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Council approves three-year merchant-services contract with Point & Pay; annual cost estimated at $450,000
Summary
The council approved a three-year contract with Point and Pay LLC to provide credit/debit card and online payment processing, with staff estimating annual costs of about $450,000 to be funded from the general and utility funds; council members directed staff to return with options to recover some transaction costs from payers.
The Garden Grove City Council voted to approve a three-year contract with Point and Pay LLC to provide merchant services for city payment processing, ensuring the city continues to accept credit and debit card, point-of-sale and online payments after the current contract expires in June.
Finance Director Patricia Song presented the staff report and said the city conducted a competitive procurement in October 2024, received eight proposals, and ranked Point and Pay highest after demonstrations and reference checks. "Point and Pay emerged as the top ranked provider, due to its strong technical capabilities, advanced reporting functions, security features, customer support and competitive pricing," Song said.
Key details: the proposed contract term begins 07/01/2025 for an initial three years with automatic annual renewals unless the city provides 60 days'notice. Staff estimated an annual service cost of approximately $450,000, payable from the general fund and utility funds and driven by transaction volume. Song told the council the city currently absorbs processing fees rather than passing them on to customers.
Council members questioned fee structure and asked staff to explore options for offsetting costs. "I want to explore the possibility of offsetting the cost to the city to build it in with the customer," Mayor Pro Tem Dovin said during the discussion. Finance staff noted previous councils had declined to shift fees to customers and that a future change would require updating the city's fee schedule.
The council approved the contract; a roll-call tally was recorded as six yes votes. Staff said they will continue to review the fee schedule and return with recommendations if the council asks to consider passing some costs to payers through a convenience fee.
Action specifics: the contract includes a three-year initial term starting July 1, 2025; staff said Point and Pay will serve as gateway to banks and processors and that the city will continue to accept multiple payment methods. The exact fee-per-transaction that would be assessed to a customer (if the council elects to charge one in the future) was not adopted at this meeting.
