Service Delivery Fee vs. Absorbing the Fee
At the request of the membership, iCash currently offers two methods to pay for the charges associated with accepting credit cards:
Service Delivery Fee method | Absorb the Fee method
Service Delivery Fee method
The Service Delivery Fee method assesses the customer an additional service delivery fee per transaction, on top of the amount the customer is paying the city. In the example below, the amount of the utility bill is $1.00, the service delivery fee is $4.70 for a MasterCard swiped "In Office" as a credit card. The total charge on the customer’s card is $5.70. The city receives the entire amount owed to the city, and the service delivery fee is divided up among the service providers offering the payment portal. The service delivery fee charged depends on where the customer is (in office, on the phone, using a web site) and what kind payment method (e-check, credit card, debit card) is used.
Click here for Service Delivery fees
Visa cannot be accepted as a credit card in "In Office" transactions. In this method, Visa cards must be processed as a pin-debit transaction to allow service delivery fees to be assessed.
Absorb the Fee method
In this method, the city absorbs the cost of each transaction in a monthly invoice. The transaction would process through the portal as above, but the service delivery fee line item would not be included. In this example, the Sub Total and the Total would match: $1.00.
On June 3, 2010, the iCash board approved the following pricing structure for cities wanting to absorb the processing costs instead of passig a service delivery fee on to the customer. The
- Credit card transactions: 3.25% + $0.075 per transaction
- Debit/Pin-based transactions and e-checks: 2.25% + $0.15 per transaction
- Monthly service fee: $45
- Annual Dues and equipment costs also apply
With this rate package in place, the iCash program is positioned to help streamline electronic payment acceptance for cities of all sizes. In a traditional retail model, cities often set up multiple merchant accounts to keep revenue streams separated. The iCash web application eliminates the need for multiple merchant accounts and provides real-time access to payment information. By implementing IPAIT programs sub-account structures, the actual funds can still be segregated if the city so desires.
By offering department, category and item category organizational structures, iCash improves payment reporting for easy reconciliation. The system also allows additional data about the payment to be collected and later exported to Excel or a third-party software system.
- Additional benefits of this pricing model:
- This package allows cities to accept Visa debit and credit cards, MasterCard credit and debit cards, as well as Discover credit cards and e-checks.
- The rates are static, they do not fluctuate based on the type of card used in the transaction, giving cities with known transaction volumes a more reliable pricing model.
- Uses the same great web application offered to the Service Delivery Fee Customers which includes:
- In-Person payments at city facilities, with receipt signature capture equipment
- Payments from the city Web site
- Phone-based transactions
- ICash is the first point of contact for merchant account chargebacks.