Funding Models Payments

With eGov Strategies' service fee program, government agencies can cover the cost of credit card processing by charging a flat rate, a percentage of the transaction or a mixture thereof.

Service Fee Model

In a service fee model, users of the payment system are charged a “service fee” for select payment transactions that are completed. Typically, the service fee can be implemented either as a percentage of the transaction or as a flat fee (e.g. $ 1.50 per transaction).

This additional charge generally goes to eGov to cover costs incurred from the payment processing for credit and debit card processing charges (e.g. from Visa, MasterCard, Discover, etc.), for the vendor’s software license, for implementation costs and for ongoing software maintenance and support charges.

Understanding Service Fee Processing

eGov Strategies provides a service fee program for government merchants seeking to accept credit cards but lacking a budget for the costs associated with processing credit card transactions.

With this program, all processing costs are passed to the cardholder making the payment. See Below for the rules and regulations provided by the credit card industry:

Absorbed Fee Model

In an absorbed fee model, the local or state government agency can deploy payment center items to their website that do not charge the constituent ANY ADDITIONAL FEES. This model significantly drives adoption of the various online payment methods – eliminating data entry and decreasing customer service costs.

In this model, the client is charged either a monthly or annual subscription fee or a one-time licensing fee and annual recurring software maintenance and support fees. In addition, the client pays the various payment processing charges associated with running credit card, debit card and e-check transactions. These are billed on a monthly basis by merchant services providers. 

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“Yavapai County selected eGov Strategies through a Request For Proposal process and due to their competitive rates and positive feedback from our departments, we keep renewing our contract with them each year.”