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:
- VISA Core Rules and VISA Product and Service Rules - Link to PDF
- International VISA Operating Regulations - Link to VISA website (PDF Document)
- Summary of Service Fee Processing Guidelines - View PDF Document
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.
More about Payments
“Working with eGov has helped Androscoggin Bank differentiate ourselves within a highly competitive government banking market by offering their online and over the counter credit card payment services (www.androgov.com). Our municipal and school clients like the flexibility and variety of options that eGov provides. The Bank has developed a great working relationship with eGov over the past few years, as well.”- ANDROSCOGGIN BANK - ANDROGOV.COM