TEXAS STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL. MERCHANT CARD SERVICES July 31, 2009 TABLE OF CONTENTS

Transcription

1 TEXAS STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL MERCHANT CARD SERVICES July 31, 2009 TABLE OF CONTENTS I. Introduction and Current System Merchant Services II. III. IV. General Statement of Services Required Proposal Submission Instructions and Qualifications Current Merchant Service Information V. Required Services Attachment A: Attachment B: Attachment C: Transaction History by Campus/Merchant (Available on the web as noted below) Fee Proposal Worksheet General Background Information on TSUS Institutions

2 Texas State University System Austin, Texas Request for Proposal Merchant Card Services I. INTRODUCTION The Texas State University System (the System ) is requesting proposals for a system-wide merchant services contract to be awarded November 20, 2009, with service to begin February 1, 2010 and extend through January 31, 2015 as approved by the Board of Regents. This Request for Proposal (RFP) details the System's goals and the services required. The System intends to reduce the number of processors and systems currently being used. Through this contract the System intends to obtain the highest level of service for each of its institutions regardless of their size or location, to minimize costs and to improve operational efficiencies. The System is interested in utilizing the best current and forward looking technology. This RFP identifies current and required services for each of the institutions detailing transaction history over the past six months by institution and by merchant account. It specifies all required qualifications for processors, stipulates service requirements, details historical transaction activity at all institutions, establishes contract standard provisions to be incorporated in the contract, and provides all submission instructions. The RFP also allows for the processor to add other alternatives and ideas which will fulfill the objectives of the System. It is the intent of the System that the processor awarded the contract will execute one contract with the System encompassing all institutions of the System. The System is acting for and on behalf of each of its eight colleges and universities (the institutions ). Through this contract the System intends to obtain stream-lined, end-to-end processing to minimize costs and operational burdens while improving operational efficiency for all its institutions under the one contract. The contract will fully incorporate the terms and conditions of this Request for Proposal (RFP) and the proposal submitted in response to it. The processor will make all required services agreed to by the System available to all institutions of the System at the proposed pricing levels throughout the contract period. II. GENERAL STATEMENT OF SERVICES REQUIRED The institutions which make-up the System ( are: - Lamar Institute of Technology, Beaumont - Lamar University, Beaumont - Lamar State College - Orange - Lamar State College - Port Arthur - Sam Houston State University, Huntsville - Sul Ross State University - Alpine - Sul Ross State University - Rio Grande College - Texas State University - San Marcos 2

3 Background and general information on each institution is found in Attachment C. The System s administration in Austin does not accept credit cards and will not be part of this RFP process. III. PROPOSAL SUBMISSION INSTRUCTIONS AND QUALIFICATIONS By submitting a proposal in response to this RFP, processors will be deemed to agree to the mandatory contract and service provisions contained herein. This RFP and the proposal submitted will be incorporated into and form the basis of the final services contract. 1. Proposal Format In order to fully and equitably evaluate each proposal a standard reply format is required. Each proposal must include a response to each item in the RFP, in the order given, along with completion of Attachment B for proposed fees. Only proposals submitted in the prescribed format will be evaluated for award. Attachment A contains summarized and detail information for each institution. (a) A listing of merchant accounts with limited equipment and high-level transaction history is shown in a file entitled Account Merchant Accounts for each institution. (b) A summary of transactions by type over a six-month period is defined in a file entitled Merchant Activity and (c) merchant services statements are also attached. The amount of information will vary because of reporting capabilities by the various acquirers. Texas State University reports are internally produced and detailed but all other institutional information is drawn from the monthly statements. The Attachment documents are arranged by institution and available at: Schedule for Proposal Submission The System will make every effort to adhere to the following schedule. 07/31/09 Release of Request for Proposal 08/14/09 2:00pm CST Deadline for all questions pertaining to RFP 08/21/09 2:00pm CST Responses to all submitted questions provided 09/11/09 2:00pm CST Deadline for proposal submission 11/20/09 Board of Regents award of contract 02/01/10 Contract commencement 3

4 3. Proposal Submission To be eligible for consideration under this request, a total of seven (7) complete copies of each proposal shall be submitted by 2:00 pm CST on September 11, 2009 to the address below. Proposals received after that time will not be accepted. Amendments or additional information supporting the proposal will not be accepted after the submission deadline unless requested by the System. The proposal must be submitted in a sealed envelope or packet marked Proposal for Merchant Services. An accompanying transmittal letter must be signed by an individual authorized to bind the submitting firm, state that the proposal is valid for 180 days from the submission date, state full agreement with the conditions and requirements of the RFP, and give full contact information regarding the proposal. Submission of the Proposal must be in both written and electronic form (on an accompanying CD). The proposals must be delivered by mail, express mail, or in person to: Dr. Roland Smith Vice Chancellor for Finance Texas State University System 200 East 10th Street - Suite 600 Austin, TX Telephone Fax roland.smith@tsus.edu claire.jackson@tsus.edu There is no limit on the physical size of the proposal but a complete yet succinct, and unambiguous presentation of the services offered and the fees required will be expected. Proposals should provide a clear and straightforward description of services and the firm s ability to meet requirements. Withdrawal of proposals will be accepted up to the deadline for proposal submission time and date above. Any firm submitting a proposal is deemed to have read, understood and agreed to all terms, conditions and requirements set forth in the RFP. The selection may be made on the basis of the proposals as initially submitted, without discussion, clarification or modification. The System reserves the right to request further information or presentations or to enter into negotiations for terms as part of the evaluation. 4. Pre-Proposal Conference A pre-proposal conference is not currently scheduled or anticipated. Questions regarding this RFP, or the services requested in it, will be accepted in form to Roland Smith, roland.smith@tsus.edu, on or before 2:00 pm CST, August 14, Responses to any material question submitted will be communicated via to all known proposers by 2:00 pm CST August 21, 2009, as necessary. If the questions indicate that a pre-proposal conference or conference call is required, all known proposers will be notified appropriately. 4

5 5. Selection Criteria The following criteria will be used as the weighting basis for evaluation of the proposals and the award recommendation. 40 % - ability to provide services and reporting required, 40 % - proposed service fees, 10 % - customer service issues, and 10 % - experience, creditworthiness and stability of the firm. Award may not be made to the firm submitting the lowest price proposal. The System will choose the firm which submits the most responsive overall proposal. 6. System Rights The System reserves the right to: - waive any defect, irregularity, technicality, or informality in the proposal or proposal procedures, - reject any and all proposals, - accept any proposal most advantageous to System, - request additional information or require a meeting with representatives for clarification, - cancel, revise, and/or reissue this request for proposal, - negotiate contract terms and conditions, - modify deadlines, and - select any proposal deemed to be in its best interest as determined by the System. IV. SYSTEM MERCHANT SERVICES CURRENT INFORMATION All the institutions of the System currently utilize merchant services for various type payments. Registration is a major source of credit card use but others uses range widely and include: - sports and recreation - continuing education - retail outlets - libraries - copiers - web processing - parking - transcripts - publications - department charges Detail available from current processing providers is shown in Attachment A for the last six month period organized by institution. The variety of information available from the multiple processors with multiple report formats has been consolidated as much as possible for analysis purposes. Information on the institutions describes the name and number of merchant accounts, the equipment owned or leased, and the overall count of transactions plus net sales. For most of the institutions, detail on transactions by type has also been noted as Merchant Activity. Scanned statements are included by institution. Currently the institutions receive services on an institution by institution basis from these multiple processors: Sul Ross Chase Paymentech Sul Ross RGC First USA Lamar Beaumont Hibernia Lamar Institute Hibernia 5

6 Lamar Orange Lamar Port Arthur Sam Houston State Texas State San Marcos First National Hibernia Bank of America Global Payments The institutions accept Visa, MasterCard, American Express, and Discover credit cards as well as debit cards and accept the cards as a POS and online as well as on PIN and PINLESS bases. V. REQUIRED SERVICES A complete and succinct response to each question is required. Responses should be in the order given and references to additional information provided should be clear for evaluation purposes. 1. Firm Stability and Background The System requires a firm which is fiscally sound and able to provide the required services throughout the contract period. The System represents public funds and as such requires full transparency and disclosure on financial matters. a. Describe the firm and include the following: major lines of business; and name, number and location of divisions or operating units. Provide the firm s latest annual report or 10K and other relevant financial information as applicable. b. Provide current short and long term ratings for the firm from two nationally recognized ratings agencies. c. Provide a brief history and background of the firm, including parent and/or subsidiary companies relating to the merchant card services. Describe your firm s organizational structure especially as it applies to service provision and customer service. Does the firm have any joint ventures in place for merchant services? Explain. d. How long have you offered merchant card processing services? What is the firm s future strategy as it relates to merchant services? e. What related services, if any, do you offer? f. Do you use a third party for any segment of customer services or card processing services? If yes, explain fully. g. Is the firm HUB certified? If so, by which agency? Does the firm plan to use any HUB businesses as sub-contractors? 6

7 2. Firm Competitive Position and Future Commitment to Providing Services a) What differentiates your firm and the service offered from that of other acquirers/processors? b) How do you plan to stay current and competitive? c) What major changes do you see occurring in merchant services in the next five years? What are the plans to help your customers move to new technologies? What approach is the firm taking in the development of new services? d) Explain your firm s representation on MasterCard or Visa boards or committees. e) What new services or features have you implemented in the past two years? Do you have any new services/technologies in implementation currently? f) Does the firm anticipate major changes in hardware in the next three years? If so, what changes should the System anticipate and how should it plan for those changes on hardware issues? g) What formal or informal bank/vendor relationships do you have and how can they be leveraged in merchant card processing? 3. References and Current Client Base a) Specify the category and number of customers for which you are currently providing card processing services. How many higher education institutions/merchants do you currently serve? What was the firm s total transaction count and dollar amount processed from ? b) What is the daily average number of transactions currently processed? What is the firm s maximum daily processing capacity? At what point is the firm planning to extend its processing capacity? c) Where is the firm s processing center(s)? Is the processing structure designed for redundancy to address disaster situations? How often are systems tested? d) What would the System s volume ranking be among your customers, given the System s current number of transactions? What is the transaction volume of your largest customer? Given the volume of the System, how would the System be classified? (ie. Large corporate, small business, etc) e) How do the System s peak periods (fall, spring and summer registrations) compare to your system-wide peak periods? f) How many merchant accounts does the firm serve currently? What is the total average yearly dollar volume? 7

8 g) Provide the names, addresses and phone numbers of four references, preferably those with similar multi-institution structures like the System and with comparable volumes and communication capabilities, and who are currently using your card processing services. Select a mix of long-standing and recently acquired customers. Identify how long these clients have used your services. h) Does the firm have customized programs for higher education? Describe fully. i) Explain why the firm believes it was able to win your last two customers from your competitors. j) Provide any additional information that is relevant to this RFP and your capabilities to provide the services requested (e.g., product brochures, articles in trade journals). 4. Relationship Representatives a) List the names, titles, phone, location, and addresses and provide brief biographies of the relationship representatives and senior management that would be directly involved in and responsible for a contract with the System. b) Describe the relationship management team that will service the account, as well as their functional responsibilities and their position in the overall firm. Will there be local representation for all the system schools? c) How will services be provided equally to all campuses; on implementation and on an on-going basis? d) How many employees does the firm have in each functional area involved in providing this service? What is the expected turn-around time on issue resolution? Is there any guarantee on the timing and escalation of issues? e) How often does the representative meet and review with the component schools to ensure they are receiving the lowest discount/interchange rates and prevent downgrades? 5. Card Acceptance/Interface Processing a) Does the firm support all major payment types, debit cards, gift cards, corporate cards, and other emerging options? Does support vary for any of these? b) Describe the hardware necessary for acceptance of credit and debit cards (a) with card present and (b) card not present, (c) using an IVR application, (d) via e-commerce (internet), and (e) pin-based debit. What equipment are your recommending or requiring for the System? Does the firm provide the equipment on a lease or purchase basis? Do you offer an equipment maintenance plan? If so, what is the turn around time and costs involved? 8

9 c) Describe the software necessary for acceptance of credit and debit cards (a) with card present and (b) card not present, (c) using an IVR application, (d) via e-commerce (internet) and (e) pinbased debit. Describe the interface requirements and all compatibility issues. d) Describe the process involved for acceptance of credit and debit cards in the five situations described above. e) The System uses various gateways. Can the firm process transactions from various gateways including Verisign Payflow Pro, Payflow Link, and LinkPoint? Describe fully. Indicate all payment gateways supported in addition to these noted and address all fees for setup, monthly recurring charges and per transaction fees on Attachment B. f) Describe the process to add additional third party gateways. g) Describe telephone authorization options in the case of communication failures. h) What supplies will be provided by your firm with a maintenance contract, if applicable? i) How does the firm test/confirm PCI compliance? What requirements does the firm have? What testing or support is available? How does the firm qualify the merchants? 6. Authorization Processing a) What authorization methods does the firm support and which are recommended for the System (e.g., dial, mainframe dial remote job entry, lease line, frame relay, Internet)? List and describe alternatives. List any processor specific hardware needed to support each option. b) What are the procedures to reverse/recall an incorrect authorization? Describe how an afterauthorization return would be handled. c) Do you have the ability to process internationally? List all countries and currencies where the System could authorize and settle transactions using toll-free numbers. d) Describe any limitations on processing such as assigned windows for obtaining authorizations or settlement, number of files allowed per day, the number of transactions and/or dollar limits per file, or dollar amount per transaction authorized and settled? What limitations are set by batch? Daily processing? Are there any limitations on the number of files transmitted each day? Any limitations at all daily? e) Does your firm maintain direct authorization and settlement links to the various card organizations, or do you utilize a third party network for authorizations? Describe your configurations. Is your firm introducing to a direct processor or is it the direct processor? f) Do merchants incur any monthly access fee to connect to the authorization network? (All fees and fee categories are to be addressed on Attachment B.) g) Describe your AVS (address verification and shipping date compliance) process. 9

10 h) Describe the procedures to be followed if a transmission request is denied authorizations. i) Provide any authorization differences between various card types. j) Provide your average response times for dial and lease-line authorization methods for both peak and normal periods. k) What is your maintenance and/or replacement policy for leased equipment? l) Describe the network monitoring system and operation. 7. Settlement Processing a) Describe the settlement process workflow for all parties explaining any differences by card type. b) Provide a funds availability schedule by card type. Is this negotiable? Is all funding next day? Describe. Is any expedited funding available? c) What is the settlement transmission time frame for Visa, MasterCard, Discover, American Express, Diners? Does this differ at any time? Include daily cut-off times. Will holidays affect the settlement process or timing? d) What is the cut-off time that sales transactions can be transmitted to meet settlement times? e) Do settlement times affect the System s processing/discount expense? f) Is settlement made by ACH or Fed wire? Can settlement details be passed via CTX on ACH transactions? g) Do you allow for multiple settlement accounts by merchant or institution? h) Are settlement amounts listed separately on the bank statement or will they appear as one daily sum? What level of detail is available? Will Saturday and Sunday activity be combined into Monday activity? i) Are settlements on gross amount and fees charged monthly? j) Does your firm offer split dial for AMEX transactions or is there a pass-through fee? k) Describe recovery procedures for lost batches. 8. Ticket Retrieval and Chargebacks a) Describe the ticket retrieval request process along with turn around times. Is this accomplished totally electronically? Does the firm support document imaging other than facsimile for transmission of or response to a retrieval request? 10

11 b) What response times and process does the firm require for ticket retrieval? How do these time frames compare to Association rules? State the average elapsed time from receipt of a retrieval request to merchant receipt. c) Define the chargeback cycle. What percentage of chargebacks is handled without merchant involvement? Does the firm have a standard rule-based logic to facilitate dispute resolution processing? d) On average, how often are chargebacks reversed? State your reversal rates (without merchant involvement) in total and by chargeback type in the last 12 months. e) Will the firm provide a designated contact person or a department to help the System manage chargebacks specifically? f) What reporting is used? Define and give examples. What tools do you have for reconciliation and reporting on chargebacks? g) Are credit card chargebacks and debit adjustments netted from daily proceeds, or are they debited separately? Are funds debited from the operating account or a separate escrow account? Can the information be tied back later? Show examples. h) Will the System receive credit of merchant fees for chargebacks? When are they credited? i) Does the firm have the capability to archive, retrieve transaction information, including signatures for bankcard transactions and non-bank card transactions? What information is stored and for what period of time? What system is available to the merchant to enable retrieval of this information online? 9. Debit Card Processing a) Does the firm support BIN (Bank Information Number) file management to differentiate between debit and credit card transactions? b) Describe the firm s debit card processing capabilities. Which networks are used? Which are supported? What differences, if any, in workflow occur from credit cards? c) Describe the firm s PIN and PINLESS debit card processing. d) Are debit card transactions routed automatically to the lowest cost network? Descibe. 10. Technical System Capabilities a) Describe the processing platforms pertinent to the firm s recommended solutions for the System. Provide system specifications. Describe your capacity and scalability for the System s various sized institutions. b) Is the firm s processing software CPS (Custom Payment Service) compliant? 11

12 c) Does the firm s software provide for integration in interface alternatives (such as XML, SOAP, Java, C++, COM, Perl, etc.) d) Does the firm s processing software support Purchasing Card Levels II and III? e) What is the firm s process for handling test transactions? Are test cards provided and if so, what types? f) How far back are transactions verified with AVS? Describe the process. g) Outline the security measures in place for the protection of data transmitted for processing. Are all the major verifications available (CVV for Visa, CID for AmEx, and CVC for MC)? Do you support CVV2 (Card Verification Value 2)? h) Is data imaging (e.g., signature capture) available? If so, describe. i) Is the firm able to process smart card transactions? If so, describe. j) Does the firm have virtual terminal capabilities? If so, describe. 11. Transmission Issues a) Describe the firm s recommended transmission method and options (e.g., dial, lease line, batch, real-time, Internet) including limitations and advantages/disadvantages. b) Describe the monitoring and notification process if a transmission fails. c) Does the firm s processing system identify and eliminate duplicate transactions? d) Are there any limitations on the number of files transmitted each day? 12. Security a) How does the firm handle PCI compliance initiatives? How do you qualify merchants? b) How does the firm make clients aware of new PCI initiatives and general information? c) What PCI training is available? What consulting is available? Are there charges for these services? d) Describe the security measures used to prevent unauthorized user access to either the system or the data. e) Describe the security measures used to protect Internet transactions. f) Describe the procedures and policies in place to prevent internal fraud. Where does liability fall in the process of recouping loss due to such fraud? 12

13 g) Describe all fraud protection tools. What options are available (Verified by Visa and MasterCard Secure Code) or does the firm have other/additional proprietary security functions? h) Describe your disaster recovery and system recovery processes. 13. Disaster Recovery a) Does the firm have a continuity plan for your processing systems and platforms in a disaster situation? Describe your local and system-wide back up and/or redundant systems. b) Describe the firm s hot-site back up capabilities in case of a complete site failure. How often are systems tested? c) When was the last time use of your back up system was required, the circumstances, and the length of time the back up system was in use. d) What is the expected time frame to become operational should a catastrophic event occur at a merchant site? What is the firm s role in the process? e) What has been the firm s up-time percentage the last two years? Provide system availability statistics for the current and prior year. Over the past year, what was the longest period that you were unable to authorize transactions? Describe the situation, including the source of the problem and the time it took to fix the problem. 14. Information Reporting Complete and timely online reporting is a critical factor for the System. The System requires full online reporting and download capabilities including the ability to define and sort information at various levels. Reporting should be comprehensive and allow for customization. The firm should make every effort to fully describe and illustrate the reporting capabilities in their response. a) Describe all reports available and the software used to receive and view reports. Provide an overview of reporting cycles, procedures, and capabilities. Provide a sample of each detail and summary report available or a link to sample reports online. Is all information and all reports available on the Internet? Define the download capabilities, level of customization, and drill down capabilities available on online reporting and reports. Describe the daily and/or monthly reconciliation reports available to the merchant. Define: standard reports (transaction reports, funding reports, etc.) special reporting capabilities level of detail available retrieval capabilities imaging capabilities access mode reporting frequency 13

14 b) What is the standard delivery time frame for reports and statements? What alternatives are available? c) What delivery methods are used for reports (e.g., mail, , and fax) on reports and statements? d) Does the firm retain or archive reports for clients? Can all reports be downloaded? e) Is historical information regarding sales, refunds, and chargebacks maintained in a database for access by the merchant? If a merchant needs historical reports (from a previous reporting period) or a specific time frame how are they made available? How far back are reports available? How long is reporting data stored in your system? How much time does it take to retrieve historical reports or data? f) Describe how multiple merchant numbers are reported and the flexibility afforded the merchant for customizing the reports. Can the merchant roll up specific groups for reporting independent of other groups? g) Can reports be tailored to send specific sections, for example, report groups comprising a subset of merchant numbers, to different locations? Is there an additional cost for this service? What charges are involved in customized reports? h) Can reports be tailored to specific financial accounting time schedules? i) Describe ad hoc reporting capabilities. j) Do reports encompass/include AMEX and Discover transactions for reconciliation and research purposes? j) Describe the training and re-training available for the firm s reports. k) Can the firm provide institution-wide and System-wide reports and institution-wide reports as well as merchant reports? Define and describe. l) Provide a sample statement. 15. Implementation a) The implementation target date for these services is February 1, 2010 however the System realizes that simultaneous implementation may not be feasible. Address how the company would schedule implementation for all the institutions to come online as quickly as possible. b) Describe the merchant and institution implementation process and the expected time frame for implementation. Focus on (a) merchants which will have to be transferred from another processor as well as (b) any new merchant. c) Describe the merchant training process with regard to (a) new merchant training or re-training from a prior processor and (b) ongoing training (e.g., courses offered, frequency, location, and cost). 14

15 d) After initial implementation, how does the individual institution setup new merchant accounts? How long is that process? d) How are updates and dissemination of PCI and industry-related rules or regulatory changes accomplished? e) Does the firm publish a newsletter covering industry issues, rules, and regulations? How often is this published? How is it disseminated? Provide the latest copy. f) Specify the persons, by name and function, which will have primary responsibility for merchant implementation and training. g) Does the firm provide fraud-management training or awareness programs? 16. Customer Service a) Is customer service available 24/7? How is it provided (phone or )? Are there any charges for technical or customer support services? b) Are customer services centralized or decentralized? c) Describe the promotional support you provide (e.g., signs, supplies, funds for specific purposes, advertising allowance). Is there any additional cost for this support? d) Describe the firm s customer service organizational structure. Is the customer service function performed in-house, or is it outsourced? Where would the System s support team be located? e) Will a specific customer service representative be assigned to handle this business? Describe the responsibilities of the customer service personnel, including the chain of command for problem resolution. f) Does the firm have scheduled periodic meetings with customers or client advisory groups to review the service? Does the firm organization host or sponsor focus groups, on-site training, user groups, etc.? If so, describe the frequency and topics of discussion. g) Describe your multilingual customer service support capabilities. h) What are the hours of operation for the customer service unit in the Central Time Zone? i) Are there established turnaround times for research items? If so, specify. j) What is the firm s history in meeting established response times? k) Do you offer technical support for the software you provide? If so, provide the hours of support operations. 15

16 l) How will you help the System and its institutions to reduce merchant services costs and manage downgrades? What reporting and tools does the firm have to assist the System in this process? What education assistance is directed to a decentralized organization like the System to achieve processing efficiency? m) Describe the dispute process and procedures for both cardholders and merchants. n) What are the procedures to correct duplicate transactions? Does your system identify and eliminate duplicate transactions automatically? Describe process. o) Does the firm offer processing solutions to perform (a) deferred billing, (b) installment billing and (c) recurring billing? p) Describe maintenance and replacement services for leased equipment. All costs for the service, shipping, etc. Are to be reflected on Attachment B. q) Do you periodically provide cost-of-acceptance analyses for clients to ensure the best application and advantage? 17. Pricing and Contracts a) If the System is unable to execute a System-wide processing contract and only certain institutions execute a contract with your firm, what, if any, changes will be made to the proposed terms, conditions and fees to the executing institutions? b) Provide a price schedule for the services described in the RFP and any other unspecified costs required to provide the service on Attachment B. Describe the firm s overall pricing structure. Is the firm offering a fixed cost plus surcharges fee or a interchange plus fee? c) List and define transaction fees for authorization, settlement, network, communications and any other fees on Attachment B. Additions to the given form are expected. Include any one-time or set up charges, research fees and include all other fees or charges that will or could be charged (e.g., interchange rates by location, regular and ad hoc reporting costs). The System will not be obligated to pay for any fees not specified in the proposal. Please utilize Attachment B and its format as much as possible for evaluation purposes and complete all the questions in the second example section of the form. All fees not currently listed should be added to the Attachment and fully defined. d) List all of the firm s possible non-qualified surcharges categories (such as reward card fees, etc.) The fees for these are to be included on Attachment B. e) Detail any change in association fees (Visa and MC) that would be charged through the program from the published interchange rates of these companies. f) Please provide bundled and unbundled pricing as applicable and consider both fixed and variable rates for the processing fee of the firm. g) Please describe the adjustment process for downgrades and the timing of them. 16

17 h) When are discount fees deducted from the DDA account? Are discount fees calculated on gross or net sales? i) Provide a pro forma analysis based on the System s indicated volumes and service requirements. j) Can customers order charge slips, signs, imprinters and other supplies through you or directly from a vendor? How are the orders handled? What is the normal shipping time? k) How and when is the customer notified of price adjustments? Processor fees for the contract are set for the contract period? What if any prices are adjusted on a regular basis (semi-annual or annual)? Define and describe. l) Provide a copy of the anticipated applications and contract to be signed with the System. The System is planning to execute one contract the terms and pricing for which will extend to all institutions of the System. 17

18 ATTACHMENT A INSTITUTION AND MERCHANT SERVICES ACOUNT INFORMATION In an effort to give proposers the best possible information of activity within the institutions, merchant services transactions and category information has been gathered from monthly statements provided to the institutions from several different processors and providers. Complete information has not always been available from all sources and the format and nomenclature for the data varies. To provide standardized and organized information two basic spreadsheets have been created to consolidate data for presentation. The two primary formats are: (a) Merchant Account Information by Institution. This spreadsheet lists the merchant accounts, the identifying account numbers, the equipment in place (if available) and high level summary transaction information. (b) Merchant Account Activity. This spreadsheet summarizes six months of data for Visa, MasterCard, Discover and American Express with the number of transactions, net sales, and average ticket size as well as the frequency of other type charges for a profile of each merchant account. Certain of the institutions have provided additional detailed information and these have been attached as individual files. In addition to these summarizing spreadsheets, sample monthly statements are provided in order to allow for additional analysis by proposing firms, if desired. Note that Sul Ross Alpine and Sul Ross Rio Grande are administered as one and therefore are shown as one institution. The information files have been placed in compressed file folders by institution. These files can be retrieved on the web at the following addresses: If you have any difficulty in opening these files, please contact linda@patterson.net.

19 Attachment B - Part #1 Schedule of Proposed Fees Texas State University System As part of your response, provide a complete schedule of the fees to be applied to merchant services for the Texas State University System in response to the RFP dated July 31, Complete both worksheets. All fees required to provide the service must be provided. Alternative formats to provide those fees are acceptable as long as all fees are defined and categorized for analysis purposes. The format below and on the second worksheet should be utilized - but extended as necessary - if possible to facilitate evaluation. Description Proposed Fee Notes, as applicable Processor Levied Fees Minimum Monthly Discount Fee/Minimum Account Billing Credit Card Transaction Fee Assessment Fees Debit Card Transaction Fee (with PIN) online debit Debit Card Transaction Fee (without PIN) offline debit Debit Card network Fee Proprietary Card Transactions Discount Rate - Qualified Discount Rate - Non-Qualified ACH Fees Per authorization Fee Voice and VRU Authorization Dial Up Leased Line ISDN Wireless Processing of AmEx and Discover Processing of Diners Club Cards Address Verification Chargebacks Statement Fee Application Fees Daily Close-out Fee Non-Qualified Surcharges Levied by: Pass-through Fees Interchange Fees based on type capture and merchant category code Assessment Fees Visa per transaction Mastercard per transaction Access fee per transaction Visa per transaction Mastercard per transaction Discover and Diner's Switch fees (PIN debit cards) Levied by: Card Associations and Networks Common Payment Service Fees Transaction fees Levied by: American Express Fees Discount rate - AmEx cards Discount rate - Prepaid cards Split transaction fee Levied by: Discover Fees Discount rate Discount rate - Prepaid cards Levied by: Page 1 of 2

20 Attachment B - Part #1 Schedule of Proposed Fees Texas State University System Description Proposed Fee Notes, as applicable Online Reporting Fees By reporting firm/service: Online Reporting Terminal and PC Services (Specify Equipment Manufacturer and Model) Equipment Fees (POS Terminals) Terminals Lease/Purchase Printers Lease/Purchase Pin pads Lease/Purchase Software Reprogramming of System Owned Equipment Levied by: Account Opening and Maintenance Services Set-up - Instiallation Fees On-site Implementation Fee Bank Set-up Fee Program Maintenance Reporting Maintenance Interface software fees by product Interim accountopening fees Maintenance and Prior Day Reporting Maintenance and Same Day Reporting Reprogramming Services Technical Support Supplies Shipping Expenses for Supplies Consulting Services Levied by: Training On-site training Telephone Training Phone Re-Trainng Additional On-going training Levied by: Other: Levied by: Page 2 of 2

21 TABLE 1 TEXAS STATE UNIVERSITY SYSTEM Revenue Financing System Pledged Revenues Available Pledged Revenues Not Including Fund Balances (1) 280,347, ,970, ,110, ,165, ,263,787 Pledgeable Unappropriated Funds and Reserve Balances (1 & 2) (2) (2) (2) (2) (2) Total Pledged Revenues 280,347, ,970, ,110, ,165, ,263,787 (1) The Available Pledged Revenues shown above consist of tuition, designated tuition, student center fees, and recovery of indirect costs for federal grants and contracts, federal pass-through grants from other agencies and state grants and contracts. Prior to 1997, certain pledged revenues were characterized as the "building use fee" of the University System. In The Texas Legislature passed legislation that characterized the "building use fee" as "tuition" (2) In addition to current year Pledged Revenues, any unappropriated or reserve fund balances remaining at year-end are available for payment of the subsequent year's debt service. Financial reporting changes adopted by the State of Texas beginning with FY2002 to comply with Governmental e Accounting Standards ds Board pronouncements ou e preclude the continuation o of this data element e e since it is no longer separately reported. Maximum Annual Debt Service Over Remaining Life of Parity Debt (A) 65,594,340 (A) Includes Prior Encumbered Obligations, Outstanding Parity Debt and the Bonds. 1

22 TABLE II TEXAS STATE UNIVERSITY SYSTEM Debt Service Requirements Outstanding Total Fiscal Debt The Bonds (2) Annual Debt Year Service (1) Principal Interest Total Service ,463 32,965,001 24,611,496 57,576,497 58,184, ,688 36,820,000 28,162,652 64,982,652 65,594, ,763 33,565,000 30,728,384 64,293,384 64,907, ,200 33,320,000 29,093,816 62,413,816 63,028, ,950 32,755,000 27,596,829 60,351,829 60,534, ,075 33,670,000 26,000,422 59,670,422 59,853, ,125 34,810,000 24,434,698 59,244,698 59,422, ,025 34,265,000 22,770,985 57,035,985 57,219, ,700 34,340,000 21,047,085 55,387,085 55,569, ,795,000 19,353,186 55,148,186 55,148, ,600,000 17,566,774 55,166,774 55,166, ,165,000 15,699,367 47,864,367 47,864, ,800,000, 14,087,275, 47,887,275, 47,887,275, ,410,000 12,398,675 45,808,675 45,808, ,055,000 10,759,012 44,814,012 44,814, ,715,000 9,112,819 33,827,819 33,827, ,235,000 7,877,913 30,112,913 30,112, ,375,000 6,751,700 30,126,700 30,126, ,540,000 5,567,600 30,107,600 30,107, ,165,000 4,324,375 25,489,375 25,489, ,225,000 3,233,750 25,458,750 25,458, ,055,000 2,122,500 11,177,500 11,177, ,515,000 1,669,750 11,184,750 11,184, ,985,000 1,194,000 11,179,000 11,179, ,385, ,750 6,079,750 6,079, ,730, ,500 5,155,500 5,155, ,780, ,000 3,969,000 3,969,000 Total 3,357, ,040, ,474,313 1,061,514,314 1,064,872,301 (1) Texas State University - San Marcos, Series 1986 (Housing) and Series 1996 (Utility System). Excludes the Refunded Bonds and Taxable Refunded Bonds. (2) Texas State University System Series 1998A, 1998B, 1998 Taxable, 2000, 2001, 2002, 2002A, 2003, 2004, 2005, 2006, 2006A and

23 TABLE A-1 TEXAS STATE UNIVERSITY SYSTEM Headcount Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University 6,137 6,156 6,218 Lamar University - Beaumont 10,804 10,595 9,906 10,213 13,280 Lamar Institute of Technology 2,543 2,711 2,416 2,590 2,885 Lamar State College - Orange 2,047 2,143 2,409 2,003 2,147 Lamar State College - Port Arthur 2,423 2,509 2,009 2,325 1,985 Sam Houston State University 14,335 15,357 15,903 16,416 16,612 Sul Ross State University 1,967 1,918 1,829 1,774 1,841 Sul Ross State University - Rio Grande College 1,056 1, Texas State University - San Marcos 26,799 27,129 27,503 28,132 29,105 Total 68,111 69,524 69,141 64,411 68,794 * These columns exclude Angelo State University (ASU). The Texas Legislature 3

24 TABLE A-2 TEXAS STATE UNIVERSITY SYSTEM Graduate Headcount Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University N/A N/A Lamar University - Beaumont 1,683 1,444 1,442 1,854 4,919 Lamar State College - Orange A A A A A Lamar State College - Port Arthur A A A A A Lamar Institute of Technology A A A A A Sam Houston State University 2,038 2,127 2,136 2,269 2,313 Sul Ross State University Sul Ross State University - Rio Grande College Texas State University - San Marcos 4,384 4,149 3,923 4,084 4,302 Total 9,572 9,079 8,785 9,016 12,333 A - These are freshman and sophomore level institutions. They offer no graduate programs. * These columns exclude Angelo State University (ASU). The Texas Legislature transferred ASU to the Texas Tech University System effective 09/01/

25 TABLE A-3 TEXAS STATE UNIVERSITY SYSTEM Full-Time Equivalent Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University 5,213 5,294 5,164 N/A N/A Lamar University - Beaumont 8,138 8,094 7,670 7,817 9,146 Lamar State College - Orange 1,321 1,316 1,262 1,274 1,359 Lamar State College - Port Arthur 1,515 1,492 1,466 1,410 1,245 Lamar Institute of Technology 1,785 1,920 1,743 1,871 2,075 Sam Houston State University 11,691 12,721 13,177 13,479 13,656 Sul Ross State University 1,563 1,516 1,410 1,319 1,403 Sul Ross State University - Rio Grande College Texas State University - San Marcos 21,356 21,706 22,006 22,869 23,494 Total 53,174 54,620 54,408 50,554 52,901 Note: Undergraduate Full-Time Load - 15 Hours, Graduate Full-Time Load - 9 Hours. * These columns exclude Angelo State University (ASU). The Texas Legislature transferred ASU to the Texas Tech University System effective 09/01/

26 TABLE A-4 TEXAS STATE UNIVERSITY SYSTEM Headcount Enrollment by Residency Status For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007(1) Fall 2008(1) Texas Residents 65,450 66,995 67,535 61,994 66,203 Non-Texas Residents 1,235 1,364 1,313 1,153 1,354 Non-US Residents 1,426 1,165 1,244 1,182 1,237 Total 68,111 69,524 70,092 64,329 68,794 (1) These columns exclude Angelo State University 6

27 TABLE A-5 TEXAS STATE UNIVERSITY SYSTEM Admissions and Matriculation Information (1) For the Most Recent Five Fiscal Years 2004(1) 2005 (2) 2006(2) 2007(2)(3) 2008(2)(3) Applications Submitted 58,524 56,140 54,287 53,590 53,345 Applications Accepted 47,675 39,929 40,760 37,596 35,525 Matriculations 27,430 23,790 24,115 22,000 20,263 % Accepted 81.46% 71.12% 75.08% 70.15% 66.59% % Matriculated 57.54% 59.58% 44.42% 41.05% 37.98% (1) These columns reflect only admissions and matriculation data for undergraduates for Angelo State University, Lamar University, Sam Houston State University, Sul Ross State University, and Texas State University-San Marcos. This information is inclusive of the fall, spring and summer sessions of the respective fiscal years. Admissions and matriculation numbers of the type set forth above were not routinely or consistently kept for the Lamar Institute of Technology, Lamar State College - Orange, Lamar State College - Port Arthur, and Sul Ross State University - Rio Grande College. (2) These columns include admissions and matriculation information for all components of the Texas State University System. (3) These columns exclude Angelo State University. 7

28 TABLE A-8 TEXAS STATE UNIVERSITY SYSTEM Combined Statement of Current Funds Revenues and Expenditures FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 Current Funds Revenues Tuition 48,800,936 51,543,403 55,288,713 58,633,271 63,187,933 Designated Tuition (General Use Fees) 25,675,763 27,585,605 32,930,098 37,806,768 43,191,988 Student Service Fees 14,601,684 14,677,776 15,840,077 16,821,144 17,359,347 Other Fees 25,510,430 26,327,429 29,097,070 33,473,021 38,776,355 Tuition Remissions and Exemptions 7,703,859 7,611,896 7,423,144 7,552,091 8,223,283 State Appropriations-General Revenue 173,981, ,924, ,414, ,466, ,520,995 State Appropriations-H.E.A.F. 32,650,104 32,650,104 32,650,104 32,650,104 34,950,547 Federal Grants and Contracts 36,608,120 39,517,051 44,958,438 45,698,575 49,929,300 Federal Pass-Through Grants from Other State Agencies 2,592,105 2,613,174 4,332,308 3,537,422 5,651,964 State Grants and Contracts 1,242,536 1,938,385 1,472,619 5,080,346 3,843,308 State Pass-Through Grants from Other State Agencies 2,314,405 3,768,302 1,509,353 5,323,178 6,696,736 Local Gifts, Grants, and Contracts 529, ,389 1,722 94, ,468 Private Gifts, Grants and Contracts 7,820,408 7,603,064 9,063,383 10,464,191 17,907,984 Net Increase/(Decrease) in the Fair Value of Investments 2,202,104 (67,976) (22,562) 714,829 Investment Income 4,718,881 5,676,508 6,266,292 8,192,649 9,768,565 Endowment Income 4,149,618 4,354,297 5,055,013 5,025,445 4,952,735 Sales and Services: Educational Activities 9,705,017 11,287,355 11,532,321 13,495,014 13,324,834 Research Activities 720, , ,991 Auxiliary Enterprises 55,505, ,923, ,615, ,402,921 62,745, Other Interest Income 948,199 1,304,750 1,598,990 1,989,008 1,087,358 Realized Gains/Losses on Investments Other Sources 6,189,946 9,049,819 11,155,404 7,679,702 7,287,597 Total Current Funds Revenues 461,968, ,219, ,862, ,363, ,292,730 Current Funds Expenditures Educational and General Instruction 151,574, ,087, ,739, ,123, ,039,398 Research 12,129,771 11,243,864 11,817,940 15,290,999 16,368,490 Public Service 14,807,048 16,848,301 19,933,220 20,232,040 19,467,071 Academic Support 27,548,929 27,349,956 30,307,520 33,698,508 38,037,865 Student Services 14,776,212 14,843,639 16,141,665 18,465,835 18,151,518 Institutional Support 38,319,342 43,759,305 47,994,208 55,508,429 68,903,180 Operation and Maintenance of Plant 33,063,620 36,493,038 36,407,131 38,618,291 42,731,682 Scholarship and Fellowships 39,244,430 43,506,480 44,173,728 49,477,836 57,336,884 Total Educational and General Expenditures 331,463, ,131, ,515, ,415, ,036,088 Auxiliary Enterprises Expenditures 75,005,323 77,281,479 80,770,604 85,550,398 88,873,791 Total Current Funds Expenditures 406,469, ,413, ,285, ,965, ,909,879 Mandatory Current Funds Transfers (Net) (15,891,558) (15,638,609) (18,947,222) (26,207,689) (26,501,464) Excess Current Funds Revenues to Current Funds Expenditures and Mandatory Transfers 39,607,733 46,167,591 44,629,638 58,190,427 44,881,387 Note A: The financial statements for FY2002 were prepared using the economic resources measurement focus and accrual basis of accounting as prescribed by Governmental Accounting Standards Board Statements 34/35. This reporting model is significantly different from the previous model. (See fiscal years 1997 through For that reason, comparative numbers are not possible. The new reporting format will be presented in future years with another year added each year until a 5 year comparison is in place. This table will continue to be reported until five years of the new format are in place. The new table will be named Table A-8(A). 8