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Table of Contents

Lead Story

The legal blitz: Time to regroup

News

Industry Update

Payment trends for 2009

Rainy day ISOs

Panini gives back

Red Flag mayday

Goliath beaten with gavel

Features

Q&A with the ETA

Views

Be a payment security architect

Scott Henry
VeriFone

Give ACH a chance

Biff Matthews
Cardware International

Education

Street SmartsSM:
A closer you'll become

Jason Felts
Advanced Merchant Services

Avoid those third-party blues

Ken Musante
Humboldt Merchant Services

Spot-on PCI programs

Tim Cranny
Panoptic Security Inc.

R-E-S-P-E-C-T

Jeff Fortney
Clearent LLC

Ten keys to superior employee selection

Curt Hensley
CSH Consulting

Get rewarded with loyalty

Christian Murray
Global eTelecom Inc.

Company Profile

Vision Payment Solutions LLC

New Products

Simply dynamic POS software

TransactionX
Company: 1stTransaction Corp.

No-cost processing for government agencies

Federal Payments
ACH Direct Inc.

Inspiration

United we stand

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

November 10, 2008  •  Issue 08:11:01

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New Products

No-cost processing for government agencies

Product: Federal Payments

Perhaps it comes as a surprise that most Department of Motor Vehicles branches across the United States do not accept in-person electronic payments, only cash or checks. According to Jeff Thorness, President of ACH Direct Inc., the reason is twofold.

As state government agencies, DMV budgets may not allow for the expense of face-to-face electronic payments. Or, due to regulations, DMVs may not be authorized to pass on interchange fees to consumers, forcing them to absorb that cost themselves.

But, recently, MasterCard Worldwide, Discover Financial Services and American Express Co. authorized a convenience fee at government agency POSs.

"The convenience fee is a fee to the consumer for the convenience of being able to use that payment methodology," Thorness explained. "What it does is it pays for interchange. So, instead of the government absorbing the costs associated with credit card acceptance, the payer ends up absorbing those costs."

ACH Direct's Federal Payments service now uses the convenience fee feature, allowing government agencies like DMVs to accept credit and debit cards in person.

Federalized

"The good thing here is that it doesn't cost the government anything," Thorness said. "We're supplying the terminal for free. We're processing the transactions for them for free. The people who choose to make the payments with a credit card are the ones that are paying the processing costs. And so it's a win-win for everybody."

According to Thorness, consumers are told upfront about the convenience fee and accept the fee as a part of paying with plastic.

This new Federal Payments feature was rolled out in August 2008. More than 500 VeriFone VX 570 Dual Comm POS terminals were placed in the DMV offices of an, as yet, undisclosed state that boasts one of the top 10 largest cities in the country.

Payments are processed over ACH Direct's Payment Card Industry Data Security Standard compliant PaymentsGateway platform. Thorness reported that ACH Direct is already processing 30,000 transactions a month on those terminals, with over $2 million being transacted per month. "That's a pretty high adoption rate," he said.

Uncle Sam wants you

The Allen, Texas-headquartered processor is looking to expand Federal Payments across the United States and is finalizing its revenue sharing program for its reseller channel.

Thorness said resellers would need a little training on the rules and regulations related to convenience fee processing. "It's a little bit different than what they're used to as a standard credit card ISO," he said. "But it's not that much more to learn. It's not a big difference."

Federal Payments is not solely designed for the government sector. Colleges, universities, utility companies, nonprofit agencies and other organizations can also be set up with convenience fee processing.

ACH Direct Inc.
866-764-2002
www.achdirect.com

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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