Info Circ 01-a-009 - Statewide Credit Card Acceptance Contract

Most of you are familiar with House Bill 2323 of the 2000 Legislative Session and its provisions requiring the acceptance of credit cards by all state agencies after June 30, 2001. A statewide contract has been awarded to Paymentech, LLC to process credit card transactions for the State of Kansas. Paymentech, LLC is the second largest processor of credit cards in the country and it is their only business. There have been many questions asked about why we need a statewide contract instead of letting agencies use their local banks or existing contracts. The fee structure for processing credit cards is extremely complex and can be quite expensive. By awarding a statewide contract, the State can obtain further discounts as most credit card fees are based on the number of transactions and the average dollar value of each charge transaction. With the statewide contract, all charges and transactions are aggregated on a statewide basis by all agencies instead of on an agency by agency basis. The statewide contract also includes contracts with Official Payments Corp., Discover Card and American Express.

To assist in implementing a credit card acceptance program at your agency, representatives from each of these companies have been asked to attend the November 29th ASTRA meeting. The ASTRA agenda has been blocked from 1:00 - 4:00 P.M. for the vendors to discuss their portion of the contract and to answer any questions you may have for them about implementing a credit card acceptance program at your agency. In addition, the vendors will remain in Topeka and be available from 9:00 - 12:00 on the morning of November 30th for additional questions or discussions as may be required. The reason for having contracts with four vendors rather than one will be apparent to you after attending this meeting.

We strongly urge your agency to send a representative to this meeting. Before attending, it would be beneficial to put some thought into discussing and writing down answers to the following questions:

What applications will your agency have for credit card payments
How will customers access your agency's services
- Walk-in (face-to-face)
- Website
- Interactive Voice Response (IVR) system
- Mail
- Telephone
- FAX
Is your agency willing to absorb the fees associated with accepting credit cards
Is your agency going to charge a convenience/surcharge fee for accepting credit cards (require the customer pay the fee for the convenience of using a credit card)
What kind of equipment do you need (swipe machine, printer, PC software, telephone line, what brand, etc.)
How many pieces of equipment will you need
Are you going to purchase or lease the equipment
How many employees will have to be trained to accept/process the transactions
How will you market your policy for accepting credit card payments
Do you have insurmountable problems involving the acceptance of credit cards

For more information and to register for the ASTRA meeting, please visit the ASTRA website at:

http://www.da.ks.gov/ar/forum/astra/

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