Parent Pay Changes
** American Express acceptance and reduction in Payment Service Fee **
We are writing to inform you of changes we are planning to make to the ParentPay Collection Service, which may affect some of your parents. Please note that no action is required by you.
From 1st April 2017, we have decided to no longer accept American Express (Amex) cards on ParentPay, the reasons for which are set out in greater detail below.
The good news is that as a result of this change we are proposing to reduce the Payment Service Fee (“PSF”) from 1.29% to 1.275% from 1st July, equivalent to a 1.2% cut.
From 1st April onwards, Amex cardholders will need to select an alternative stored card when paying or enter new card details to use on ParentPay.
We will notify parents via ParentPay, and email regular Amex users informing them of the change.
Why is this happening ?
ParentPay is committed to maintaining best value for our customers and aims to reduce the PSF for schools whenever possible. The PSF is affected by, among other things, the cost of accepting and processing various payment methods, and the cost of managing the settlement and reporting.
As many of you will be aware, Amex charges merchants higher rates than Visa or MasterCard and for many years ParentPay did not accept Amex because of these higher charges. However, in 2014, Amex offered ParentPay improved merchant rates in return for ParentPay agreeing to receive delayed settlement of funds from Amex, and as a consequence we began to accept Amex cards.
Following the introduction of weekly settlement last year, and recent changes to Amex settlement reporting, the funding and operational cost of accepting delayed settlement from Amex has increased materially. Given the low usage of Amex on ParentPay, with fewer than 2% of parents using Amex cards, we no longer believe that it makes sense to continue accepting Amex.
By no longer accepting Amex we will save on costs and be able to reduce the PSF for all our customers, many of whom do not have parents who use Amex.
We are unable to accept Amex for individual schools without making significant changes to ParentPay. Since these changes would be both costly and time consuming and would delay other development projects we do not believe it would be in the best interests of customers for us to pursue such changes.
Proposed rate reduction
At the next PSF rate review, which will take effect from 1st July 2017, we plan to reduce the PSF. We expect to initially reduce the PSF from 1.29% to 1.275%. This will be confirmed before the end of June.
We are also looking to introduce alternative lower cost payment methods in the future, which will allow us to reduce the PSF further.
We will keep you updated on these plans. In the meantime, if you require further information, please contact us using the details below.
Yours sincerely
Clint Wilson Chief Executive,
ParentPay Ltd
