New visa opportunity for cost-neutral tuition acceptance

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In January 2014, Visa expanded and changed the name of their Government and Education Payment Program. The latest changes create new opportunities for K-12 schools to use cost-neutral options for accepting credit and debit cards.

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New visa opportunity for cost-neutral tuition acceptance

  1. 1. New VISA Opportunity for Cost-Neutral Tuition Acceptance Copyright © Diamond Mind 2014 All Rights Reserved. No part of this document may be reproduced or distributed without Diamond Mind’s express consent. The settlement rules are subject to change. This was last updated February 28, 2014.
  2. 2.  Current cost-neutral options for accepting tuition payments by credit card  What’s new for 2014—an in-depth look at the new rules and how they impact schools  Tools and resources to decide which approach works best for your school
  3. 3. Check-Out / Surcharge Fee Program Discount for Cash Program Convenience / Service Fee Program * Check with legal counsel if you are in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas
  4. 4.  Percentage fee on all credit cards  No % may be charged on debit  No restrictions on type of payment  3rd party cannot collect for schools  Must be done in one single transaction  The % fee is capped at 4%  30 day notification of intent to surcharge
  5. 5.  Explicitly permitted in Merchant Service Agreement  Proper labeling is essential  Allowed in all 50 states* * Check with legal counsel if you are in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas http://usa.visa.com/personal/get-help/checkout-fees.jsp
  6. 6. Full Amount Discounted Amount $20,550 $20,000 Wonderful Day School * 2.75% Effective Rate
  7. 7.  MasterCard, Discover and American Express  Charge % on both credit cards AND debit cards  No VISA  Tuition, board and related fees  3rd party can collect for schools  Schools only* * Applicable to Government, Utilities and Higher Education
  8. 8.  Effective January 15, 2014  Schools can now either choose to collect the fees themselves, or they can have a 3rd party collect the fee for them  Fee is applicable to credit AND debit cards for tuition, board and related services  45 day notice given to VISA  Payment and fee must occur as two separate transactions using two separate merchant accounts  Must be clearly labeled: ―School Name*Service Fee‖ - School Name Formatted to 3, 7 or 12 characters
  9. 9. • Several schools in the 10 states* previously mentioned have used DFC because their legal advisors have determined that it is the best option available for cost-neutral tuition acceptance. Discount for Cash • Many schools used SF for cost-neutral tuition acceptance because they wanted to accept all types of credit cards – including VISA. In the past, VISA did not allow percentage-based convenience fees; SFs enabled schools to accept ALL credit cards in a cost-neutral way. Surcharge Fees • Many schools choose this option because they want to simplify their reconciliation process by outsourcing fee collection. This option can only be used with MC, Discover and AMEX. Convenience Fees • We anticipate schools will choose this option because they want to simplify their reconciliation process by outsourcing fee collection. This option can now be used with all credit card types -- MC, Discover, AMEX and VISA. Service Fees * California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas
  10. 10. If You Want to: Service Fee (formerly convenience fee) Surcharge Discount for Cash Make credit card acceptance cost- neutral    Accept all credit card brands  (New as of 1/15/14)   Apply fee to all types of purchases, beyond tuition and board (Not recommended for donations) Limited to tuition, board and related fees   Accept debit and prepaid cards  No  Have a third party collect the fee  No No Know the requirements to implement • Limited to tuition, board and related fees • 45 day notice to VISA & MC • 30 day notice to VISA & MC • 4% max charge • Single transaction Properly label invoices and published pricing Operate in one of the 10 states* Check with your legal counsel Check with your legal counsel Check with your legal counsel * California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas
  11. 11. Access this valuable tool at www.diamondmindinc.com
  12. 12.  New VISA Opportunity for Tuition: http://www.diamondmindinc.com/new-visa-opportunity-for-tuition/  Fee Assessment Worksheet: http://info.diamondmindinc.com/fee-assessment  Send an email to info@diamondmindinc.com  Give us a call: (888) 566-0945 Available Online Questions?

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