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King County’s E-Commerce Plan
DRAFT
Electronic PaymentManagement Plan
November 2014
Version v1.1
November, 2014
Table of Contents
Preface3
Executive Summary4
1.Background5
1.1Current State of Electronic Payments for King County Services6
2.Overview of Issues7
2.1Electronic Payments7
2.2Electronic Payments, Banking8
2.3Electronic Payments, Information Technology9
2.4Electronic Payments, County Financial Systems10
2.5Electronic Payments, Other Considerations11
3.Electronic Payments Strategic Planning12
3.1King County Strategic Vision and Goals12
3.2Guiding Principles12
3.3Vision Statement12
3.4Benefits13
4.Analysis14
4.1Summary Discussion14
4.2Industry Trends15
4.3Policy Discussion16
4.4Recommendations19
4.5Preliminary Work & Planning20
Appendix A – Document References
Appendix B: County Code Provisions
Appendix C: Planning Options; Payment Channels
Appendix D: Regional Electronic Payments Policies
Appendix E: County Electronic Payment Inventory
Preface
The last version of what was then the eCommerce Management Plan was completed in September 2004. The Plan was in response to the King County Council’s request for a countywide eCommerce Management Plan. It discussed the approach King County was taking to lay the foundation for enterprise-wide eCommerce services.
A key component of the original plan was the development and implementation of an in-house developed payment engine. In addition the County Council adopted ordinances, the Executive implemented administrative policies and management plansintended to facilitate and support the expanded use of electronic payments.
Because 10 years has passed since the last plan update, this version of the plan will be almost entirely new content. In addition the plan has been updated to focus on the intricacies of electronic payments as opposed to the broader nature of “eCommerce”.
In the time since the last Plan was published the electronic payment industry has undergone significant changes in terms of technology and business practices. Of particular note has been the continued shift away from traditional payment methods of cash and checks to a wide range of electronic payment options. The growth in electronic payments by consumers and businesses has continued to grow to the point that electronic payments out pace check payments by a ratio of almost 4 to 1.
(2013 Estimated County Electronic Payment Utilization)However, implementing electronic payments across the broad and diverse set of services provided by the County is not without significant challenges. The original eCommerce Management Plan envisioned an enterprise level policy and technology approach while allowing for exceptions on an as needed basis.
Up to this time the County has had mixed success in being able to take advantage of electronic payment options. Implementation of the ORCA card and online payment of property taxes standout as high value successes. Anecdotal feedback indicates that there is significant interest by both constituents and departments to be able to use electronic payments for most all financial transactions with the County.
Key Points:
The existing Plan provides for “a one-size-fits all” electronic payments policy. Due to significant variations in department and agency needs, optimal solutions need to be based the potential customer benefits, costs and savings for each program area.
This version of the Plan is proposing a shift in policy and technical approach which sets electronic payments as an expected payment option for all agencies.
Executive Summary
A frequent refrain throughout County constituent feedback mechanisms is the question, “why can’t I pay by credit card”?
In response, our question is, “How can we make it easier for constituents to do business with King County”?
The intent of this new Electronic Payments Management Plan is address the aforementioned questions by fundamentally changing the manner in which electronic payments are folded into existing payment options for customers. In doing so the Plan will be recommending entirely new approaches to the manner in which electronic payments are viewed and managed. Key outcomes include:
· Make it easier and more convenient for the public and firms to use credit cards and other electronic payment types to conduct County business (this is the primary objective of the project)
· Develop new electronic payment policies and establish a management framework which will accommodate the very broad range of agency needs for electronic payment implementations
· Provide direct and targeted support to agencies for the analysis, planning and implementation of electronic payments, including the expansion of current payment applications and the development of new payment applications
· Provide an enterprise level electronic payment solution(s) for County government—part of being the “Best Run Government.”
The (draft) Electronic Payments Management Plan vision statement:
Expand access to and improve County services through the addition of a range of electronic payment options
1. Key Plan recommendations include:Adjust the manner in which the County views and manages electronic payments by making electronic payment services a standard operating expectation for every agency.
2. Establish a flexible policy, support and management framework to both encourage and support electronic payment services throughout the County.
Background
There are significant opportunities across the County to expand existing services and implement new electronic payment options for constituents and businesses. Furthermore, anecdotal feedback and empirical market data suggests that there is significant constituent demand for electronic payment options.
The 2013 Federal Reserve Payments study graphically illustrates the fact that electronic payments are continuing to outpace the use of checks by a wide margin.
In comparison, only about 20% of County agency programs offer electronic payment options.On a regional basis the County online payments for property taxes likely surpasses other jurisdictions in terms of total electronic payment revenues but unlike many cities in the region the County does not offer electronic payment options for the majority of services it provides. (Appendix E).
At the same time there are an array of fiscal, policy and practical issues associated with adding electronic payment options. Further complicating the picture is the fact that each program area has different business needs, legal restrictions and technical architectures.
Current State of Electronic Payments for King County ServicesExisting Ordinances, Policies and Adopted Plans
Appendix A
Existing Electronic Payment Revenues and Services
Total annual revenues v. Amount of electronic payment revenues
The County currently provides electronic payment options for a number of programs. The actual business requirements and implemented structures vary greatly. Some programs will require a full range of functionality to be provided directly through the vendor’s products and services, while others will need only select elements. Comment by Backman, John: In our RFP we may want the vendors to provide quotes or cost information for our existing electronic payment services. That would give us an apples to apples baseline and we would have a better idea of the costs/impacts associated with cutover.
Summary of Existing Electronic Payment Services:
Dept. or Agency
Program
Payment Type
Transaction Fees
2013 Revenue
2013 Transactions
DAJD
Adult Inmate Accounts
Online
Convenience
NA
41,194
DES
Birth and Death records fees
Online
Convenience
$529,558
14,703
DES
Document Filing fees
Online
Convenience
$ 9,074,537
95,527
DES
Pet Animal shelter donations
Online
Absorb
$ 9,444
101
DES
Pet Licenses
POS
Absorb
$ 224,651
2,176
DES
Pet Licenses
Online
Absorb
$ 1,851,249
47,575
DNRP
Capacity Charge Economics System
Online
Absorb
$ 9,673,796
41,761
DNRP
Parks scheduling and classes
POS
Absorb
$ 811,336
21,525
DNRP
Transfer station fees
POS
Absorb
$ 16,943,092
397,029
DOT
Fare Media not including ORCA
POS
Absorb
$ 429,482
2,816
DOT
ORCA
POS
Absorb
$ 1,184,892
27,107
DOT
ORCA Card Purchases
Online
Absorb
$ 39,744,232
566,564
DOT
Water Taxi Fares
POS
Absorb
$ 281,981
37,346
FBOD
Property Taxes
POS
Convenience
$ 1,029,091
559
FBOD
Property Taxes
Online
Convenience
$167,307,778
45,283
KCDC
Court levied fines
POS
Convenience
$ 2,398,811
16,232
KCDC
Court levied fines
Online
Convenience
$ 5,137,604
33,174
KCDC
Corrections fees
Online
Convenience
$ 27,953
6,722
KCE
Candidate filing fees
Online
Convenience
$ 57,884
202
SKCPH
Clinic and Vital Records fees
POS
Convenience
$ 480,071
9,019
SKCPH
Environmental health permits
POS
Absorb
$ 1,684,855
3,700
SKCPH
Environmental health permits
Online
Absorb
$ 4,449,276
12,442
Totals
263,331,573
1,422,757
Overview of IssuesElectronic Payments
At a base level, the addition or expansion of electronic payment options touches every aspect of payments, including, but not limited to:
Payment channels
The payment channel can be thought of as the road to making a payment. Traditional payment channels include counter service, mail and drop-box, electronic payments expands options to include online, kiosk, IVR and mobileoptions.
Payment types
The Payment type is the means of making a payment. The current County standard is cash and check payments. The addition of electronic paymentsopens a plethora of options by both expanding payment options through existing channels, such as counter services, but also makes it possible to expand into a number of entirely new channels such as online and mobile payments.
It is important to note that not all payment types will be appropriate or will work with every payment channel. Please see Appendix C for a simple breakdown of payment channels v. payment types.
Cost of money
New electronic payment options will impact accounts receivable operations and operating costs in some manner. There are far too many variables to begin to make broad brush statements regarding the magnitude and net impact associated with new payment options. None the less, the addition of new payment channels and/or payment types will involve new operational costs. The policy question is how to pay for the additional services.
Electronic Payments, Banking
Capture and Transmit
Whether a payment is made at the counter or online, an electronic payment requires new means to digitize the payment information and transmit the payment to the payment processer. Typically at the counter this would be the addition of a card swiper or online, the implementation of a “shopping basket” and payment engine.
Payment processers
Closely tied to the capture and transmission of the electronic payments is the payment processer. Again there is a wide variety of processor services and options depending on specific needs. In some cases the payment process will also provide the payment engine and possibly the shopping cart for online services. Again individual program requirements will dictate the payment flow requirements.
Bank Merchant Account
A final element of the payment processing will be the daily deposit of receipts to the program’s bank merchant account. The County’s Treasury Division can establish new bank merchant accounts for programs using electronic payments.
Transaction Fees
XXXXXX
Electronic Payments, Information Technology
Point of Sale (POS)
It is important to note that the County does not currently have an integrated POS solution for in-person, counter services. The lack of an enterprise POS eliminates one possible integration point for electronic payments, but it should be recognized and assumed that a POS solution could be implemented in the future.
Operational Backend Applications
(Examples of existing online services and backend integrations such as the property tax system)Whether developed in-house or licensed by a vendor, most programs will be using some form of information technology system(s) to support management operations and customer services. Each system will have unique requirements for the implementation and/or integration of electronic payments. At one end of the spectrum would be a loosely coupled arrangement, often requiring duplicative work to keep the electronic payments in sync with the backend system. At the other end of the spectrum would be fully integrated systems. Integrated systems will often impose specific requirements regarding options for payment system integration.
Electronic Payment Solutions
An entire industry as developed around the provision of electronic payments. There are a wide range of payment processor vendors which can offer a full range of electronic payment systems and services. In addition to the payment processing options, the credit card companies themselves have rolled out a variety of offerings, some of which are specific to the government sector. For example VISA now offers reduced transaction rates for certain types of tax and utility payments.
Integration and Interfaces
Backend system integration and interface requirements will vary greatly. Some business system requirements will require high levels of system integration particularly in those cases in which online transactions must insert new records and data in County backend systems. On the other hand there will be many cases in which little or no system integration is required. An example of this latter type would be the SAAS solution used by Public Health for providing public access to vital records (e.g. birth and death certificates).
Vendor Solutions
Some vendor solutions may be architected and/or licensed in such a manneras to require the use of a prescribed set of electronic payment options and services. These situations will require individual evaluation and exception approvals.
King County examples of information technology and electronic payment solutions which include integrated payment solutions include:
· DAJD Adult Inmate Account management system provided by AccessCorrections
· Public Health online vital records system provided by VitalCheck
It is often the case that not only is the electronic payment solution tightly tied to the information technology system, but there are significant business and customer service requirements which support the integrated service model.
Security
There are a wide range of risk management issues associated with the security of payments and payment information. While the addition of electronic payments can reduce, eliminate and/or reduce some of the risk issues related to the physical security of cash and check transactions, electronic payments imposes a whole new set of issues and requirements.Most of the electronic payment security requirements are propagated by the Payment Card Industry (PCI).
The County is required to submit quarterly PCI compliance reports. Since the County hosts its own payment engine, the PCI compliance reporting in a significant body of work. Comment by Backman, John: Needs to be confirmed.
Government agencies in particular face significant challenges in regard to not only the banking security of electronic payments, but in the related terms of personally identifiable information and additional security requirements such as HIPPA and (public safety).
Electronic Payments, County Financial Systems
Financial System
XXXX
Treasury Operations
XXXXXXXXXXX
Electronic Payments, Other Considerations
Legal Restrictions
To complicated matters even further, some electronic payments are regulated by County, State or Federal law. For example, RCW xxxx prohibits the use of “tax” receipts to pay for the transaction fees associated with electronic payments. The collection of “fees” is not subject to this State requirement. At the sametime KCC, 4A.601Electronic Payments (Appendix B) requires that the customer pay a convenience fee to cover the cost of electronic payments for County services. Exceptions to this policy must be approved by Council action.
Regional andShared Services
The County routinely enters into a variety of regional affiliations and service delivery agreements. In some cases the regional service delivery and fees associated with the service will be receipted and/or processed through systems outside of the County’s direct control. These regional systems may require the use of information technology and payment systems other than the County’s systems. Some of these regional systems are provided directly by vendors and others through host government agencies
Examples of external regional systems include:
· ORCA cards (vendor?)
· Food Handler Permits (state-wide, Pierce County)
· Vehicle Licenses (state DOL)
There are also cases in which the County serves as the regional IT host and/or service provider:
· KCGIS training and services (planned)
· DES/RALS animal services and pet licensing
· Police contract services
The aforementioned examples are but a few of the myriad of the regional and external services in which the County either participates and/or provides.
As a related note, interlocal and regional services provided by the County very often involve periodic service charges. One of the Plan objectives includes options for electronic invoicing and payment options for these kinds of interagency service charges.
Electronic Payments Strategic PlanningKing County Strategic Vision and Goals[footnoteRef:2] [2: http://www.kingcounty.gov/exec/PSB/CountyStratPlan.aspx , August, 2014]
The adopted King County Strategic Plan, 2010–2014: “Working Together for One King County” is a key component of the King County Management Model. It embodies the priorities of the residents of King County and the values of the elected officials in the King County government. It is designed to guide decisions in times of fiscal challenge as well as prosperity. The plan also represents the county’s commitment to deliver services that meet and exceed the standards of professionalism, efficiency, quality, and customer service.
Guiding Principles
The following guiding principles were used to frame this version of the Electronic Payment Management Plan:
· Alignment with the adopted vision, principles and goals of the adopted 2010–2014King County Strategic Plan
· Fiscally prudent
· Improves customer services
· Compliant with federal, state and county codes
· Secure and reliable
Vision Statement
Expand access to and improve County services through the addition of a range of electronic payment options.Comment by Backman, John: Placeholder vision statement
Goals
Constituent Services
· Save constituents and businesses time and money
· Expand access to services by offering more transaction and payment options
· Reduce the need to physically travel to County offices to conduct business
Organizational
· Improve customer services and experience
· Provide operational consistency and support for electronic payments
Objectives
· Implement a flexible electronic payment policy and operational framework to meet department business needs across the organization
· Leverage existing organizational and technology investments
· Continue to evolve electronic policies and management plans as technology and electronic payment options change
Benefits
Strategic: One County
Strategic: Best run government
ESJ[footnoteRef:3]: Opens the possibility for new service and payment channels while at the same time recognizing concerns regarding equitable access to services [3: King County Equity and Social Justice Initiative]
Organizational: Provides a consistent, but flexible management policy framework to meet the unique needs of all County agencies and departments
Fiscally Prudent: Reduces cash and check handling costs as well as associated risks
Green: Reduces vehicle lane miles
Green: Eliminates or reduces printed paper forms and invoices
AnalysisSummary Discussion
Based on experience gained since the eCommerce Management Plan adoption in 2005, it is clear that implementation of the policy has not been as successful as envisioned. On one hand the single largest electronic payment dollar volume service, property taxes, has been successfully implemented under existing policies. In 2013 the service receipted $168m in credit card and eCheck payments for property taxes. Although the dollar amount was significant, it represented only 4% of the total 2013 property tax revenues (about $4b)[footnoteRef:4]. In comparison the tap-to-pay ORCA card program receipted almost $40m but had almost 567,000 transactions. [4: In addition to KCC, State RCW prohibits the use of tax payment revenues to cover the cost of electronic payment transaction fees.]
The most significant contrast between the aforementioned examples is that the online property tax system, fully utilizes the policies established by the 2005 eCommerce Management Plan. Due to a variety of factors, the regional ORCA card program requested and received exemptions to policies requiring the use of convenience fees and use of the County electronic payment engine.
Historical data and anecdotal feedback indicates that a significant percentage of electronic payment services requests seek exceptions to existing policies.The reasons and business needs driving exception requests vary greatly depending on individual department needs and circumstances.
2013 County electronic payment transaction data clearly indicates that the preponderance of transactions is for services which have soughtan exemption to the transaction fee policy. If electronic payments for property taxes are excluded, a similar trend is apparent in the 2013 electronic payment revenues.
Over 50% of existing electronic payment services are using alternative payment engines or processors for a variety of business reasons. Of the electronic payment requests recently submitted or discussed, two-thirds have indicated that they will seek policy exceptions.
Given the significant breadth and diversity of County services and the rapidly evolving electronic payment landscape, County data indicates that the provisions of the existing eCommerce Management Plan are only partially meeting the needs of departments. Given this background and current trends, it is clear that the County’s electronic payment policies need to be updated and enhanced to take advantage of existing and emerging electronic payment opportunities
Industry Trends
Electronic payment providers and processors have been adjusting services and fee models – for example utilities and payment of taxes using electronic payments (credit cards) now have access to special, lower transaction fees. Also most of the major credit card providers now offer various means to add a “convenience fee” to transactions.
Business practices and trends in the government sector is a somewhat muddier picture. In many cases local government agencies have chosen to absorb transaction fees but there are also many agencies that have implemented electronic payment options with convenience fees.
(Departments and programs that are interested in seeking Council approval to absorb electronic payment transaction fees should plan to make their request as part of the 2015 - 2016 budget process.)
Policy Discussion
The primary policy level issues are:
.
· County, state or federal law
· County administrative policy
· Vendor/application specific requirements
· Regional, state or national government services
· System and data security
Secondary policy level issues include:
· Regional comparisons
· Customer preference
· Equitable customer access
· Fee recovery policy
Related agency and department issues include:
· Unique department needs and business requirements
· System change or new implementation and support costs
· Program specific policy and legal requirements
· Budget capacity and/or fee changes
· Limited FBOD electronic payment system knowledge and support services
County specific policy issues include:
Transaction Fees
The costs associated with the addition of new electronic payment channels and payment types generally fall into one of two categories;
· One-time start up and implementation costs usually related to software licensing and payment processing hardware. In some cases there may also be some direct organizational support costs such as additional staffing.
· On-going transactional costs for the electronic payment processing services
The one-time start-up, implementation and direct organizational operating costs can vary greatlyand are typically managed through the budget process. These types of costs will not be included in this policy discussion.
On-going electronic payment transactional costs are the focus of this policy analysis and discussion. As covered earlier, state RCW and KCC provide specific regulations regarding electronic payment transaction fees. In short the state RCW prohibits the use of “tax” revenues for the purpose of paying electronic payment transaction fees. In other words, if electronic payment options are offered, the cost of the transaction fees must be paid by the user. The County’s 2014 vendor (FIS) rates for online payments are 2.35% for credit cards and $1.49 for an eCheck for electronic payments which average $35 per transaction.
The state RCW regulation applies mostly to the collection of property taxes. The majority of other fees charged by the County are not considered to be service fees as opposed to “taxes”.
With respect to County service fees, KCC 4A.601 Electronic Payments (Appendix B). Specifically, “A department or agency may accept electronic payments for a service it offers, only if the person making the payment bears the transaction fee in such an amount as determined by the finance and business operations division in accordance with state law”.
The ordinance does have an exception provision, however; all exceptions must be formally approved by the Council. Typically agencies and departments seeking a policy exception have done so through the annual budget process.
As noted earlier in this section, there is a very clear trend by agencies and departments toward electronic payment service models which absorb transactions fees over those that charge convenience fees. Anecdotal feedback includes:
· Customers dislike convenience fees
· Implementing convenience fees creates more work in terms of system configuration, maintenance and accounting
· Comparable services by other government agencies in the region are in many cases not charging convenience fees
· The interlocal agreement or regional service prohibits the imposition of separate convenience fees
As a general statement the private sector model is to absorb electronic payment transaction fees as a cost of doing business. Of course there are notable exceptions to the general practice. With the exception of tax receipts, it appears that the local government sector has generally followed the private sector lead and is absorbing transaction fees. Appendix D provides some information regarding the practices regarding transaction fees for cities in King County and Snohomish County.
Policy Question:
Should customers be required to cover the cost of electronic payment options?
Electronic Payment Systems and Processors
At the time the 2005 eCommerce Management Plan was adopted, the prevailing view was that a County developed and supported payment engine would best meet the needs of departments and be an optimal enterprise solution, both to help manage operational costs as well as the best means to manage online security.
Since that time the County has rolled out 19 electronic online payment services, 10 of which utilize the County payment engine. A detailed list is available in Appendix E)
Since the 2005 Plan was adopted the landscape for electronic payment services has evolved considerably. Not only have the number and types of electronic services expanded, but vendors have also expanded their service and support offerings. In the same timeframe both Payment Card Industry (PCI) compliance requirements and online security risks have increased significantly.
There are a number of embedded issues regarding the payment engine, including but not limited to:
1. A number of County online services have been developed around the in-house payment engine and related shopping basket function. Changing to a vendor solution would require conversion to new systems, including the development of some frontend system logic for the shopping basket function.
2. The functionality provided by the County’s payment engine is somewhat limited when compared to the services and functionality that can be provided by vendor solutions. The County’s payment engine services and functionality could be updated and expanded but would require an investment and would increase operating and support costs.
3. PCI requirements continue to expand and increase as the number and types of external threats increases. Risk and security management demands will continue to increase for the foreseeable future.
Policy Question:
Should the County continue to support an in-house developed payment engine or test the market for possible licensingof a vendor provided solution?
Recommendations
Key to the creation of a new Electronic Payments Management Plan will be the review and possible revision of the following policy and code provisions.
While both the policy and code have provisions for exceptions to established management practices and technical requirements, changes in technology and the banking sector ……….
King County Code - 4A.601.010 Policies - convenience and transaction fees
http://www.kingcounty.gov/council/legislation/kc_code/07_Title_4A.aspx
Recommendation:
Rescind or modify the baseline requirement for the use of electronic payment convenience fees. Either move the responsibility for evaluation and management to the executive or modify the code language to allow for a more flexible approach to managing the transaction fees associated with electronic payments.
Administrative Policy – Accepting Electronic Payments; http://www.kingcounty.gov/operations/policies/aep/financeaep/fin85aep.aspx
Recommendation:
Update this administrative policy to be in-line with any changes to the County Code and other management plans for the use of electronic payments.
Transitional Support –
Recommendations: As outlined in the following section, there are several specific actions which need to be addressed on a County-wide basis, including, but not limited to:
· Dedicated transitional and organizational support for electronic payments
· Flexible operational and technology plans and support for the wide variety of department needs and requirements
· Transitional funding to assist some programs with unanticipated costs associated with electronic payments. This funding is largely intended for two purposes; 1) supplementing general fund department budgets to cover some implementation costs and/or cover the cost of transaction fees, 2) supplement the costs associated with transitioning programs from the existing in-house provided payment engine to a new vendor provided payment platform. This funding would not be intended to purchase and implement entire new POS or online services for departments.
Preliminary Work& Planning
Management and Policy Work – Major Issues
Draft discussion outlines for:
· Transition/Strategic Plan
· Update the Business Plan template
· Collect inventory and customer needs data
Organizational Support
Organization and Communication
· Establish Working team (done)
· Set up a standing users group (in process)
· Establish an organization wide communication plan
Phase I – 2014 (funded)
· Conduct an electronic Payments Summit (done)
· Formation of the working team (done)
· Preliminary inventory (done)
· Submit budget proposal to support an increased in electronic payment options (done)
· RFP for consultant to draft a new Electronic Payments ManagementPlan
· Continue consultations, review and approvals for department/program business plans for implementing electronic payments
· Research and collect information regarding electronic payment industry practices, policies and trends. Research and collect information regarding best business practices in the government sector.
· Meet with various County agency representatives to gain an understanding of their current payment environment and the future needs of the agencies. Document current and planned County agency payment options.
· Develop recommendations for the electronic payments management plan. The analysis should consider, but is not limited to the following questions:
· Should the County continue to move forward with the current County-developed payment engine or move to a vendor-supported payment engine? The analysis should address the costs/benefits of these two options and the associated risks for each option. The County has a strong interest in reducing its administrative burden and risk tied to complying with payment card industry (PCI) standards.
· What are recommended approaches for when to absorb transaction costs and when to pass those costs on to the customer in the form of a convenience fee? The County is interested in developing criteria and an analytical template, such as a decision tree, that County agencies can use to help them decide whether to absorb transaction costs into their fee structure or utilize “convenience” fees for each electronic payment.
· Develop and write the draft electronic payments management plan based on the agreed vision and policy/strategic framework.
· Provide presentations to the project steering committee, project-related forums, and Executive leadership.
Phase II – 2014-15
· Develop business and technical requirements for a RFP for an electronic payment processer and related technologies
· Develop recommend changes or updates to current policies and procedures based on the strategic direction set forth in Phase I.
· Develop and document business and functionality requirements for an electronic payment services RFP. The preliminary requirements document will be circulated for review and approval by the County’s Project Review Board (PRB), KCIT Technical and Business Management Committees and relevant County agencies.
· Establish a County-wide electronic payments workgroup
· Share knowledge and ideas
· Vet County plans and policies
Phase III – 2015-16
Hire an electronic payment coordinator (Temporary, Limited Term)
Continue consultations, review and approvals for department/program business plans for implementing electronic payments
Plan for conversion of several County services which are using the existing payment engine to a new payment processer and payment engine. Implementation work includes:
1. Analyzing and preparing recommendations for each existing electronic payment service
2. Migrating in-house electronic payment services and applications to a vendor supported payment solution and services, provided that there is a final decision by the County to move in this direction.Comment by scott matheson: Shouldn’t this be conditional? The decision to move to a vendor hosted payment engine hasn’t been made.
3. Supporting expansion and updates for current electronic payment services
4. Identifying and developing recommendations for new electronic payment options and services
Electronic PaymentManagementPlan
2014
3111/7/2014
Appendix A: Document References
The following documents have been referenced in this update to the eCommerce Management Plan. A copy of each of these documents is available by contacting the staff or Web sites listed below.
Reference Document
Contact
1
eCommerce Management Plan developed in May 2002.
Nancy Wickmark, ITS
206-296-0845
2
King County’s revised Strategic Technology Plan (2003-2005),
OIRM Web Site
http://kcweb/oirm/Reports.htm
3
eCommerce Production Proposal v1.1
Nancy Wickmark, ITS
206-296-0845
4
eCommerce Web Hosting Recommendation v1.3
Nancy Wickmark, ITS
206-296-0845
5
eCommerce Policies and Procedures
Ken Guy, Finance
206-296-7333
6
Credit Card Ordinance
Ken Guy, Finance
206-296-7333
7
eCommerce Business Guide
Ken Guy, Finance
206-296-7333
8
eCommerce Developers Guide
Nancy Wickmark, ITS
206-296-0845
9
ePet Business Case
Terry Denend, REALS
206-296-1534
10
eTax Business Case
Ken Guy, Finance
206-296-7333
Appendix B: 4A.601ELECTRONIC PAYMENTS
(Copied from King County online codes, 8/5/2014)
Sections:
4A.601.010Policies - convenience and transaction fees.
4A.601.020Credit card, debit card or check card number privacy policy.
4A.601.030Initiating acceptance - council approval for absorbing costs.
4A.601.040Annual reporting.
4A.601.050Chapter not waiver or release - pursuit and recovery of costs.
4A.601.100Electronic payments - animal care and control and pet licensing.
4A.601.120Electronic payments
4A.601.010 Policies - convenience and transaction fees.
A. Requests to accept electronic payments must be initiated by the affected department or agency. A department or agency is not required to accept electronic payments for any service it provides.
B. A department or agency may accept electronic payments for a service it offers, only if the person making the payment bears the transaction fee in such an amount as determined by the finance and business operations division in accordance with state law.
C. A department or agency may absorb the costs associated with electronic payment transactions, only if the council has given its approval to do so and absorption of the transaction fees does not conflict with state law, this chapter or established county policy.
D. A department or agency may accept electronic payments for tax payments, including interest, penalties and other amounts associated with taxes, only if the person making the payment bears the transaction fee in such an amount as determined by the finance and business operations division in accordance with state law.
E. A department or agency may accept electronic payments for specified nontax payments, including but not limited to code enforcement fines and penalties, special assessments, school and road mitigation payments, and fines, restitution and interest imposed by courts, only if the person making the payment bears the transaction fee in such an amount as determined by the finance and business operations division in accordance with state law.
F. If a department or agency collects payments to be shared with another state or government agency, the department or agency may absorb the cost of the transaction fees, only if the benefits to the county are greater than the transaction fees, as determined by the head of the department or agency, and if approved by the council. A department or agency that collects those types of payments may enter into negotiation with other state or governmental agencies regarding the sharing of transaction fees, unless the share of payment collected to be paid to the other agency is specified by state law.
G. The finance and business operations division shall develop and administer a comprehensive countywide request for proposal for credit card services. The finance and business operations division shall award and administer agreements for the services. A department or agency may not enter into such an agreement without the written consent of the manager of the finance and business operations division.
H. Electronic payments may be accepted in person, over the phone, by fax, by mail or through the Internet, as determined appropriate by the head of each department and agency and as is consistent with this chapter and any agreement for electronic payment services.
I. Convenience fees may be added to electronic payments processed through an interactive voice response system or through the Internet. The convenience fee may be calculated to cover any transaction costs borne by the department or agency and may include a fee for expedited transaction processing. A department or agency may not impose a convenience fee unless the manager of the finance and business operations division has approved the fee.
J. A department accepting electronic payments shall include transaction fees in its annual budget unless the customer pays the transaction fees. (Ord. 17292 § 38, 2012: Ord. 14199 § 112, 2001: Ord. 13923 § 4, 2000. Formerly K.C.C. 4.100.020).
4A.601.020 Credit card, debit card or check card number privacy policy.
A. Electronic commerce systems, either Internet or interactive voice response, shall not store credit card, debit card or check card numbers in a data base or create a database where the numbers are retrievable by any county employee or county systems except as specifically authorized under subsection of E. of this section.
B. For credit card, debit card or check card transactions completed at a counter, county staff:
1. Shall not enter credit card, debit card or check card numbers into a database or create a database where the credit card, debit card or check card numbers are retrievable by any county employee or other county systems except as specifically authorized under subsection E. of this section;
2. Shall give the holder's copy of the credit card, debit card or check card receipt to the customer; and
3. Shall store the merchant copy of the credit card, debit card or check card receipt for at least three years in a secure location immediately after the transaction is completed, and the location shall be accessible to authorized personnel only.
C. For mail-order and telephone order credit card, debit card or check card transactions, county staff:
1. Shall not enter credit card, debit card or check card numbers into a database or create a database where the credit card, debit card or check card numbers are retrievable by any county employee or other county systems except as specifically authorized under subsection E. of this section.
2. Shall store the merchant copy of the credit card, debit card or electronic check receipt for at least three years in a secure location immediately after the transaction is completed, and the location shall be accessible to authorized personnel only;
3. Shall either mail the credit card, debit card or check card holder the customer's copy of the credit card, debit card or check card receipt or store it with the merchant copy, in accordance with agency policy.
4. Mail order and telephone order forms containing credit card, debit card or check card numbers must be either destroyed or stored with the merchant copy of the credit card, debit card or check card receipt in accordance with agency policy.
D. An agency must obtain written authorization from the executive and provide written notification to the council chair for the use of systems that collect credit card, debit card or check card numbers in any location where credit card, debit card or check card numbers are retrievable by any county employee or other county systems. (Ord. 17292 § 40, 2012: Ord. 14545 § 3, 2002. Formerly K.C.C. 4.100.025).
4A.601.030 Initiating acceptance - council approval for absorbing costs.
A. A department or agency may initiate the acceptance of electronic payments without council approval, only if the person making the payment bears the transaction fee in such an amount as determined by the finance and business operations division in accordance with state law.
B. A department or agency wishing to absorb the costs associated with electronic payment transactions shall receive council approval to do so. The process for receiving council approval is as follows:
1. The department or agency must submit to the budget office and to the finance and business operations division a formal request to initiate acceptance of electronic payments along with a business analysis that, at a minimum, describes any combination of the service or services and product or products for which the electronic payment option is to be offered, assesses the benefits of absorbing the transaction costs associated with these payments, projects the annual fiscal impact of absorbing transaction costs over a three-year horizon, documents legal or contractual obligations that would be affected by acceptance of electronic payments and adequately cites or includes as attachments any documentation supporting its business analysis. The council encourages the executive to develop an electronic payment business analysis template for use by interested agencies; and
2. If the budget office agrees that absorbing the transaction costs serves the best interests of the county, and if the finance and business operations division confirms that the proposal meets its electronic payment processing protocol, the executive may transmit an appropriation request to the council. The transmittal package must include the department or agency business analysis on which the original request is based. The council encourages submittal of the electronic payment appropriation requests as part of the annual budget. (Ord. 17292 § 42, 2012: Ord. 14199 § 113, 2001: Ord. 13923 § 5, 2000. Formerly K.C.C. 4.100.030).
4A.601.040 Annual reporting. Each year as part of the annual budget transmittal, the executive shall provide the council with a list of those agencies offering electronic payment options. This list must include, for each agency, the budgeted appropriation for absorbing electronic payment transaction costs for the previous budget year, the actual electronic payment transaction costs for the previous year, the budgeted funding for the costs in the present budget year and the proposed funding for the upcoming budget year. (Ord. 13923 § 6, 2000. Formerly K.C.C. 4.100.040).
4A.601.050 Chapter not waiver or release – pursuit and recovery of costs. This chapter is not a waiver or release of any fee, fine, penalty, assessment or other amount that the county may make or impose for an inadequate or insufficient electronic payment to the county. The county reserves and shall exercise all rights under law to pursue and recover all costs from persons making, presenting or using inadequate or insufficient electronic payment methods. (Ord. 13923 § 7, 2000. Formerly K.C.C. 4.100.050).
4A.601.100 Electronic payments - animal care and control and pet licensing. The records and licensing services division is authorized to accept electronic payments for animal care and control and pet licensing purposes, including for all fees and penalties in K.C.C. 11.04.035. The records and licensing services division is authorized to absorb theoperational and business costs of accepting theseelectronic payments, including bank and processing fees charged by electronic payment vendors, subject to appropriation authority being provided by the county council. (Ord. 16861 § 6, 2010.Formerly K.C.C. 4.100.100).
4A.601.120 Electronic payments. The district court is authorized to accept electronic payments of fees, fines, costs and other charges at any district court location. The district court is authorized to absorb the operational and business costs of accepting these electronic payments, including bank and processing fees charged by electronic payment vendors, subject to appropriation authority being provided by the county council. (Ord. 17230 § 1, 2011. Formerly K.C.C. 4.100.120).
Appendix C: Planning Options; Payment Channels
Counter and in-person services
Walk-in
Dropbox
Cash
Yes
Not Advisable
Yes
Paper Check
Yes
Yes
Yes
Credit Card (no fee)
Yes
Not Advisable
Not Advisable
Debit Card (no fee)
Yes
Not Advisable
Not Advisable
eCheck[footnoteRef:5] (no fee) [5: Cash conversion processing]
Yes
Yes
Yes
ACH
Not Possible
Not Possible
Not Possible
Credit Card (fee)
Yes
Not Advisable
Not Advisable
Debit Card (fee)
Yes
Not Advisable
Not Advisable
IVR and Mobile
IVR Phone
Mobile
Cash
Not Possible
Not Advisable
Paper Check
Not Possible
Not Advisable
Credit Card (no fee)
Yes
Yes
Debit Card (no fee)
Not Possible
Not Possible
eCheck[footnoteRef:6] (no fee) [6: Cash conversion processing]
Not Possible
Not Possible
ACH
Not Possible
Not Possible
Credit Card (fee)
Yes
Yes
Debit Card (fee)
Not Possible
Not Possible
Online and Kiosk
Online
Kiosk
Cash
Not Possible
Yes
Paper Check
Not Possible
Yes[footnoteRef:7] [7: Cash conversion processing (eCheck)]
Credit Card (no fee)
Yes
Yes
Debit Card (no fee)
Not Possible
Yes
eCheck[footnoteRef:8] (no fee) [8: Cash conversion processing]
Yes
Yes
ACH
Yes
Not Possible
Credit Card (fee)
Yes
Yes
Debit Card (fee)
Not Possible
Yes
Appendix D: Regional Electronic Payment Policies
Appendix E: County Electronic Payment Inventory
Percentage
ePaymentCash/Check0.20.8
US Mail
Service Counter
Phone
Kiosk
Online
Cash/Check Transport &
Handling
County Bank Accounts
Credit Card Processor