What is the change?
Beginning December 4th, 2017, credit cards and other payment options that link to credit cards, will no longer be accepted as payment for Pay.gov debts owed to the Federal government.
Why is this change occurring?
Treasury Bureau of The Fiscal Service's Card Acquiring Service (CAS), through a financial agent, collects money from consumers paying the Federal government on behalf of Federal agencies via credit and debit cards. The Fiscal Service and all participating agencies are bound by the card network (Visa, MasterCard, Amex, Discover) rules and regulations governing all debit and credit card transactions. The card network rules generally prohibit the use of credit cards (but not debit cards) for the repayment of loan balances and other debt obligations (“debt for debt”).
In 2016, Visa conducted a review of merchant acquirer card cashflows (type of collection accounts) and their merchant classifications. Pursuant to this review, Visa identified to CAS several cashflows that seemed to be processing credit cards for loan and other debt repayments, which conflicts with requirements imposed by Visa’s (and other card network) rules.
How will this affect me?
Pay.gov payment options after December 3, 2017 will be bank branded debit cards, checking and saving accounts (ACH) and PayPal (linked to checking and saving accounts only - ACH).
Will debit cards be allowed via PayPal?
No. Bank branded debit cards will not be allowed via PayPal. Customers will, however, be able to pay using your checking and savings accounts (ACH) or money already in a PayPal account.
Will this change delay my payments?
This change simply removes credit cards as a payment option and does not affect the timeliness of your payments.
Can I use “convenience checks” provided by my credit card issuer to pay my debt?
Yes. Convenience checks are a mechanism to effect a cash advance to you as the cardholder that is payable to you, and are not restricted in the way credit card transactions directly between you and payee are. Therefore, convenience checks received in the lockbox environment to pay a debt obligation are an acceptable form of payment. That said, as a cash advance, you may incur interest and fees on top or according to different terms than it would if you are using your credit card directly.