HBP Part 6.4. Credit Card Collections

Handbook of Business Procedures

Date published: May 23, 2005
Last revised: March 8, 2013
Issued by: Cash Management


A. Introduction

This policy addresses the means by which departments may accept credit card payments from customers. UT Austin offers a centralized means of selling merchandise and accepting credit card payments via TXShop. Other options are available for departments to manage their own sales and credit card collections.

If a department decides to manage its own credit card collections, the department is responsible for physical and electronic security of credit card information, costs associated with credit card transactions, and following established accounting procedures. Authorization is required from Accounting and Financial Management before any department-controlled method of credit card collection may be set up.

B. Centralized Credit Card Processing within TXShop

TXShop is the online shopping cart application for the University of Texas at Austin. It functions as an online shopping mall where University departments open stores to sell products and services. Credit card payments go directly through the University's Centralized Receivables accounting function, and the department is not required to establish a separate merchant number or create daily VC1s. For information about setting up a TXShop store, visit the TXShop web site.


C. Terminology for Department-Controlled Credit Card Processing


A request from a merchant to charge a credit card. The credit card is not actually charged until the authorization is settled.

Bank Credit Charges

Each settlement (closeout) of a credit card batch creates a credit transaction to the bank. Since batches must be settled daily, there will be a bank credit charge for any day a credit card payment is received and processed.

Bank Debit Charges

Monthly charges for credit card discount fees and chargebacks create debit transactions to the bank. Each month, each credit card company causes the money owed to them in discount fees (and/or chargebacks) to be transferred from your account to theirs. This is a debit against your account, and the bank charges a small fee per debit. For example, if you accept all three credit card types, you will be charged a debit fee by your bank for each card type.


A customer-initiated procedure to contest a charge. Merchants are generally given less than 10 days to produce evidence that the charge against the customer's credit card was valid. If this evidence cannot be provided, the funds are taken from the merchant and credited to the customer. Chargebacks are very difficult to refute for purchases made over the web, because the card holder's signature is never obtained.


Canceling a credit card transaction that has been authorized and settled.

Credit Card Discount Rate

A percentage of gross sales collected by the credit card processor from the merchant each time the merchant accepts payment via credit card. Discount rates vary by credit card company (MasterCard/Visa, American Express, and Discover/Novus) and by classification of merchant. UT Austin departments that do not physically have the credit card to swipe through a point-of-sale terminal are classified as "Emerging Market."

GPI (Global Payments Inc.)

Global Payments Inc. handles all credit card processing for UT Austin. This processing includes handling requests for authorization and settlement. The Internet Commerce Provider associated with an online store must be able to communicate (be certified) with Global Payments. Any software provider for non-Internet processing must also be certified with Global Payments.

Gross Sales

The total dollar amount of all sales with nothing subtracted.

Merchant Setup Fee

A one-time fee charged by Internet Commerce Providers to enable a new merchant to collect credit cards. Each new credit card account is considered to be a merchant.

Privacy Policy

A statement published on a web site that explains what is done with the information provided by the customer. This statement should notify the customer if the information provided is being made available for use beyond the service being sold.

Sales Tax

For more information on charging sales tax for goods and services, see the Sales Tax publication available on the Office or Accounting web site or contact Financial Reports at 471-1265.

Sales Tax*


A procedure in which a merchant requests that some or all authorized transactions be processed by a credit card processor. This processing includes charging the customer's credit card and transferring the money owed to the merchant.


Canceling a credit card transaction that has been authorized, but not settled. See also Credit.

D. Departmental Responsibilities for Department-Controlled Credit Card Processing

1. Security

a. Physical Security

Departments are to keep all copies of credit card information confidential and protected from misuse. Current records are to be locked in file cabinets. Only authorized personnel should have access to keys to file cabinets containing credit card information. Discarded daily detail of credit card information is to be shredded. Outdated records are to be marked "For confidential disposal – shred" and should be retained and destroyed in accordance with the official University Records Retention Schedule (see section D2 of this Part for more information). 

b. Electronic Security

Credit card information stored on local hard drives must be properly secured and properly disposed of in accordance with the official University Records Retention Schedule (see section D2 of this Part for more information). If a department stores confidential credit card information on a local hard drive, the department must contact the Information Security Office (ISO) to ensure the information is stored in compliance with Payment Card Industry Data Security Standards (PCIDSS). Hard drives must be wiped clean before disposal.

The University of Texas Records Retention Schedule (UTRRS)

2. Records Retention

Both paper and electronic records are to be stored securely for the current fiscal year plus three years in accordance with the official University Records Retention Schedule records series AALL454 Detail-Credit Card Transaction. For more information, refer to the Handbook of Business Procedures:

3. Processing of Transactions

Departments must use a credit card processing system that is certified by UT Austin's credit card processor (currently Global Payments).

4. Costs

Departments are responsible for all costs associated with credit card processing, including but not limited to setup fees, monthly maintenance fees, bank fees, discount rate fees, and per transaction fees.

Departments are responsible for their own voids, returns, chargebacks, and all the costs associated with such transactions.

5. Settlement

Departments must settle batches daily with a printed settlement report which lists total collected for each card type.

6. Vouchering

Departments must create a VC1 for each day’s business and deliver it to the Bursar's Office for approval by the end of the next business day. More than one day’s business cannot be combined into one VC1.

7. Reconciliation

Each credit card company will send a statement of activity, which departments are required to reconcile with deposit records and forward to Accounting and Financial Management—Cash Management (campus mail code K5300) by the 20th of each month.

E. Process Overview of Department-Controlled Credit Card Processing

Department-controlled credit card collection may be conducted via three methods: web-based, point of sale (POS) terminal, and Global Retail Advantage Software. Each method has different one-time set up costs, differing costs per transaction, and different discount rates. Generally, the volume of transactions and whether the customer is present with the credit card will be a key factor in deciding the appropriate method for collection of credit card income. All methods require authorization from Accounting and Financial Management prior to set-up.

In order to set up any method of credit card collections, departments must obtain a merchant number by filling out a request form, included in the credit card packets as described below. UT Austin's credit card processor, Global Payments, Inc., may take up to four weeks to establish a merchant account.

1. Online (Web) Credit Card Collections

a. Policies and Technical Issues for Accepting Online Credit Card Payments

Download and read Accounting and Financial Management Web Credit Card Packet. This PDF packet contains:

  • Guidelines for departments accepting online payments
  • A summary of costs associated with accepting credit card payments via the web
  • A memo template to be used to request a merchant account (required to accept online payments)
  • Office of Internal Audits Self-Assessment Checklist

Accounting and Financial Management Web Credit Card Packet*

b. Technical Means of Accepting Online Credit Card Payments

Each department is responsible for the creation of their own online store (the department can develop the store or contract with a software company to develop the online store). There are a variety of methods for starting up your store. Read about them, research potential solutions, and select the one that works best for your department. Contact the TXShop team at txshop@austin.utexas.edu for help with questions about online store development and payment processing.

c. Self-Assessment

Before your online store can accept payments, a technical contact for the store must have a design walk-through with an auditor from the Office of Internal Audits. Looking over the checklist prior to the development of your online store enables you to be informed about Internal Audits requirements for system security and data integrity. If you have contracted the development of your store out to another company, be sure to give them a copy of the checklist. The checklist is located in the Accounting and Financial Management Web Credit Card Packet.

Accounting and Financial Management Web Credit Card Packet*

d. Costs Associated with Opening Your Online Business

Complete the Web Credit Card Cost Worksheet and print out your results. After you've determined how much business you expect to do in a month, this form will help you calculate how much your department will have to pay for online payment processing. After you fill out the form, print it. You will submit it as backup material for your request for a merchant account. This form requires that you have JavaScript turned on in your browser. If you do not wish to turn on JavaScript, you may print out the form and do the calculations yourself.

Web Credit Card Cost Worksheet

e. Requesting a Merchant Account

Complete and send the Request for a Merchant Account memo.

A template for this memo is located in the Accounting and Financial Management Web Credit Card Packet. Instructions for filling out the memo and sending it are included in the memo. Send the printout of your Web Credit Card Cost Worksheet along with your request for a merchant account. If your request is approved by Accounting and Financial Management, your merchant account will be requested to UT Austin's credit card processor (Global Payments, Inc.). The request can take as long as 3-4 weeks to be returned by Global Payments. Please direct questions concerning merchant accounts to Cash Management Services at creditcards@austin.utexas.edu.

Accounting and Financial Management Web Credit Card Packet*

Web Credit Card Cost Worksheet

f. Developing Your Online Store

Work with the programmers hired to develop your online store. Be sure to keep them informed about the Accounting and Financial Management Web Credit Card Policy and the Office of Internal Audits Checklist.

Schedule a design walk-through with an auditor from Office of Internal Audits. This meeting may be scheduled by calling the Office of Internal Audits at 471-7117. A technical contact (programmer or analyst) and a department contact should meet with the auditor. To schedule the walk-through, follow the directions in the Internal Audits Checklist that is part of the Accounting and Financial Management Web Credit Card Packet. Be familiar with all the information needed to address the issues raised in the Internal Audits Checklist. You will be required to comply with all recommendations made by the auditor during the walk-through before your store may go "live."

Accounting and Financial Management Web Credit Card Packet*

Office of Internal Audits

g. Opening Your Online Store

After you have completed the Office of Internal Audits design walk-through of your store, Internal Audits will notify the Accounting and Financial Management. Accounting and Financial Management will then notify you of your merchant account number. Give your merchant account number to your web credit card vendor, and then you can begin accepting online credit card payments.

Follow the Accounting and Financial Management's procedures for settlement, vouchering, and reconciliation. Learn about how to follow daily and monthly procedures regarding accepting payments. Following these procedures will ensure that your department's revenue is properly deposited in your departmental account. To learn about these procedures, contact Accounting and Financial Management Cash Management Services at 232-5733, or e-mail creditcards@austin.utexas.edu. Questions about general credit card information can also be addressed to Cash Management Services at the same phone number.

Cash Management Services

2. Point of Sale (POS) Terminal Credit Card Collections

a. General Information

Credit card collection using a Point of Sale (POS) terminal is for departments where the customer is present for the card to be swiped, or for departments that do not process a large volume of transactions. A card can be swiped on a terminal if the customer is present, or the credit card number can be hand-keyed into the terminal. The discount rate classification is dependent on whether the majority of cards are swiped or keyed into the terminal. Individual receipts are printed. The Point of Sale Credit Card Packet contains prices, additional information, and Merchant Number request form.

Point of Sale Credit Card Packet*

b. Requirements

The department must purchase an all-in-one terminal and printer. The terminal requires a power source and a dedicated phone line.

c. Establishing a Merchant Number

In order to establish a merchant account, departments must complete a Request for Credit Card Merchant Number form, included in the Point of Sale Credit Card Packet, and send it to the Accounting and Financial Management—Cash Management (campus mail code K5300).

* Note: PDFs are best viewed with Adobe Acrobat Reader 6.0 or later. Earlier versions may result in incomplete rendering of information. A free update of Adobe Acrobat Reader may be obtained from Adobe.



Part 6. Cash Handling - Table of Contents