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The City of Portland, Oregon

Office of Management & Finance

Bureau of Revenue and Financial Services

Phone: 503-823-5288

Fax: 503-823-5384

1120 SW 5th Avenue, Rm 1040, Portland, OR 97204

FIN 2.10.01 Guidelines for Electronic Payment Processing Services

CFMP Procedure

Prior to requesting approval from the Treasury Division for electronic payment processing, bureaus shall consider the financial and operational impacts of providing electronic payment processing. This procedure identifies the factors and considerations that are commonly included in a thorough cost/benefit analysis. The elements are offered as guidelines, not requirements. A bureau’s analysis does not have to include every one of the factors noted below. The Treasury Division, the Accounting Division, and the Bureau of Technology Services are available to bureaus for consultation on these analyses. 

Financial impacts:

  • Payment card transaction fees.  Some fees are a flat rate per transaction, while others are a percentage of the transaction dollar amount.
    • Interchange fees are set by the card associations (e.g. VISA or MasterCard) and are paid to the banks that issue the cards.  Factors that influence interchange fees are the card type the consumer is using (P-card, corporate card, etc.), the MCC code of the merchant/industry (gas station, retail, government, etc.), and the transaction environment (in-person, online, etc.).  Interchange fees represent approximately 95% of the payment card transactions fees.
    • Network authorization fees are set by and are paid to the card associations.
    • Processing fees are established contractually with and are paid to the City’s competitively selected merchant processor bank.
  • Gateway fees.  Per transaction fees paid to the City’s contracted payment gateway provider.
  • Equipment rental or acquisition
    • Card payment devices
    • Dedicated phone line or wireless fee (depending on device connectivity)
    • Point-to-point encryption fees
  • Existing system upgrades, if necessary
  • Web site development costs for online payments (BTS E-Commerce-Payment Gateway charge)
  • Personnel training for Payment Card Industry (PCI) security, transaction processing, system usage and chargeback processing 

Operational impacts:

  • Transaction processing and chargeback processing and account reconciliation
  • Equipment training
  • Procedural controls and security measures
  • Staffing and organizational structure

Other considerations:

  • Customer service
  • Collection rates
  • Efficiency in bureau operations

Alternatives analysis:

The cost/benefit analysis should also include an assessment of payment card alternatives such as automated clearinghouse (ACH) payment and check scanning/conversion.

Related Policy

FIN 2.10 Electronic Payment Processing Services

Authority In accordance with FIN 2.02 Comprehensive Financial Management Policies Overview, the City Treasurer is authorized to develop and implement procedures in support of the CFMP. 


Adopted by the City Council, August 6, 2014

Amended by City Treasurer, July 8, 2016