Electronic Payments for Driver's Licensing Transactions,December 31, 2008

(2008) Electronic Payments for Driver's Licensing Transactions,December 31, 2008. Transportation, Department of

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Abstract

House File 2196 required the Department of Transportation (DOT) to study the acceptance of electronic payments at its customer service sites and sites operated by county treasurers. Specifically the legislation requires the following: “The department of transportation shall review the current methods the department employs for the collection of fees and other revenues at sites operated by county treasurers under chapter 321M and at customer service sites operated by the department. In conducting its review, the department, in cooperation with the treasurer of state, shall consider providing an electronic payment option for all of its customers. The department shall report its findings and recommendations by December 31, 2008, to the senate and house standing committees on transportation regarding the advantages and disadvantages of implementing one or more electronic payment systems.” This review focused on estimating the costs of providing an electronic payment option for customers of the DOT driver’s license stations and those of the 81 county treasurers. Customers at these sites engage in three primary financial transactions for which acceptance of electronic payments was studied: paying for a driver’s license (DL), paying for a non-operator identification card (ID), and paying certain civil penalties. Both consumer credit cards and PIN-based debit cards were reviewed as electronic payment options. It was assumed that most transactions would be made using a consumer credit card. Credit card companies charge a fee for each transaction for which they are used. The amount of these fees varies among credit card companies. The estimates for credit card fees used in this study were based on the State Treasurer of Iowa’s current credit card contract, which is due to expire in September 2009. Since credit card companies adjust their fees each year, estimates were based on the 2008 fee schedule. There is also a fee for the use of PIN-based debit cards. The estimates for PIN-based debit card transactions were based on information provided by Wells Fargo Merchant Services for current fees charged by debit card networks. Credit and debit card transactions would be processed through vendor-provided hardware and software. The costs would be determined through the competitive bidding process since several vendors provide this function; therefore, these costs are not reflected in this document.