THE PURCHASING DIVISION AND THE FINANCE AND ADMINISTRATIVE SERVICES DEPARTMENT/RECORDS, TAXES, AND TREASURY DIVISION RECOMMEND APPROVAL OF THE ABOVE MOTION.
The purpose of this Participation Agreement is to provide County agencies the ability to accept American Express Cards in their payment operations, where applicable.
The Purchasing Division seeks to piggyback off of the State of Florida Contract No. D0988 for American Express Card acceptance across County agencies. The State of Florida contract allows state and local government entities, via a Participation Agreement, to accept the American Express Card for payments under the terms of the Master Agreement.
Section 215.322, Florida Statutes, allows the State of Florida’s Chief Financial Officer to establish contracts with one or more financial institutions, credit card companies, or other entities for the acceptance of credit cards, charge cards, debit cards or electronic funds transfers in payment of goods and services. These contracts authorize a unit of local government to use the services upon the same terms and conditions as afforded the State of Florida.
The first Master Services Agreement between the State of Florida and American Express Travel Related Services, Inc. was established on December 31, 1998. Subsequent to the establishment of this Master Services Agreement, the County has had a Participation Agreement in place with American Express Travel Related Services Company, Inc. since December 15, 2000, and the County first accepted American Express Cards for payment on January 8, 2001.
The Participation Agreement allows the County to utilize the State of Florida's current agreement, number D0988. This agreement is in effect until September 10, 2020 and provides services associated with the authorization and settlement of American Express cards and guarantees the lowest governmental interchange rate offered by consolidating all participating merchants’ transactions.
The result is that the County benefits from pre-negotiated contract terms and reduced pricing afforded by the scale of the State of Florida Agreement. The State of Florida negotiated discount rates are favorable at the American Express discount rate of 2.15% and the prepaid card rate of 1.15%. As a comparison, typical merchant discount rates vary from 2.3% to 3.5%, depending upon the merchant category code or business type. These discounted rates are only available via the State of Florida Agreement and thus would be higher if negotiated separately. In addition, American Express Travel Related Services Company, Inc. is the only source from which to procure these services.
In the most recent year County agencies accepted over 33,500 transactions paid by American Express Card, totaling over $13 million. Merchant service fees paid to American Express Travel Related Services Company, Inc. total approximately $300,000 per year. |