minute order authorizes the Director of Finance&Treasurer to open
a Merchant Services Account with the Bank of America for the purpose of
accepting VISA and MasterCard payments at the City Hall Cashier, Leisure
Services and Main Branch Library.
APPROVED BY SUBMITTED BY
f a as J. Flicek Thomas M. Kanarr
S Interim City Manager Director of Finance &Treasurer
ATTACHMENT:
1. Minute Order
MINUTE ORDER NO.
AUTHORIZING THE DIRECTOR OF FINANCE &
TREASURER TO OPEN A MERCHANT SERVICES
ACCOUNT WITH THE BANK OF AMERICA FOR THE
PURPOSE OF ACCEPTING VISA AND MASTERCARD
CREDITCARD PAYMENTS ATTHE CITY HALL CASHIER,
LEISURE SERVICES AND MAIN BRANCH LIBRARY
I HEREBY CERTIFY that this Minute Order, authorizing the Director of Finance &
Treasurer to open a Merchant Services Account with the Bank of America for the purpose
of accepting VISA and MasterCard credit card payments at the City Hall Cashier, Leisure
Services and Main Branch Library, was adopted by the City Council of the City of Palm
Springs, California, in a meeting thereof held on the 19th day of April, 2000.
PATRICIA A. SANDERS
City Clerk
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