Cheryl Pa*elli, City of Boulder, CO
Robert Gongwer, Wells Fargo
Joe Helmy, MasterCard
Rebecca Villareal-‐Mayer, City and County of San Francisco
Moderator: Speakers:
Tuesday, June 2
10:20 – 12:00
2 CPE
Why Is This So Difficult?
GFOA Best PracRce: Electronic Payment
and CollecRon Systems
o
Types of Electronic CollecRon Methods
– Fedwire, ACH, Credit Cards, Electronic Check Conversions
o
Advantages
– Accelerate receipts and availability of funds.
– Ease of payment and customer convenience.
– Reduce cashiering and accounts receivable costs.
– Enhance bank reconcilia@on.
– Reduce return check processing cost.
o
Disadvantages
• Paring electronic collec@on systems with A/R systems.
• Internal controls moves to informa@on technology controls.
• Many small banks may not offer the level of sophis@ca@on
GFOA Best PracRce: Electronic Payment
and CollecRon Systems
o
GFOA Recommends Governments
Perform Cost/Benefit Analyses,
Implement Safeguards and Frequently
Evaluate Systems and OpportuniRes on
All Aspects of Electronic Payment
GFOA Best PracRce: AccepRng Payment
Cards and SelecRng PC Providers
o
Many Benefits
o
Establish Payment Card Acceptance Program
–
Compliant with federal, state and local laws
–
Establish scope of program needed
–
Evaluate Costs/Benefits
–
Fee Structures – KEY component
•
Understand all of the FEE structures associated with a program
–
Discount rate, interchange fees, bank fees, administra@ve
fees
•
Program structures differ with each type of payment card vendor
•
Know all issues related to using third party payment provider
Discussion Topics
o
Growing Payment Segments
o
From Windows to Windows – AccepRng Payments in Person and on Devices
o
ACH vs. Debit Card vs. Credit Card
o
Steps to Consider When StarRng or Revamping Your Electronic Payment Receivables Program
– PCI
– Billing to Cash approach
Growing Payment Segments
79 Million Gen Y consumers
First Genera@on IMMERSED in technology
Use Social Networking to vet decisions
Technology is an expecta@on, not a benefit
Growing Payment Segments
Growing Payment Segments
trend
Mobile ApplificaRontrend
trend
Cashless Societytrend
Social Shoppingtrend
T-‐CommerceGrowing Payment Segments
Insurance
Healthcare
U@li@es
Governments
Non-‐Profits
Property Management
Educa@on
Child Care
Membership Organiza@ons
Growing Payment Segments
1) Mail-‐in payments declining
2) Biller direct is preferred
3) Card payments s@ll growing
4) The underbanked need alterna@ves
5) Finally embracing e-‐bills
ACH vs. Debit Card vs. Credit Card
ACH
• Request for funds
• WEB/TEL/PPD/CCD
• Business to Business
• Addenda records
included for certain types
• More cost effec@ve
• Ideal for bill payments
Debit Card
• Auth “captures” funds if
available
• Consumer driven
• Interchange capped by
Durbin Amendment • Ideal to accept cards at
lower costs
Credit Card
• Auth “holds” funds
• Consumer driven
• Level 2 data/Level 3
data
• More costly
• Ideal for general/retail
purchases
Steps to Consider: Electronic Payment Receivables Program
o
Payment Card Industry Data Security Standards
o
Industry tools and measurements to ensure the safe
handling of sensiRve informaRon
o
Applies to
all
merchants and third party service providers
Steps to Consider: Electronic Payment Receivables Program
Processing
Storing
Transmidng
Steps to Consider: Electronic Payment Receivables Program
COST OF NON
COMPLIANCE :
If a Level 3 merchant is found to be non-‐ compliant they can be fined up to $25,000 per
month.
COST OF BREACH : Merchants bear the cost
of all card replacements and card holder no@fica@ons. Cost per
breached record: between $100 and $300.
COST OF CUSTOMERS:
The price of your ins@tu@on's damaged reputa@on is difficult to
quan@fy ...
COST OF NON COMPLIANCE Remove payment informaRon off of your network
Steps to Consider: Electronic Payment Receivables Program
Reduce:
Cost
Complexity
Risk
POS Web IVR Mobile ERP MOTOSingle integraRon for mulRple channels
Consolidated reporRng
Steps to Consider: Electronic Payment Receivables Program
post match deposit bill deliver order Billing to Cash accounts receivable eReceivables Print ServicesOnline Bill Presentment Payment Gateway
Merchant Services ACH
Mobile
19
Steps to Consider: Electronic Payment Receivables Program
Collect more quickly and
efficiently
Apply cash receipts faster
Reduc@on in Past Due
Reduc@on of manual
interven@on
Slow track
Aging$$$
Independent ReacRve
Fast track
Advanced$
Integrated ProacRve Technology Cost to process Payment channelsTime to process CommunicaRon
Steps to Consider: Electronic Payment Receivables Program
Print Services E-‐Bill (WEB) E-‐Bill (WEB) Customer Ecommerce Sites (WEB) POS Phone (TEL) Mail Lockbox Card Card and ACH Card and Mobile Payment Gateway Receivables Manager WFPG Automated WFPG API WFPG Manual
Presentment Vehicle Payment Types ReporRng
Go
vern
men
t /
In
sRt
uRo
n
Pa
yer
Print Services E-‐Bill (WEB) E-‐Bill (WEB) Customer Ecommerce Sites (WEB) POS / Mobile Device Phone (TEL) Mail Lockbox Card Card and ACH Card and Mobile Payment Gateway Receivables Manager WFPG Automated WFPG API WFPG Manual
Presentment Vehicle Payment Types
ReporRng
Pa
yer
think … Billing to Cash
Go
vern
men
t /
In
sRt
uRo
n
Print Services E-‐Bill (WEB) E-‐Bill (WEB) Customer Ecommerce Sites (WEB) POS / Mobile Device Phone (TEL) Mail Lockbox Card Card and ACH Card and Mobile Payment Gateway Receivables Manager Automated Applica@on Program Interface Manual Pull
Presentment Vehicle Payment Types
ReporRng
Pa
yer
think ... Billing to Cash
Go
vern
men
t /
In
sRt
uRo
n
E
urocard
M
asterCard
V
isa
Steps to Consider: Electronic Payment Receivables Program
Has reduced “card present fraud” by 84% in Europe1
Liability for counterfeit card
transacRons will shi] to merchants not supporRng new EMV standards
1Visa and EMVCo studies 24 The Rme for change has come – and the deadline is October 2015
Joe Helmy
Card Acceptance: Pricing and Fee Structure
o
Pricing Models
– Interchange Plus – Tiered – Subscrip@on/Membershipo
Fees
– Interchange Reimbursement Fees and Assessments
– Sta@c Fees
• Payment Gateway Fees
• PCI Fees
• Terminal Fees
• Networks
• Others: Monthly Fees, Minimum Fees, Online Repor@ng,
Credit vs. Debit
Credit
o Interchange Rate: 1.55% + $0.10* Example: $1000 Charge Interchange Only $15.60Debit
o Interchange Rate: – Regulated: 0.05% + $0.22*– Unregulated: 0.65% + $0.15, capped at
$2.00* Example: $1000 Charge Regulated Unregulated $0.72 $2.00
Shared Benefits
o Next day funds, where available
o Consumer saRsfacRon, preferences are leaning
towards cards
o Ease of integraRon online and mobile
Outlook
o
EMV
– What is EMV?
• EMV chip technology is becoming the global standard for credit card and debit card payments.
Named aler its original developers (Europay, MasterCard® and Visa®), this technology features payment instruments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardholder data. This standard has many names worldwide and may also be referred to as: "chip and PIN" or "chip and signature."
– Liability shil date is October 1st! 121 DAYS!
o
Contactless Payments: Apple Pay and Samsung Pay
o
eWallets: MasterPass, Google Wallet, Visa Checkout, Serve
o
Millennials: Entering the workforce and becoming
tax-‐payers and homeowners
Rebecca Mayer
What We Do At TTX
The Office of the Treasurer & Tax Collector
serves two basic funcRons for the residents
of the City and County of San Francisco:
–
The collec@on of taxes and other CCSF revenue in
excess of $2 billion annually
–
The conserva@on and oversight of monies before
disbursement. TTX manages all city funds
including inves@ng in the City’s porsolio of pooled
funds
Credit Card Fee Structure
o
FIS Global – Taxpayer Pays Convenience Fee
–
Business Taxes
• 2.55% Credit Cards (American Express, Discover, MasterCard, Visa)
• $3.95 Flat Fee Debit Cards
• Free Electronic Checks
–
Property Taxes and Delinquent Collec@ons
• 2.25% Credit Cards (American Express, Discover, MasterCard, Visa)
• $3.95 Flat Fee Debit Cards
• Free Electronic Checks
o
Over the Counter POS Processing – TTX Absorbs Fees
–
Delinquent Collec@ons Limited
–
Golf Cards
Payment Behavior 7/1/13-‐6/30/14
Over the Counter 8%
Mail Remi*ance 79%
ACH/WIRE 13%
Break Outs
Over the Counter Break Out
Cash, 33,228 Check, 59,326 Paper Check, 412 Credit Card, 7827
Other Break Out
Mail -‐ Check, 1,002,518 ACH / Online, 158,231 Secured Wire, 1554
Online Payment Break Out
eCheck, 56,460 American Express, 8,867 Visa, 29,711 MasterCard, 9,447 Discover Card, 682 Pinless Debit, 2,297Robust Remi*ance Engine
Proposed Workflow Singles & Multi’s August 12, 2014
Data Completion
CUS Job (background) Balance amounts wth
Name and Address lookup to verify
amounts
Amount Due = Check(s)?
Anything on the memo line to indicate taxpayer
intent? (AFE) Exceptions Yes Reject No Mark amount as paid And Kill Yes p1load Name Address Amount assignment
Mark amount as paid And Kill Amt Due < checks ? No Yes No Proposed Workflow Exceptions Client August 12, 2014 Load Into Exceptions Client
Item Missing Stub That Wasn’t Sent In
Or Inserted? Insert Stub
Kill
Does The Item Have A Donation Amount But MS Was Not Set?
Insert Art Fund Document
Does The Item Appear To Be A Commingled
Payment? Send To Commingled Client No No Yes Yes Yes Reject No Revalidate The MS Field
Roadmap
• Requirements Remivance Improvements • Discovery Credit Card Expansion Summer 2015 • Remivance Tes@ng • Credit Card Equipment Upgrade Fall 2015 • Remivance Enhancement Go Live • Credit Card Over the Counter Expansion Winter 2015/2016Please provide feedback on the session
o
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