4.4. SR 02-13-2012REQUEST FOR ACTION
TO ITEM NUMBER
Ma or & Ci Council 4.4
AGENDA SECTION MEETING DATE PREPARED BY
Consent Februa 13, 2012 Lori Ziemer, Asst. Finance Director
ITEM DESCRIPTION REVIEWED By
Credit/Debit Card Acceptance Policy Tim Simon, Finance Director
REVIEWED BY
ACTION REQUESTED
Adopt credit/debit card acceptance polity for the payment of city services.
BACKGROUND/DISCUSSION
One of the action steps identified with the 2011 goals approved by the City Council was to expand the
ability to accept alternative forms of payment for city services. The acceptance of credit cards provides a
quick and convenient payment method enhancing customer service. Minnesota Statute X471.381
authorizes cities to accept payment by use of credit card, debit card, or all forms of electronic transfer,
and adopt policies and procedures regarding the payments.
The Finance Department has contracted with RevTrak to provide credit/debit card processing via online,
phone, mail, and in-person. The city has established the authority to accept the three major credit cards;
Visa, Mastercard, and Discover Card.
Upon approval of the credit/debit card acceptance policy, the implementation of accepting credit card
payments for city services will be initiated very soon as most of the setup has already been completed.
FINANCIAL IMPACT
The credit card processing fee is a budgeted item within the Finance Department budget.
ATTACHMENTS
^ Credit/Debit Card Acceptance Policy
Action Motion by Second by Vote
FOllow Up
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Files\Content.0utlook\SFWAYSNS\Action Request -Credit Card Acceptance Policy.docx
~ Credit/Debit Card Acceptance Policy
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Policy Statement
The City of Elk River accepts credit and debit card payments as a means of paying for city obligations when
it will enhance customer convenience, increase certainty of collection, and/or reduce city processing costs.
Purpose
This policy outlines the responsibilities and security for city employees who are assigned the task of
processing credit/debit transactions.
Definitions
Credit Card: A card or device issued under an arrangement pursuant to which the issuer gives to a
cardholder the privilege of obtaining credit from the issuer.
Debit Card: A card or device issued under an arrangement pursuant to which the issuer gives to a card
holder the privilege of using the card to debit the account of the card holder.
Transaction Fee/Discount Fee• The processing fee imposed by credit card companies on all credit card
transactions. Typically these fees are born by the vendor and built into the overhead costs.
Merchant: The entity selling products or services. In this case the City of Elk River.
Third Party Processor: A vendor contractually obligated to process credit/debit card transactions on behalf
of the city.
Authority
Minnesota Statute X471.381 authorizes cities to accept payment by credit card or other methods.
Overview
The City of Elk River will establish a contract with a third party vendor to process merchant sales
transactions and to provide any related card-processing services.
A. Authorized Credit Card Companies -The city has established the authority to accept three major
credit cards:
• Visa
• Mastercard
• Discover Card
B. Accepted Service/Product Purchases -City fees, services and products may be accepted with a
maximum single purchase no greater than $2,500. Transaction over $2,500 will be evaluated on a
case-by-case basis and approved by the Finance Department prior to the transaction.
Safeguarding Credit Card Transactions
The use of credit cards provides a quick and convenient payment method. Use for financial transactions has
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grown tremendously and customers have repeatedly requested the city accept credit for the services they
use.
A. Fraud -Fraudulent actions may impact the city and the customer. It is important for the city to
maintain practices to protect against schemes against the city as well as activities in which a
customer suffers a loss and the city contributed in some manner to the fraud.
B. General Strategies -Strategies to prevent credit card fraud.
a. The preferred processing methods will be online processing or in-house credit card
"swiping" by the customer. These methods allow the customer to pass their credit card
information through a secure, third-party electronic system. The city does not use or
maintain any card information.
b. If it is necessary to accept methods that require the city to directly obtain a credit card
number, the following precautions will be followed:
i. Only those employees who are authorized to process daily payments will be
authorized to accept and input credit card data. They will be bonded and insured by
the city.
ii. Credit card information shall be entered directly into the third-party application.
Avoid writing down or otherwise documenting the credit card data. In the event that
credit card data is documented, the documentation shall be shredded immediately
following the transaction. Each credit processing station shall have access to a
shredding area.
c. All refunds shall be charged back (credited) to the original credit card.
Violation of this policy may result in, but are not limited to, the following sanctions; the loss of computer or
network access privileges, disciplinary action, suspension, termination of employment and legal action.
Violations that may constitute criminal offenses under local, state, and federal laws shall be reported to the
appropriate authorities.
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