Gale, 101216 NEAGO, AGO 16-11

• Case Date: October 12, 2016
• Court: Nebraska

John A. Gale AGO 16-11 No. 16-011 Nebraska Attorney General Opinions State of Nebraska Office of the Attorney General October 12, 2016          SUBJECT: Allowance of an Additional Surcharge or Convenience Fee for Credit Card Payments Made Through Nebraska Interactive's PayPort Point-of-Sale Payment System          REQUESTED BY: John A. Gale Secretary of State Chairman, Nebraska State Records Board          WRITTEN BY: Douglas J. Peterson, Attorney General, L. Jay Bartel, Assistant Attorney General          You have requested an opinion from this office relating to a provision in Neb. Rev. Stat. § 81-118.01(6) (2014) and its impact on a service proposed by Nebraska Interactive, LLC ("Nebraska Interactive"). The Nebraska State Records Board ("Board") has contracted with Nebraska Interactive to operate the state's official website. Under the terms of the current contract, Nebraska Interactive provides users the ability to pay for services online. You indicate that these charges are processed using Elavon—the credit card processor under contract with the State Treasurer and the Director of the Department of Administrative Services pursuant to Neb. Rev. Stat. § 81-118.01(5) (2014). You state that

[a]s part of this process, the person using the website pays a surcharge or convenience fee that covers all of the charges imposed by Elavon and an additional sum to cover the expenses of Nebraska Interactive and provide a profit for Nebraska Interactive. All of this clearly complies with Neb. Rev. Stat. § 81-118.01 because it is an on-line electronic transaction.

         However, you indicate that Nebraska Interactive is now proposing to the Board to expand its services by installing "swipe machines" to accept credit card payments at the physical locations of state agencies.^[1]          BACKGROUND          Your opinion request includes supporting documentation from Nebraska Interactive relating to the proposed service, referred to as "PayPort." Nebraska Interactive describes PayPort as

a non-integrated, fully PCI [Payment Card Industry] compliant online system for offering payment at the point of sale. NIC provides PayPort as a full online service module that includes the ability to integrate input devices such as, credit card swipe devices as well as check imagers and scanners. The system includes a dynamic web page rendering engine that allows for customized input fields based on the agency and service. PayPort also provides a backend administration module for reporting, customer service and setup of cashiers, services and pricing.

         The system can only be accessed by a computer having internet access and equipped with an internet browser. Nebraska Interactive represents that "[t]he purpose of PayPort is to provide an online service which is designed to align financial transactions to an agency's business operations." Benefits of the system include assisting "agencies with accounting standards and best practices, segregation of duties and fiscal accountability down to the user level." The system "also provides the agencies with a scalable and comprehensive solution to provide online payment solutions to their constituents using a computer." Nebraska Interactive indicates that PayPort uses its own "online Transaction Payment Engine (TPE) to securely send payment information electronically to . . . Elavon." Such an arrangement provides state visibility into all state transactions, resulting in the "same flow of funds as all of [its] State online services."          State agencies using the system would be provided an "Organization Administrator" online account for use by the primary agency stakeholder. Nebraska Interactive would train the "administrator to identify other user roles and permissions to determine the most efficient business processes based on what parts of the application the organization users can view or modify." The system would allow approved organization users to input payment information using a keyboard, card swipe, check reader, or other input device. Nebraska Interactive states that "[r]egardless, of the input method the PayPort web page is required to be open [sic] on a computer."          The PayPort system would be funded by adding a portal fee to transactions made on self-funded online services hosted, operated and maintained by Nebraska Interactive. The portal fee is 2.49% for credit card transactions and $1.75 for electronic check. Currently, PayPort is utilized by over 120 cities and counties in Nebraska. Seven state agencies, including the Department of Health and Human Services, the...