The purpose of this report is to seek approval for the staff request to charge a credit card convenience fee for payments received by the Town via the Niagara-on-the-Lake website (www.notl.org) and to obtain Council approval for the Lord Mayor and Clerk to execute the service agreement with Paymentus. 3. BACKGROUND In order to provide extended customer service to residents, the Town accepts credit card payments at all locations for a number of services. However, discount fees and credit card charges are expensive and have not been included in the 2011 operating budget. Staff members have contacted other local municipalities and NOTL Hydro to find out how they manage their credit card discount fees and charges. Town of Pelham, Town of Lincoln, and NOTL Hydro utilize Paymentus to process credit card transactions and are very satisfied with the services Paymentus provides to their customers. 4. DISCUSSION / ANALYSIS
In the retail industry, businesses accept credit card payments as an incentive for customers to purchase goods and services from their businesses. In the credit card industry, point schemes are used by the credit card industry to entice customers to use credit cards to purchase goods and services. Both of these incentives are costly to merchants that accept credit card payments.
The Town does not need to entice customers to purchase its goods and services. The Municipal Act sets out that property tax shall be collected by municipalities and the act allows municipalities to begin tax sale proceedings for properties that are 3 years in arrears of property tax payments. The Town may budget for this item. However when considering the 2.05% (approximate) credit card discount fee and an average tax instalment of $951.00, the cost of accepting a credit card payment is approximately $19.50 per credit card transaction. More importantly, this cost must then be passed on to all tax payers.
To avoid these charges but still give tax payers the option to use credit cards to pay their tax bills, staff members are recommending Paymentus. If approved, this service will be offered through the Town’s website. From the Town’s website, a resident will click on the link to the Paymentus website and they must agree to the convenience fee. For non-property tax payments up to $100.00, the resident will be charged a $3.00 convenience fee. For property tax payments over $100.00, the system will charge 2.75% of the payment amount for the convenience fee. Paymentus has the further advantage of allowing residents to make their property tax payments and other miscellaneous payments from home over the internet or by phone.
Paymentus is a Payment Card Industry Data Security Standard (PCI DSS) Level 1 compliant company and is audited annually by a Qualified Security Assessor (QSA). The PCI DSS is a multifaceted security standard that includes requirement for security management, policies, procedures, network architecture, software design, and other critical protective measures. Note that there are 4 levels of PCI Compliance, with Level 1 being the highest.on maintain a secure environment. Residents that pay their property taxes via the Town’s website can feel confident that their credit card information is handled using the PCI DSS protocols.
The Town will accept cash, cheques, and direct debit at all departments. The Town also offers pre-authorized automatic withdrawals from the resident’s bank account on either a monthly or by instalment due date option for property tax payments.
Credit cards will still be accepted for dollar low-value services such as parking fees at the Town’s Pay and Display parking meters. 5. FINANCIAL IMPLICATIONS For 2011, the Town has incurred approximately $12,600 in credit card discount fees. Once Paymentus is fully implemented, the Town will no longer have to incur credit card discount fees. 6. COMMUNICATIONS Once approved, Finance staff will meet with Communications and Customer Relations staff to ensure that the change is fully communicated to the Town’s residents. Paymentus will provide assistance to the Town through a User Adoption program. The program will include marketing templates and best practices for increasing user adoption. For example, bill inserts and/or specific wording for print ads. 7. CONCLUSION Staff members have fully researched options for credit card payments. Based on the success of other local municipalities, staff members are recommending Paymentus as the on-line credit card processing agent. Once the agreement has been signed, the Finance department are committed to have the new payment option available and fully implemented no later than December 31, 2011. Prepared by, Brenda Garrett Manager of Finance/Treasurer Respectfully submitted, Sheldon Randall Director of Corporate Services Mike Galloway Chief Administrative Officer ATTACHMENTS MSA Signed by Pmtus.pdf