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SPCC Charge Card Fee Guidance

NEW UMW FINANCE POLICY: Effective May 16, 2024:

The University of Mary Washington will require the use of the SPCC if the supplier accepts charge cards as a payment method, unless any surcharge/convenience fee imposed by the supplier totals $450 or more. This means that buyers/departments will no longer have the option to pay by check to avoid charge card fees if the value of the fees equals less than $450. In other words, if your purchase is under $15,000 and the vendor accepts charge cards as a payment method and they charge a 3% charge card fee, you must pay by card. The supplier must still follow all the requirements as stated in the Charge Card Fee Requirements section below.

The Local Card Program will also follow this new policy beginning on May 16, 2024.

It is the responsibility of the Cardholder to understand and/or verify the payment methods accepted by the suppliers they use. Use the How to Verify Supplier Accepted Payment Methods section below for guidance.

Why is the University doing this? Using the SPCC streamlines the payment process to suppliers. It also eliminates the need for vendor setup in Banner, doesn’t require UMW to obtain a COVA W9 from the supplier or a Cardinal Vendor ID from DOA’s Commonwealth Vendor Group, doesn’t require UMW to perform IRS TIN matching, doesn’t require a paper check, MICR printers, MICR ink, printer maintenance,  or postage, doesn’t require UMW to issue a 1099, will eliminate lost checks and avoid Accounting’s unclaimed property/due diligence process, and will generate a rebate which is transferred to UMW through appropriation. All of this also saves time and resources for Accounts Payable and other Finance departments who handle the vendor setup and check issuance processes.

Please read through the Mandatory Card Use FAQ below.

If you have any questions regarding this new policy, please contact Julie Smith.

***TIP: It is a good idea to build in buffers in your budget to allow for additional unknown fees for purchases such as shipping costs and charge card fees.

Effective April 15, 2023:

The Commonwealth Accounting Policies and Procedures (CAPP) Manual, which UMW’s SPCC Program must adhere to, changed the maximum allowable charge card fee percentage able to be charged by a supplier from 4% to 3%. The following provides guidance to Cardholders regarding how to handle charge card fees imposed by suppliers.

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How to Verify Supplier Accepted Payment Methods

Prior to making a purchase, it is the responsibility of each Cardholder to understand the payment methods accepted and ordering procedures of the suppliers they use. One way to verify accepted payment methods is to review the supplier’s eVA profile:

  1. Using the Suppliers –> Browse Suppliers tab on the eVA dashboard, search for the supplier needed*. Once selected, click on the “Company Information” option on the left menu:
    *Make sure the correct supplier is selected, especially if there are multiple entries. If you need assistance verifying if the supplier selected is correct, please contact TESS or Procurement Services.
  2. From here, scroll through the information until the “Accept Charge Cards” field. If the information says “Accepts VISA“, the supplier should accept the charge card.
  • If there is any question as to whether the supplier actually does accept charge cards, the Cardholder should contact the supplier to determine payment methods accepted and confirm the following:
    • if charge cards are accepted and, if so, are there any payment thresholds (i.e. they only accept charge cards up to $5,000)
    • if there are any imposed fees for using the charge card and, if so, what they are.

Tip: If this is the first time the Cardholder is working with this particular supplier, it would also be helpful at this point to determine how they wish to accept orders from the University (i.e. via eVA directly, a print out of the purchase order and emailed to them, via their online website, over the phone, etc.)

  • If the supplier’s eVA profile states they accept VISA charge cards, but discussion with the supplier confirms otherwise, the Cardholder should inform the supplier the need to change their eVA profile information to reflect accurate payment methods. Any assistance needed for supplier profile management should be directed to eVA Customer Care via the Supplier Assistance Request Form. The Cardholder must notate on their eVA order (if an eVA order is required) that the supplier does not actually accept charge card payments.

 

Charge Card Fee Requirements

The supplier must follow all the steps below in order to impose charge card fees:

  • Supplier MUST disclose the amount of the surcharge using signs at the register or posted in location on Point of Sale (POS) system.
  • Supplier MUST disclose the amount of the surcharge prior to online check-out.*
  • Supplier MUST disclose the surcharge as a separate line item on the invoice or receipt.*
  • Supplier MUST disclose the amount of the surcharge which can’t exceed more than 3%. If the fee is higher than 3%, continue reading the sections below for guidance.
  • Supplier MUST process the surcharge and cost of goods/services as ONE transaction, not separately.

*IF a quote or invoice received from the supplier does NOT indicate a fee for using a charge card, they may not apply one at the time of payment. The Cardholder should inform the supplier that they will not pay the card fee as it was not disclosed prior to the purchase.

If assistance is needed with this situation, please contact your Program Administrators.

 

Charge Card Fees Imposed by Suppliers NOT ON Existing Contracts

If discussion with the supplier determines there’s an imposed credit card fee, or if the supplier’s quote/invoice indicates a fee will be charged for use of the credit card, and that fee is above the new maximum allowable 3%, follow these steps:

  1. Inform the supplier that as of April 15, the Commonwealth of Virginia lowered its allowable maximum credit card fee cap from 4% to 3% and request that the supplier lower its surcharge to this new maximum of 3%.
  2. If the supplier says “no” to lowering their imposed fee to 3%, proceed with the purchase at this time, if necessary, but inform the supplier that it may result in the University needing to seek alternative sources for the good/service being purchased in the future. Cardholders must contact the Program Administrators of any supplier who charges over a 3% surcharge. Suppliers that will not lower their surcharge fees may be reported to DOA by the SPCC Program Administrator.

 

Charge Card Fees Imposed by Suppliers ON Existing Contracts

If the Cardholder is purchasing from a supplier on an existing contract awarded prior to April 15 where a quote/invoice indicates an imposed credit card fee above 3%, the Cardholder may proceed with the purchase.  If the Cardholder is unsure if the imposed fee is allowable, contact the Procurement Services Contract Officer for that contract.

 

CAPP Manual Topic 20355: Surcharge Fees

If the supplier requires proof of the change in policy and/or the requirements regarding the ability to surcharge, feel free to send them this page directly from the CAPP Manual:

 

Mandatory Card Use FAQ

Q: The vendor charges a 3% card fee and my purchase total is $7,500. This means we’ll have $225 in card fees on top of our purchase amount. Do I have to pay via SPCC or can I pay by check?
A: $225 is less than the $450 required in the policy, so you must pay by SPCC.

Q: What if my department does not have the available funding to pay the extra costs for the fees?
A: Contact Julie Smith to discuss.

Q: If the value of the fees increases the total purchase amount over my single transaction limit on my card, what do I do?
A: Contact your SPCC Program Admins to request an increase to your single transaction limit. STLs can only be raised up to $10,000. Anything over that amount you will need to talk to Leigh Penn to use her Gold Card for payment.

Q: The vendor’s profile in eVA states they accept charge cards BUT I talked to the vendor and they don’t actually accept charge cards anymore as a method of payment, what do I do?
A: Select “Payment via Check” in Header Field 1 on your purchase order and explain in the comments of the purchase order that you verified with the vendor that they do NOT accept charge cards as payment. It is a good practice to inform the vendor that they should edit their eVA vendor profile to accurately reflect their payment methods accepted.

Q: The vendor’s profile in eVA states they accept charge card BUT I talked to the vendor and they only accept charge card payments up to $2,000 as a matter of company policy. My purchase is $3,500. What do I do?
A: Select “Payment via Check” in Header Field 1 on your purchase order and explain in the comments of the purchase order that you verified with the vendor that they only accept charge card payments up to $2,000.

Q: I have issued a PCO blanket purchase order in eVA (an order with an estimated total amount that you pay down from). One invoice comes in and is under the SPCC threshold for mandatory use so I pay that down under the PCO I issued. Another invoice comes in over the threshold requiring me to pay with my card and I can request a check for this payment. But my eVA order is a PCO. What do I do?
A: A Purchase order has only one payment method for the life of the order.  If the payment method must be changed, a new order must be entered.  If the Supplier or Contractor, for instance, no longer accepts card payment, close out the original order to total of payments made and enter a new purchase order with the new payment method and amount.  Cross-reference the new and old purchase order numbers in the External Comment field for both UMW and the Supplier’s benefit, including the reason for the change in payment method. For you specific circumstances regarding change of payment method, please contact your Program Administrator for guidance.

Q: What if a supplier is not on an existing contract and charges a 3.5% fee and my purchase total is $1,500?
A: Follow the guidance in the section Charge Card Fees Imposed by Suppliers NOT ON Existing Contracts. If the supplier does not agree to lower their fee to the maximum 3%, you must pay via SPCC and pay the additional $52.50 (3.5% of $1500) in charge card fees, but inform the supplier that they may be reported to DOA by the Program Administrator for not following the state’s guidelines. If the supplier agrees to lower their fee to the maximum 3%, then you must pay via SPCC and pay the additional $45 (3% of $1500) in fees.

Q: If the supplier accepts charge cards, ACH, and check, but they tell me (the cardholder) that they prefer ACH or check, what do I do?
A: The University will not issue a check over a charge card payment based on vendor preference. If they offer charge cards as a method of payment, we will pay with the charge card, following the rest of the stipulations for the policy.

Q: If the vendor accepts charge cards BUT the only way they accept charge cards is if they store card information, and we can’t prove the requirements stipulated by CAPP to allow that, is that a valid justification to pay by check instead?
A: No. If this situation arises, contact your SPCC Program Admin to discuss further.

Q: If the vendor charges over a 3% charge card fee and the cardholder follows procurement’s SPCC guidance on the vendor charging over the allowable 3% fee, but the vendor refuses to lower their fee, does the mandatory card use policy still apply since the fee is over 3%?
A: Yes. If the vendor charges over a 3% card fee but the value of the fees is lower than $450, you must still use your SPCC to pay. The vendor should be informed that they may be reported to DOA for not following the 3% fee cap.

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