Handbook of Business Procedures
Note: Changes to this policy are pending to include Payment Card Industry Data Security Standards (PCI DSS). Please contact Cash Management Services at email@example.com before committing to any credit card processing services. For more information, see the Minimum Security Standards for Merchant Payment Card Processing.
May 23, 2005
March 8, 2013
6.4. CREDIT CARD COLLECTIONS
This policy addresses the means by which departments may accept credit card payments from customers. UT Austin offers a centralized means of selling merchandise and accepting credit card payments via TXShop. Other options are available for departments to manage their own sales and credit card collections.
If a department decides to manage its own credit card collections, the department is responsible for physical and electronic security of credit card information, costs associated with credit card transactions, and following established accounting procedures. Authorization is required from the Office of Accounting before any department-controlled method of credit card collection may be set up.
TXShop is the online shopping cart application for the University of Texas at Austin. It functions as an online shopping mall where University departments open stores to sell products and services. Credit card payments go directly through the University's Centralized Receivables accounting function, and the department is not required to establish a separate merchant number or create daily VC1s. For information about setting up a TXShop store, visit the TXShop web site.
A request from a merchant to charge a credit card. The credit card is not actually charged until the authorization is settled.
Bank Credit Charges
Each settlement (closeout) of a credit card batch creates a credit transaction to the bank. Since batches must be settled daily, there will be a bank credit charge for any day a credit card payment is received and processed.
Bank Debit Charges
Monthly charges for credit card discount fees and chargebacks create debit transactions to the bank. Each month, each credit card company causes the money owed to them in discount fees (and/or chargebacks) to be transferred from your account to theirs. This is a debit against your account, and the bank charges a small fee per debit. For example, if you accept all three credit card types, you will be charged a debit fee by your bank for each card type.
A customer-initiated procedure to contest a charge. Merchants are generally given less than 10 days to produce evidence that the charge against the customer's credit card was valid. If this evidence cannot be provided, the funds are taken from the merchant and credited to the customer. Chargebacks are very difficult to refute for purchases made over the web, because the card holder's signature is never obtained.
Credit Card Discount Rate
A percentage of gross sales collected by the credit card processor from the merchant each time the merchant accepts payment via credit card. Discount rates vary by credit card company (MasterCard/Visa, American Express, and Discover/Novus) and by classification of merchant. UT Austin departments that do not physically have the credit card to swipe through a point-of-sale terminal are classified as "Emerging Market."
GPI (Global Payments Inc.)
Global Payments Inc. handles all credit card processing for UT Austin. This processing includes handling requests for authorization and settlement. The Internet Commerce Provider associated with an online store must be able to communicate (be certified) with Global Payments. Any software provider for non-Internet processing must also be certified with Global Payments.
A statement published on a web site that explains what is done with the information provided by the customer. This statement should notify the customer if the information provided is being made available for use beyond the service being sold.
A procedure in which a merchant requests that some or all authorized transactions be processed by a credit card processor. This processing includes charging the customer's credit card and transferring the money owed to the merchant.
Departments are to keep all copies of credit card information confidential and protected from misuse. Current records are to be locked in file cabinets. Only authorized personnel should have access to keys to file cabinets containing credit card information. Discarded daily detail of credit card information is to be shredded. Outdated records are to be marked "For confidential disposal – shred" and should be retained and destroyed in accordance with the official University Records Retention Schedule (see section D2 of this Part for more information).
Credit card information stored on local hard drives must be properly secured and properly disposed of in accordance with the official University Records Retention Schedule (see section D2 of this Part for more information). If a department stores confidential credit card information on a local hard drive, the department must contact the Information Security Office (ISO) to ensure the information is stored in compliance with Payment Card Industry Data Security Standards (PCIDSS). Hard drives must be wiped clean before disposal.
Both paper and electronic records are to be stored securely for the current fiscal year plus three years in accordance with the official University Records Retention Schedule records series AALL454 Detail-Credit Card Transaction. For more information, refer to the Handbook of Business Procedures:
Departments must use a credit card processing system that is certified by UT Austin's credit card processor (currently Global Payments).
Departments are responsible for all costs associated with credit card processing, including but not limited to setup fees, monthly maintenance fees, bank fees, discount rate fees, and per transaction fees.
Departments are responsible for their own voids, returns, chargebacks, and all the costs associated with such transactions.
Departments must settle batches daily with a printed settlement report which lists total collected for each card type.
Departments must create a VC1 for each day’s business and deliver it to the Bursar's Office for approval by the end of the next business day. More than one day’s business cannot be combined into one VC1.
Each credit card company will send a statement of activity, which departments are required to reconcile with deposit records and forward to the Office of Accounting—Cash Management (campus mail code K5300) by the 20th of each month.
Department-controlled credit card collection may be conducted via three methods: web-based, point of sale (POS) terminal, and Global Retail Advantage Software. Each method has different one-time set up costs, differing costs per transaction, and different discount rates. Generally, the volume of transactions and whether the customer is present with the credit card will be a key factor in deciding the appropriate method for collection of credit card income. All methods require authorization from the Office of Accounting prior to set-up.
In order to set up any method of credit card collections, departments must obtain a merchant number by filling out a request form, included in the credit card packets as described below. UT Austin's credit card processor, Global Payments, Inc., may take up to four weeks to establish a merchant account.
Download and read the Office of Accounting Web Credit Card Packet. This PDF packet contains:
- Guidelines for departments accepting online payments
- A summary of costs associated with accepting credit card payments via the web
- A memo template to be used to request a merchant account (required to accept online payments)
- Office of Internal Audits Self-Assessment Checklist
Each department is responsible for the creation of their own online store (the department can develop the store or contract with a software company to develop the online store). There are a variety of methods for starting up your store. Read about them, research potential solutions, and select the one that works best for your department. Contact the TXShop team at firstname.lastname@example.org for help with questions about online store development and payment processing.
Before your online store can accept payments, a technical contact for the store must have a design walk-through with an auditor from the Office of Internal Audits. Looking over the checklist prior to the development of your online store enables you to be informed about Internal Audits requirements for system security and data integrity. If you have contracted the development of your store out to another company, be sure to give them a copy of the checklist. The checklist is located in the Office of Accounting Web Credit Card Packet.
Complete and send the Request for a Merchant Account memo.
A template for this memo is located in the Office of Accounting Web Credit Card Packet. Instructions for filling out the memo and sending it are included in the memo. Send the printout of your Web Credit Card Cost Worksheet along with your request for a merchant account. If your request is approved by Office of Accounting, your merchant account will be requested to UT Austin's credit card processor (Global Payments, Inc.). The request can take as long as 3-4 weeks to be returned by Global Payments. Please direct questions concerning merchant accounts to Cash Management Services at email@example.com.
Work with the programmers hired to develop your online store. Be sure to keep them informed about the Office of Accounting Web Credit Card Policy and the Office of Internal Audits Checklist.
Schedule a design walk-through with an auditor from Office of Internal Audits. This meeting may be scheduled by calling the Office of Internal Audits at 471-7117. A technical contact (programmer or analyst) and a department contact should meet with the auditor. To schedule the walk-through, follow the directions in the Internal Audits Checklist that is part of the Office of Accounting Web Credit Card Packet. Be familiar with all the information needed to address the issues raised in the Internal Audits Checklist. You will be required to comply with all recommendations made by the auditor during the walk-through before your store may go "live."
After you have completed the Office of Internal Audits design walk-through of your store, Internal Audits will notify the Office of Accounting. The Office of Accounting will then notify you of your merchant account number. Give your merchant account number to your web credit card vendor, and then you can begin accepting online credit card payments.
Follow the Office of Accounting's procedures for settlement, vouchering, and reconciliation. Learn about how to follow daily and monthly procedures regarding accepting payments. Following these procedures will ensure that your department's revenue is properly deposited in your departmental account. To learn about these procedures, contact the Office of Accounting Cash Management Services at 232-5733, or e-mail firstname.lastname@example.org. Questions about general credit card information can also be addressed to Cash Management Services at the same phone number.
Credit card collection using a Point of Sale (POS) terminal is for departments where the customer is present for the card to be swiped, or for departments that do not process a large volume of transactions. A card can be swiped on a terminal if the customer is present, or the credit card number can be hand-keyed into the terminal. The discount rate classification is dependent on whether the majority of cards are swiped or keyed into the terminal. Individual receipts are printed. The Point of Sale Credit Card Packet contains prices, additional information, and Merchant Number request form.
The department must purchase an all-in-one terminal and printer. The terminal requires a power source and a dedicated phone line.
In order to establish a merchant account, departments must complete a Request for Credit Card Merchant Number form, included in the Point of Sale Credit Card Packet, and send it to the Office of Accounting—Cash Management (campus mail code K5300).
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