Transaction Fees and Payment Processing: Managing Compliance Through Process and Technology


Two of our main goals at LucentPay is to educate our business partners on efficient payment processing and more importantly bring clarity on how to utilize our No-Cost-To-Biller™ model in a manner that reduces risk and drives operational savings.  The amount of information and documentation that an agency would have to go through on their own can make this a very daunting task and even cause some to say, “THIS IS TOO DIFFICULT TO MANAGE!”  

Many agencies see the process of monitoring state and federal laws as being too complicated and cumbersome to manage on their own.  While nothing is free from risk, if you are adhering to the rules and properly managing the process flow, it can be done.  At LucentPay, we have done the work to help simplify the process through our proprietary technology and process flow.  

Some in the ARM industry state that it can’t be done because of all of the regulations on convenience fees and that it explicitly says that they cannot be charged. Again, we go to documented history and there are several large prominent money movers that do just this and have been doing it for decades. 

Getting into the regulations can be a bit tedious and gray. But the thing you have to understand is that there are state and federal regulations and card guidelines and each have their own nuances. (We are not legal counsel and suggest contacting yours, and then us to discuss each of these in more detail and we can provide much more detail to you at that time.)

FDCPA & State Law - A key point outlined in the FDCPA is that the agency not profit from the fee. Our LucentPay product charges a fee for access to our payment channel and processes that charge separately from your customer’s original debt payment. Processing the fee in this manner addresses the aforementioned issues. Each state has different anti-surcharge statutes and poses too much to cover in a single blog post, so it is best to give us a call and we can discuss your situation and the specific state laws in more detail. 

Card Brands - The major payment cards (such as Visa/MC) all have their own guidelines for merchant processing. As mentioned above, our proprietary software platform creates two separate transactions and both of those transactions are submitted to the card brands in accordance with all the card brands guidelines.  

Disclosures - One of the most important aspects of our product is we fully disclose this to the consumer prior to any payment being processed. This explains how the charges are being assessed and who they are going to. We also work with our partners to ensure they offer a free payment option to the consumer regardless of the communication channel the consumer is using to contact your agency. This is an integral part of the product. We also programmatically recognize the address of the consumer at the time of payment to ensure compliance with their state specific regulations. At any time during the process, the consumer can opt-out without incurring any fees.

Our No-Cost-To-Biller™ platform was built with all of these regulations in mind and has been reviewed by our banking relationships, legal councils, clients, and our partners - all have agreed that our platform follows all regulations and guidelines. 

Are you ready to seriously reduce your processing costs by 60-90%? Contact us today to get started!

Ken Schneider