Licensed Tax Center
Chances are, many of your retail and commercial customers are already making federal tax payments to the IRS. Now your financial institution can capitalize on this opportunity – by giving them the convenience of making their federal tax payments electronically (and potentially with reduced fees) via a co-branded IRS Web payment site, powered by your financial institution.
What is a Licensed Tax Center?
As an authorized IRS payment processor since 2002, FIS processes both consumer and business tax payments through our proprietary Web-based tax payment platform, PAY1040.com. For financial institutions interested in establishing a “Licensed Tax Center” in order to accept federal tax payments, FIS will implement a co-branded instance of PAY1040.com which will mimic the look/feel of your brand.
When your customers visit your branded Licensed Tax Center site to pay taxes, they pay a convenience fee determined by your institution. Your financial institution earns a percentage of the convenience fee revenue, as well as standard interchange revenue from the card transaction. Other benefits can include growth of interest revenue resulting from increased revolving credit balances, as well as increased debit/credit transaction volume and average transaction size.
Driving Card Program Success
Licensed Tax Centers represent a powerful tool that can help you in your efforts to increase the success and profitability of your institution’s debit and credit programs. Through BIN restrictions, FIS can limit tax payments on your branded Licensed Tax Center site to only cards issued by your financial institution. Financial institutions can choose to deploy one Licensed Tax Center program, or they can launch numerous simultaneous programs by isolating specific customer segments (by BIN number) with special marketing programs/offers to incent specific behavior and capitalize on specific cardholder motivations and trends.
Offers can include reduced convenience fees – which are established by the financial institution and can vary by unique program. For example, “rewards junkies” may be willing to pay a higher convenience fee in exchange for points. Meanwhile, customers that you know tend to carry revolving credit balances may warrant a low (or no) convenience fee offer, in order to realize the interest revenue when they carry their tax balance forward over the coming months or years. Other desired outcomes could include card activation, increased average transaction size or more. Detailed reporting gives financial institutions the ability to track and analyze marketing results by unique program, URL, card type, tax type and more!
The Payoff for Your Financial Institution
A Licensed Tax Center can provide a year-round source of revenue. While a large percentage of tax payments are made before the April tax deadline, the majority are made afterward (quarterly estimated tax payments, quarterly business tax payments, monthly installment payments, etc.), which could provide a consistent revenue stream for your business.
By providing this valuable and convenient service for your personal and business customers, financial institutions can build loyalty and strengthen customer relationships – while positioning themselves as a national payment transaction leader. Licensed Tax Centers can help financial institutions increase fee and interchange revenue, grow interest revenue by driving up revolving credit balances, increase debit/credit card transaction volume and average transaction size and realize adjacent benefits from other ongoing card activity strategies.
Get in the Game – Today!
Your financial institution could start collecting tax payments in just a few short weeks. There is no cost to implement a Licensed Tax Center – your financial institution will not incur any costs associated with development, hosting and no one-time or fixed monthly fees. Implementation requires only minimal involvement of your financial institution’s technical resources. Our tax payment platform is highly flexible to accommodate new marketing campaigns. And FIS provides a host of turnkey marketing materials and support to help you get started.