Updated: May 23, 2005
6.4 CREDIT CARD
COLLECTIONS
A. Introduction
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.
B. Centralized Credit Card
Processing within TXShop
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.
TXShop
C. Terminology for
Department-Controlled Credit Card
Processing
Authorization
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.
Chargeback
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
Canceling a credit card transaction that has
been authorized
and settled.
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.
Gross Sales
The total dollar amount of all sales with
nothing subtracted.
Merchant Setup
Fee
A one-time fee charged by Internet Commerce
Providers to enable a new merchant to collect
credit cards. Each new credit card account is
considered to be a merchant.
Privacy
Policy
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.
Sales Tax
For more information on charging sales tax for
goods and services, see the Sales Tax
publication available on the Office or
Accounting web site or contact Financial
Reports at 471-1265.
Sales
Tax*
Settlement
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.
Void
Canceling a credit card transaction that has
been authorized,
but not settled. See
also Credit.
D. Departmental Responsibilities
for Department-Controlled Credit Card
Processing
1. Security
a. Physical
Security
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).
b. Electronic
Security
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
departments use Global Payments Global
Retail Advantage software, or similar
software, and confidential credit card
information is stored on a local hard
drive, the computer must be locked
down. Hard drives must be wiped clean
before disposal. See also page 2 of the
Global Retail Advantage Credit Card
Packet for more information on
electronic security.
Global
Retail Advantage
Software Credit
Card Packet*
2. Records Retention
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,
Credit Card Slip Copies. Departmental
procedures regarding shredding of documents
must be developed and followed. See
the Records Management web page regarding
disposal of confidential records for more
information. Non-transitory
information requires approval before
destruction. See the Disposal of Records
web page for more information.
University
of Texas Records
Management
3. Processing of
Transactions
Departments must use a credit card
processing system that is certified by UT
Austin's credit card processor (currently
Global Payments).
4. Costs
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.
5. Settlement
Departments must settle batches daily
with a printed settlement report which
lists total collected for each card
type.
6. Vouchering
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.
7.
Reconciliation
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.
E. Process Overview of
Department-Controlled Credit Card
Processing
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.
1. Online (Web) Credit Card
Collections
a. Policies and
Technical Issues for Accepting
Online Credit Card Payments
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
Office
of Accounting Web
Credit Card
Packet*
b. Technical Means of
Accepting Online Credit Card
Payments
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
txshop-info@utlists.utexas.edu for help
with questions about online
store development and payment
processing.
c.
Self-Assessment
Before your online store can accept
payments, a technical contact for the
store must have a design walkthru 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.
Office
of Accounting Web
Credit Card
Packet*
d. Costs Associated
with Opening Your Online
Business
Complete the Web Credit Card Cost
Worksheet and print out your results.
After you've determined how much
business you expect to do in a month,
this form will help you calculate how
much your department will have to pay
for online payment processing. After
you fill out the form, print it. You
will submit it as backup material for
your request for a merchant account.
This form requires that you have
JavaScript turned on in your browser.
If you do not wish to turn on
JavaScript, you may print out the form
and do the calculations yourself.
Web
Credit Card Cost
Worksheet
e. Requesting a
Merchant Account
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
oa.cmcc@austin.utexas.edu.
Office
of Accounting Web
Credit Card
Packet*
Web
Credit Card Cost
Worksheet
f. Developing Your
Online Store
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 walkthru 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 walkthru,
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 walkthru before
your store may go "live."
Office
of Accounting Web
Credit Card
Packet*
Office
of Internal
Audits
g. Opening Your Online
Store
After you have completed the Office
of Internal Audits design walkthru 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 232-2100, or
e-mail
oa.cmcc@austin.utexas.edu.
Questions about general credit card
information can also be addressed to
Cash Management Services at the same
phone number.
Cash
Management
Services
2. Point of Sale (POS)
Terminal Credit Card Collections
a. General
Information
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.
Point
of Sale Credit
Card Packet*
b. Requirements
The department must purchase an
all-in-one terminal and printer. The
terminal requires a power source and a
dedicated phone line.
c. Establishing a
Merchant Number
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).
3. Batch Processing by PC
(Global Retail Advantage Software)
Credit Card Collections
a. General
Information
PC batch processing of credit card
collections is for departments that
process many transactions at once
without the card being present.
Transactions are processed by batch on
a PC, and individual receipts are not
printed. The Global Retail Advantage
Software Credit Card Packet contains
prices, additional information, and
Merchant Number request form.
Global
Retail Advantage
Software Credit
Card Packet*
b. Requirements
This method involves a one-time
purchase of Global Retail Advantage PC
software. This software requires a PC
with a modem. Cards will not be swiped,
and all transactions will be classified
at the Emerging Market discount
rate.
c. Establishing a
Merchant Number
In order to establish a merchant
account, departments must complete a
Request for Credit Card Merchant Number
form, included in the Global Retail
Advantage Software Credit Card Packet,
and send it to the Office of
Accounting—Cash Management
(campus mail code K5300).
* NOTE: PDFs are best viewed with Adobe
Acrobat Reader 6.0 or later. Earlier
versions may result in incomplete rendering
of information. A free update of Adobe
Acrobat Reader may be obtained from
Adobe.
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