Government Acceptance of Credit Cards
Yesterday, we had a meeting to discuss online credit card acceptance. Government agencies generally recognize that in the long run, online transactions will save money and many online applications, including tax payment, accept credit cards in some form. The problem is that in the short term, business is more expensive during the time when an agency must continue to maintain over-the-counter services AND provide online services, adding credit card fees to the mix. Current fees amount to about $1.5 million. This is an old issue and really is coming up due to agency (and the Governor's) desires to reduce online fees. Credit card companies point out that government often does not fully recognize the cost of accepting cash and checks. Government Technology Magazine's article on the issue presents the typical response:
Credit card fees are not factored into annual e-commerce budget appropriations. E-commerce applications brought online midway through an agency's budget cycle must record credit card surcharges as expenditures against the appropriation. The surcharges drain dollars earmarked for technology enhancement and application development. As online transactions increase, officials will need to accurately track them, estimate future annual Internet sales and expand e-commerce budgets to account for the surcharges.
In some cases, the Utah legislature has dealt specifically with the credit card issue, even allowing them to be used to pay outstanding debt to the state, "make rules that allow accounts receivable to be collected over a reasonable period of time and under certain conditions with credit cards" (Utah State Code 63A-8-201)
In a survey performed a couple of years ago by the NECCC, most states were accepting credit cards and the fees were generally absorbed by the receiving agency. Another old survey performed by the state of Texas reviewed state portals, including the use of credit cards. Tennessee's credit card procedures may be helpful.
CIO Comments on Credit Card Fees
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